Oxford Biomedica Regulatory News (OXB)

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THE SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES, UNLESS REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION. NO PUBLIC OFFERING OF THE SECURITIES DISCUSSED HEREIN IS BEING MADE IN THE UNITED STATES AND THE INFORMATION CONTAINED HEREIN DOES NOT CONSTITUTE AN OFFERING OF SECURITIES FOR SALE IN THE UNITED STATES AND THE COMPANY DOES NOT CURRENTLY INTEND TO REGISTER ANY SECURITIES UNDER THE SECURITIES ACT. THIS ANNOUNCEMENT IS NOT FOR DISTRIBUTION DIRECTLY OR INDIRECTLY IN OR INTO THE UNITED STATES.

PROPOSED FIRM PLACING OF £11 MILLION AND OPEN OFFER OF UP TO £5 MILLION

Oxford BioMedica plc ("Oxford BioMedica" or the "Company") (LSE: OXB) the leading gene-based biopharmaceutical company, is pleased to announce that it intends to raise gross proceeds of up to £16 million (approximately £14.5 million net of expenses) through the issue of up to 641,037,353 new ordinary shares of 1 pence each ("New Ordinary Shares") through a firm placing and open offer at 2.5 pence per New Ordinary Share (the "Issue Price").

·; It is intended that 440,000,000New Ordinary Shares will be issued through the firm placing (the "Firm Placing") to raise gross proceeds of £11.0 million and up to 201,037,353 New Ordinary Shares will be issued through the open offer (the "Open Offer") to raise up to £5.0 million (together the "Placing and Open Offer"). The Firm Placing has been underwritten by Singer Capital Markets.

·; The Issue Price of 2.5 pence represents an 11.1 per cent. premium to the closing price of 2.25 pence per ordinary share on 28 June 2012 (being the last business day prior to the date of this announcement).

·; The Placing and Open Offer is subject to Shareholder approval and a prospectus incorporating a notice of general meeting (the "Prospectus") is expected to be approved by the UK Listing Authority and posted to shareholders on or around 5 July 2012. It is expected that the general meeting of the Company (the "General Meeting") will be held on or around 23 July 2012.

The principal purpose of the Firm Placing and Open Offer is to continue to develop the Company's proprietary LentiVector® gene delivery technology in order to maximise the potential of its high reward LentiVector® platform products, particularly the ophthalmology portfolio. The Directors' growth strategy is to build a financially self-sustaining company focused on high value, fast growing markets such as ophthalmology. The Directors aim to leverage the value of the Company's products and intellectual property through strategic partnerships whilst seeking to retain a financial interest in the successful commercialisation of products that utilise its technologies. In addition to organic growth, the Directors remain alert to external opportunities for strategic and well-conceived corporate activity as a means to accelerate profitability.

John Dawson, Chief Executive Officer at Oxford BioMedica, said: "Thanks to the support from existing and new shareholders, today's proposed fundraising will allow us to continue building our proprietary LentiVector® gene delivery technology. Our goal is to create a financially self-sustaining company focused on high value, fast growing markets, such as ophthalmology, and the LentiVector® platform provides a solid foundation from which to develop high reward products. The success of our ophthalmology portfolio to date, supported by our newly approved LentiVector® platform GMP manufacturing facility, demonstrates our ability to deliver organic growth and we continue to review opportunities for future corporate activity which could expedite profitability."

Commenting on the Firm Placing and Open Offer, Nick Rodgers, Chairman of Oxford BioMedica, said: "I am delighted that investors, particularly our two largest and long-standing shareholders, have provided substantial backing for the Oxford BioMedica management team and the Board's growth strategy. I believe the support we have received, together with the expectation of strong news flow, underline Oxford BioMedica's future commercial prospects and look forward to continued progress."

Highlights

·; The proceeds will be used to continue to develop Oxford BioMedica's LentiVector® platform infrastructure in particular to build on its growing ophthalmology portfolio. Ophthalmology is a high growth market estimated to be worth €13.4 billion in 2011, increasing to €16 billion worldwide by 2016 (source: Visiongain). Oxford BioMedica currently has four ocular products in a revenue-generating partnership with Sanofi, three of which are in Phase I/II clinical trials.

·; On 29 June 2012, Oxford BioMedica announced that Sanofi has elected to exercise its options to acquire two exclusive worldwide licenses for the Company's ocular products StarGen™ and UshStat® for a total option payment of $3 million. The options give Sanofi the right to enter into further development and commercialisation agreements for StarGen™ and UshStat®. The option exercise supports Oxford BioMedica's relationship with Sanofi and further validates the LentiVector® platform.

