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Oncimmune Holdings Plc

Oncimmune Holdings plc Acquires Protagen Diagnostics to accelerate product discovery process

Oncimmune Holdings plc (LON: ONC), a leader in the development, manufacture and commercialisation of personalised immunodiagnostics for the screening, detection and care of cancer, has today announced it has acquired Protagen Diagnostics AG for a total consideration of up to £4.11 million, to be paid by the allotment of up to 2,635,910 Oncimmune Ordinary Shares at 156p per share, a premium of 71% to the closing mid-market price on 18 March 2019.

· An established revenue-generating company leveraging existing partnerships with leading pharmaceutical multinationals

· Accelerates Oncimmune’s biomarker discovery process and grows its development library to over 8,000 immunogenic proteins

· A discovery research centre in Germany led by a high quality scientific team

· Total purchase price of up to £4.11 million subject to performance milestones and payable in Oncimmune shares to be issued at 156p, a premium of 71%

· Delivers on October 2018 Strategic Update by accelerating value creation through partnering to generate scale and reach wider end markets

· Acquisition expected to become cash neutral within 12 months

Protagen has an established revenue-generating business developing precision medicine and patient stratification tools for leading pharmaceutical multinationals in both immuno-oncology and autoimmune disease. These tools support drug development, improve treatment strategies and patient management. Its proprietary high throughput SeroTag® biomarker engine, which is used to discover and validate novel biomarkers, and NavigAID® arrays for disease stratification and response prediction, offer powerful complementary tools to Oncimmune’s proprietary EarlyCDT® product platform. This acquisition further unlocks the latent potential of tumour-related antibodies in detecting disease and directing therapy.

The combination of Oncimmune’s expertise in product design and development, its existing library of known immunogenic proteins and US-based CLIA laboratory, with Protagen’s biomarker discovery capabilites will offer the group a highly differentiated “end-to-end” proposition in the delivery of complementary in vitro diagnostics.

QIAGEN N.V. has been involved with Protagen as an investor in the past and will continue to be an investor in Oncimmune following this transaction.

Dr Adam M Hill, CEO of Oncimmune Holdings plc said:

“The acquisition of Protagen will accelerate Oncimmune’s product discovery process, will grow our library of known and novel immunogenic proteins, and will underpin the group’s ability to deliver value through the development of complementary diagnostics, a key component of our three-year forward strategy.

“Protagen’s biomarker discovery expertise and high throughput antigen screening technology are all highly synergistic to Oncimmune’s current capabilities. I look forward to working with our new colleagues to grow our company.”

Further Details of the Acquisition

Operations

Protagen is based in Dortmund, Germany, where its laboratory facilities house its immunogenic protein biomarker discovery engine. Oncimmune intends to retain Protagen’s high quality scientific team and the Dortmund laboratory to operate as its discovery research centre. It is intended that Oncimmune’s Nottingham and Kansas facilities will continue to be responsible for the enlarged group’s product development, validation and production.

Acquisition Terms

The acquisition price is up to £4.11 million to be satisfied by the allotment of up to 2,635,910 Oncimmune Ordinary Shares at an issue price of 156p. 61.6% of the Consideration Shares will be allotted upon closing, with the remaining 38.4% subject to certain milestone events as described below.

Up to 862,179 of the Consideration Shares will allotted to QIAGEN in settlement of a convertible loan and accrued interest from QIAGEN to Protagen of EUR 2.59 million. In addition, each shareholder in Protagen will also receive a nominal EUR 1 in cash. All the Consideration Shares will be admitted to trading on AIM when issued.

All the Consideration Shares allotted to selling shareholders are subject to a 24 month lock-up period from closing. All the Consideration Shares allotted to QIAGEN are subject to a lock-up period from closing and will be released in equal one-third tranches at 12, 18 and 24 months after closing.

Shareholders in Protagen, which include funds managed by MIG AG. will own 4.10% of the enlarged group if the maximum number of Consideration Shares are allotted and no further shares are allotted within 24 months of closing. QIAGEN will hold 1.34% of the enlarged group. The acquisition of Protagen closed on 19 March 2019.

Consideration Shares will be allotted as follows:

· 1,623,890 Consideration Shares (comprising 61.6% of the maximum consideration) on the closing date;

· 374,744 Consideration Shares (comprising 14.2% of the maximum consideration) if Protagen signs revenue-generating contracts to the aggregate value of at least EUR 0.5 million in the period ending 28 February 2020;

· 249,829 Consideration Shares (comprising 9.5% of the maximum consideration) if certain named key employees of Protagen remain employed by the enlarged group 12 months after closing; and

· 387,447 Consideration Shares (comprising 14.7% of the maximum consideration) on the date falling 24 months after the closing date (and which is available to offset any warranty and indemnity claims under the acquisition agreement).

Financial impact of the Acquisition

Protagen is currently revenue-generating and the acquisition is expected to be cash neutral within 12 months. Over the three years ended 31 December 2018, Protagen generated revenues of EUR 1.7 million, and revenue of EUR 0.6 million and an operating loss before tax of EUR 1.9 million for the year ended 31 December 2018. Net assets as at 30 September 2018 were EUR 2.9 million.

Admission to Trading and Total Voting Rights

Application will be made for the Consideration Shares to be admitted to trading on AIM. It is expected that Admission of the 1,623,890 Consideration Shares to be allotted on completion of the acquisition will become effective and dealings in those Consideration Shares will commence on 25 March 2019. The new Consideration Shares will, when issued, rank pari passu with the existing Ordinary Shares.

Following the issue of 1,623,890 Consideration Shares on completion of the acquisition, the Company’s issued share capital will consist of 63,250,217 Ordinary Shares. There are no Ordinary Shares held in treasury. Therefore, in accordance with the FCA’s Disclosure Guidance and Transparency Rule 5.6.1, the Company confirms that following Admission, the total number of voting rights on completion of the acquisition of Protagen in the Company will be 63,250,217.

Accordingly, 63,250,217 may be used by shareholders as a denominator for the calculations by which they will determine if they are required to notify their interest in, or change their interest in, the Company, under the Disclosure Guidance and Transparency Rules.