AOR.L Regulatory News (AOR)

24 Jul 2007 07:00

Aortech International PLC24 July 2007 24 July 2007 AorTech International plc ("AorTech" or the "Company") Placing and trading update AorTech International (AIM:AOR), the biomaterials and medical device developmentcompany, is pleased to announce an update in relation to developments in theCompany and a Placing of 1,000,000 new Ordinary Shares, at a price of 510p pershare, to raise £5.1 million (before expenses). Furthermore a circular,containing a notice of Extraordinary General Meeting, has today been sent toshareholders. Recent developments of the Company The Company continues to achieve key operational milestones on the use of itscore product, being the Elast-Eon(TM) polymer. These include the development andrefinement of this material for the medical community, with the aim of providinga wide range of high performance Elast-Eon(TM) materials in a variety ofapplication-specific formulations and densities, for use in medical devices. TheCompany however remains at present principally focused on the use of Elast-Eon(TM)in breast implants and new cardiovascular and orthopaedic applications alongsideexisting licensing and supply agreements. The Directors continue to pursue a number of opportunities with the breastimplant product, following the FDA re-approval of the silicone gel-filledimplant in the US. Specifically the Company is exploiting the previousexperience and contacts of Frank Maguire, Chief Executive Officer of theCompany, and the Directors believe the market is becoming increasingly receptiveto a next generation breast implant product. In relation to one of its device development applications, the Directors arepleased to announce today a licensing and supply agreement for the evaluation ofElast-Eon(TM) by a global medical device company. The agreement includes anoption for the licensee to acquire certain of AorTech's intellectual propertyrights. Under the terms of the agreement, the Company will receive an up-frontlicense fee payment intended to compensate the Company for initial costs relatedto the agreement. Contingent upon a number of key conditions being satisfied,the Company will also be eligible to receive subsequent milestone payments whichcould total up to approximately $32 million plus potential material suppliesrevenue and royalties. In the short-term, this agreement is not expected tohave a material impact on the Company's financial position. The signing of thisagreement, together with interest in further partnerships and the Placing (asexplained below) give the Directors confidence in the prospects of the Company. The Placing The Company has today raised £5.1 million, before expenses, through the Placingof 1,000,000 new Ordinary Shares, at a price of 510p per share. The Companyintends to use the proceeds of the Placing as follows: * to expand the manufacturing capability of its Melbourne facility in order to enhance manufacturing margins by bringing Elast-EonTM raw material manufacture in-house; * to fund additional component manufacture to supplement the Company's existing technology in breast implants and cardiovascular and orthopaedic applications and devices; * to fund the hire of further employees for the sales and marketing department and a full time Finance Director; and * to provide working capital for the Company. The Placing is conditional, inter alia, the passing of the Resolutions at theExtraordinary General Meeting and Admission. Application will be made to theLondon Stock Exchange for the Placing Shares to be admitted to trading on AIM.It is expected that admission in respect of those Placing Shares will becomeeffective and dealings in the Placing Shares as issued will commence on 21August 2007. Related party transaction Owing to the size of its shareholding in the Company, Bluehone Investors LLP,who hold approximately 24.82 per cent. of the Company's current issued sharecapital, is a related party of the Company for the purposes of the AIM Rules. As part of the Placing, Bluehone Investors LLP has agreed to subscribe for50,000 Placing Shares representing 5.0 per cent. of the Placing. The Directors(with the exception Dr. Stuart Rollason who is a director of Bluehone InvestorsLLP) consider, having consulted with the Company's Nominated Adviser, EvolutionSecurities, that the subscription by Bluehone Investors LLP is fair andreasonable so far as the Company's shareholders are concerned. FollowingAdmission, Bluehone Investors LLP will have a beneficial interest in 995,810Ordinary Shares respectively, representing 20.7 per cent. of the Enlarged IssuedShare Capital. Extraordinary General Meeting The Company has today sent to shareholders a circular convening an EGM to beheld at 12 noon on 20 August 2007 at The Hogarth Partnership, 2nd FloorUpstream, No 1 London Bridge, London SE1 9BG for the purposes of implementingthe Placing. The Directors consider the Placing to be in the best interests of the Companyand its Shareholders as a whole and, accordingly, unanimously recommend thatshareholders vote in favour of the Resolutions to be proposed at the EGM as theyso intend in respect of their beneficial holdings amounting, in aggregate, to699,690 Ordinary Shares, representing approximately 18.36 per cent. of theexisting issued share capital of the Company. - Ends - For further information please contact: AorTech International plc Tel: + 1 801 201 4336Frank Maguire, Chief Executive Evolution Securities Tel: +44 20 7071 4300Bobbie HilliamTim Worlledge Hogarth Partnership Limited Tel: +44 20 7357 9477Melanie Toyne-SewellSarah Richardson Unless the context otherwise requires, defined terms used in this announcementshall have the meanings given to them in the circular dated 24 July 2007. Notes to Editors: About AorTech International plc Listed on AIM in London, AorTech International plc wholly owns AorTechBiomaterials based in Melbourne, Australia. AorTech Biomaterials was formed inJuly 1997 to commercialise a range of medical grade polyurethanes for medicalimplants developed by the Commonwealth Scientific and Industrial ResearchOrganisation (CSIRO). AorTech's Elast-Eon technology is the product of a decade of fundamentalresearch into biologically stable materials. Elast-Eon materials are patented,high silicone content, polyurethane copolymers which exhibit unparalleledbiological and mechanical performance. AorTech is firmly focused on the development and refinement of this material forthe medical community, with the aim of providing a wide range of highperformance Elast-Eon materials in a variety of application specificformulations and densities, for use in medical devices. This information is provided by RNS The company news service from the London Stock Exchange