·; Outside of the agreement with Sanofi, there are currently two additional ocular programmes; one for glaucoma which is in pre-clinical development, and another for uveitis which is at the research stage. Oxford BioMedica plans to progress Glaucoma-GT and Uveitis-GT towards clinical development with the opportunity to out-license both assets for later-stage development.

·; The Company is also pursuing initiatives to secure future funding, over and above the Firm Placing and Open Offer, for ProSavin® and TroVax®, and its technology, via non-dilutive grants, collaborations and strategic alliances with commercial, academic and clinical groups.

This announcement and the information contained herein is restricted and is not for release, publication or distribution, in whole or in part, directly or indirectly, in or into the United States, Australia, Canada or Japan or any jurisdiction into which the publication or distribution would be unlawful.

This announcement is for information purposes only and does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any New Ordinary Shares in the United States, Australia, Canada or Japan or any jurisdiction in which such offer or solicitation would be unlawful. Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdictions. The securities have not been and will not be registered under the Securities Act and may not be offered, sold or transferred, directly or indirectly, within the United States unless registered under the Securities Act except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the securities laws of any state or other jurisdiction of the United States. The securities are being offered and sold outside the United States in accordance with Regulation S under the Securities Act. No public offering of the shares referred to in this announcement is being made in the United States, Australia, Canada or Japan or any jurisdiction in which such public offering would be unlawful.

The information in this press release may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Any forwarding, distribution, reproduction, or disclosure of this information in whole or in part is unauthorised. Failure to comply with this directive may result in a violation of the Securities Act or the applicable laws of other jurisdictions.

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS:

This announcement may contain forward-looking statements that reflect the Group's current expectations regarding future events, including the clinical development and regulatory clearance of the Group's products, the Group's ability to find partners for the development and commercialisation of its products, the business of Oxford BioMedica, and management plans and objectives. Oxford BioMedica considers any statements that are not historical facts as "forward-looking statements". Forward-looking statements involve risks and uncertainties. Actual events could differ materially from those projected herein and depend on a number of factors, including the success of the Group's research strategies, the applicability of the discoveries made therein, the successful and timely completion of pre-clinical and clinical studies with respect to the Group's products, the uncertainties related to the regulatory process, the ability of the Group to identify and agree beneficial terms with suitable partners for the commercialisation and/or development of products, as well as the achievement of expected synergies from such transactions, the acceptance of products by consumers and medical professionals, the successful integration of completed mergers and acquisitions and achievement of expected synergies from such transactions, the ability of the Group to identify and consummate suitable strategic and business combination transactions and the risks described in the Prospectus.

When used in this announcement the words "estimate", "project", "intend", "aim", "anticipate", "believe", "expect", "should" and similar expressions, as they relate to Oxford BioMedica or the management of the Group, are intended to identify such forward--looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements which speak only as at the date of this announcement. Neither Oxford BioMedica nor any other member of the Group undertakes any obligation publicly to update or revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, save in respect of any requirement under applicable laws, the Listing Rules, Prospectus Rules, Disclosure and Transparency Rules and other regulations.

No person has been authorised to give any information or make any representations in relation to the Oxford BioMedica Group or the Firm Placing and Open Offer other than those contained in this announcement and, if given or made, such information or representations must not be relied on as having been so authorised.

Investors and Shareholders should note that the contents of these paragraphs relating to forward-looking statements are not intended to qualify the statements made as to sufficiency of working capital.

Background and reason for the Firm Placing and Open Offer and future strategy of Oxford BioMedica

The future strategy of Oxford BioMedica

The Directors' growth strategy is to build a financially self-sustaining company focused on high value, fast growing markets such as ophthalmology. The Directors aim to leverage the value of the Company's products and intellectual property through strategic partnerships whilst seeking to retain a financial interest in the successful commercialisation of products that utilise its technologies. In addition to organic growth, the Directors remain alert to external opportunities for strategic and well-conceived corporate activity as a means to accelerate profitability.

Background to and reasons for the Firm Placing and Open Offer

The principal purpose of the Firm Placing and Open Offer is to continue to develop the Company's proprietary LentiVector® gene delivery technology in order to maximise the potential of its high reward LentiVector® platform products, particularly the ophthalmology portfolio.

The Company is also pursuing initiatives to secure future funding, over and above the Firm Placing and Open Offer, for ProSavin® and TroVax®, and its technology, via non-dilutive grants, collaborations and strategic alliances with commercial, academic and clinical groups. Oxford BioMedica has secured 12 technology licensing contracts since inception and, over the last 15 years, earned grant income and funding from commercial partners of £88 million.

LentiVector® platform and ophthalmology portfolio

The proceeds will be used to continue to develop Oxford BioMedica's LentiVector® platform infrastructure, in particular to build on its growing ophthalmology portfolio. Oxford BioMedica currently has four ocular products in a revenue-generating partnership with Sanofi, three of which are in Phase I/II clinical trials. On 29 June 2012, Oxford BioMedica announced that Sanofi has elected to exercise its options to acquire two exclusive worldwide licenses for the Company's ocular products StarGen™ and UshStat® for a total option payment of $3 million. The options give Sanofi the right to enter into further development and commercialisation agreements for StarGen™ and UshStat®. The option exercise supports Oxford BioMedica's relationship with Sanofi and further validates the LentiVector® platform. Oxford BioMedica will retain responsibility for the two ongoing Phase I/IIa trials for StarGen™ and UshStat®. Outside of the agreement with Sanofi, there are currently two additional ocular programmes; one for glaucoma which is in pre-clinical development, and another for uveitis which is at the research stage. Oxford BioMedica plans to progress Glaucoma-GT and Uveitis-GT towards clinical development with the opportunity to out-license both assets for later-stage development. These six ophthalmology programmes are underpinned by the Company's proprietary LentiVector® platform technology, which is further supported by Oxford BioMedica's research, regulatory, clinical and manufacturing expertise.

Ophthalmology is a high growth market estimated to be worth €13.4 billion in 2011, increasing to €16 billion worldwide by 2016 (source: Visiongain "The World Ophthalmic Market 2009", 2010 estimate). There is strong demand for innovative products, and Oxford BioMedica's LentiVector® platform is very well suited to creating novel products which could command attractive pricing. The main players in the ophthalmology market include: Novartis/Alcon, Pfizer and Merck for indications such as glaucoma (estimated market of $6.1 billion); Novartis/Alcon for indications such as conjunctivitis/allergy (estimated market of $4.7 billion); Allergan, Santen and Novartis/Alcon for indications such as dry eye (estimated market of $2.1 billion); Novartis, Pfizer, Roche/Genentech, Regeneron/Bayer and Sanofi for retinal diseases such as wet age-related macular degeneration (AMD), diabetic macular oedema (DMO), retinal vein occlusion (RVO) and dry AMD (market size of $3.7 billion based on 2011 LUCENTIS® sales); Sanofi/Genzyme for genetic retinal diseases (with no approved treatments, estimated market of $700 million); Bausch & Lomb and Allergan for indications such as uveitis (estimated market of over $300 million); and Sanofi for indications such as corneal graft rejection (estimated market of $80 million).

There is significant interest in the ophthalmology market, supported by recent industry deals (e.g. Bausch & Lomb acquisition of ISTA, 26 March 2012, for consideration of $484 million with estimated sales of $160.3 million i.e. a multiple of 3.3x; and the Santen acquisition of Novagali, 15 December 2011 for consideration of €102.1 million with estimated sales of $0.77 million i.e., a multiple of 133.1x. The Directors believe there is significant value to be realised from the Company's unpartnered ocular programmes via collaborations and strategic alliances, and also intend to grow the ophthalmology portfolio via a mix of organic growth, strategic alliances and well-conceived acquisition.

Principal terms of the Firm Placing and Open Offer

Oxford BioMedica intends to issue 440,000,000 New Ordinary Shares through the Firm Placing and up to 201,037,353 New Ordinary Shares through the Open Offer at 2.5 pence per New Ordinary Share to raise gross proceeds of up to £16.0 million.

The Firm Placing and Open Offer requires Shareholder approval, which will be sought at the General Meeting. The Issue Price of 2.5 pence per New Ordinary Share represents an 11.1 per cent. premium to the Closing Price of 2.25 pence on 28 June 2012 (being the last business day prior to the date of this announcement).

Firm Placing

The Firm Placees have agreed to subscribe for 440,000,000 New Ordinary Shares at the Issue Price (representing gross proceeds of £11.0 million). The Firm Placed Shares are not subject to clawback and are not part of the Open Offer.

Open Offer

Qualifying Shareholders are being given the opportunity to subscribe for New Ordinary Shares pro rata to their existing shareholdings at the Issue Price on the basis of:

1 New Ordinary Share for every 4.7 Existing Ordinary Shares

held and registered in their name at the Record Date. Qualifying Shareholders may apply for any whole number of New Ordinary Shares. Excess applications will be satisfied only to the extent that corresponding applications by other Qualifying Shareholders are not made or are made for less than their pro rata entitlements. If there is an oversubscription resulting from excess applications, allocations in respect of such excess applications will be scaled down according to the Directors' discretion.

Under the Open Offer, Oxford BioMedica intends to issue up to 201,037,353 New Ordinary Shares at the Issue Price (representing gross proceeds of up to £5.0 million) to be made available pursuant to the Open Offer.

Fractions of Ordinary Shares will not be allotted and each Qualifying Shareholder's entitlement under the Open Offer will be rounded down to the nearest whole number.

The New Ordinary Shares when issued and fully paid, will rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive dividends or other distributions made, paid or declared after the date of their issue.

Use of proceeds

The Directors propose to use approximately £4.0 million of the net proceeds from the Firm Placing to continue to develop the Company's proprietary LentiVector® gene delivery technology in order to maximise the potential of its high reward LentiVector® platform products, particularly the ophthalmology portfolio. The Directors expect to use approximately £1.0 million for manufacturing/process development and approximately £4.6 million will be used to fund ongoing business operations and to strengthen the balance sheet.

Any further amounts received under the Open Offer would be used to fund ongoing business operations to extend the Company's cash runway.

Use of net proceeds summary

Current Trading

On 6 March 2012, Oxford BioMedica announced its preliminary results for the year ended 31 December 2011 and a summary of the financial highlights¹ is set out below:

·; Fundraising of £20.0 million before expenses, completed on 10 January 2011

·; Revenue of £7.7 million (2010: £11.2 million)

·; R&D costs of £17.8 million (2010: £19.9 million) including £3.1 million exceptional impairment loss (2010: £3.9 million impairment loss)

·; Net loss after exceptional items of £12.6 million (2010: £10.3 million)

·; Net cash burn² of £16.5 million (2010: net cash burn² £13.0 million)

·; Net cash³ of £14.3 million (2010: £12.3 million)

1. Audited financial results

2. Net cash used in/generated from operating activities plus sales and purchases of non-current assets and interest received

3. Cash, cash equivalents and available for sale investments

The Company's net cash balance at 30 April 2012 was £9.0 million (unaudited).

The Directors believe that in the absence of the Firm Placing and any proceeds from the Open Offer, Oxford BioMedica has sufficient financial resources to fund the business until towards the end of the first quarter of 2013. This does not take into account the potential milestone payment should Sanofi choose to exercise its option for the ocular product RetinoStat® during 2012 or the first quarter of 2013, nor does it factor in potential revenue from partnering deals from ProSavin® and TroVax®. The receipt of any one of such revenues could result in the Group having sufficient financial resources for the next 12 months.

Related Party Transaction

As part of the Firm Placing, the Directors propose to allot 200,000,000 New Ordinary Shares at the Issue Price, representing approximately 12.6 per cent. of the Company's Enlarged Share Capital to Vulpes Life Sciences Fund. The proposed allotment of the New Ordinary Shares to Vulpes Life Sciences Fund constitutes a "related party transaction" for the purpose of Chapter 11 of the Listing Rules as a result of Vulpes Life Sciences Fund being a "substantial shareholder" as defined by the Listing Rules. As at the date of this announcement, Vulpes Life Sciences Fund holds 15.45 per cent. of the Company's issued share capital.

The Company is required by Chapter 11 of the Listing Rules to seek Shareholder approval for any "related party transaction" which it proposes to enter into. The Notice of General Meeting will seek the approval of Shareholders for the Related Party Transaction between the Company and Vulpes Life Sciences Fund.

Pursuant to the requirements of Chapter 11 of the Listing Rules, Vulpes Life Sciences Fund, as a Related Party, will not vote on the Resolution approving its Related Party Transaction with the Company and it has undertaken to take all reasonable steps to ensure that its associates will not do so either.

The Directors hold 3,704,559 Existing Ordinary Shares representing approximately 0.39 per cent. of the existing issued ordinary share capital of the Company in aggregate. All of the Directors have subscribed for shares in the Firm Placing, amounting to 3,120,000 New Ordinary Shares in aggregate. Immediately following Admission, the Directors' holdings, in aggregate, are expected to represent 0.43 per cent. of the issued Ordinary Shares of the Company.

The Directors' shareholdings as at the date of this announcement and expected shareholdings immediately following Admission is set out below:

* Figures based on no take up under the Open Offer

Expected timetable of principal events

Each of the times and dates set out below and mentioned elsewhere in this announcement may be adjusted by the Company, in which event details of the new times and dates will be notified to the FSA, the London Stock Exchange and, where appropriate, Qualifying Shareholders. All references to a time of day in this announcement are to London time.