Plethora Solutions Holdings Plc Regulatory News (PLE)

15 October 2013

Plethora Solutions Holdings PLC

("Plethora" or the "Company")

Placing & Subscription to raise £4.4 million at 9p per share

Plethora Solutions Holdings plc (AIM: PLE) announces that it has entered into agreements to raise £4.4 million by way of a Placing & Subscription at 9p per share through the issue of 49,000,000 New Ordinary Shares.

Summary

q Gross proceeds of the financing amount to £4.4 million, estimated to be £4.2 million net of expenses

q Placing & Subscription of 49,000,000 New Ordinary Shares at a Placing Price of 9p per share

q The proceeds of the financing will be used to:

· complete the final steps in the European regulatory approval of PSD502;

· prepare the filing and prosecution of New Drug Application ("NDA") with the US Food and Drug Administration ("FDA"); and

· provide working capital, including to continue the Group's partnering activities in connection with the commercial launch of PSD502.

q £1.8 million provided by investment funds associated with Jim Mellon. £0.1 million provided by other directors including Dr Greg Bailey, Ronald Openshaw and Prof. Mike Wyllie

q £2.4 million provided by institutional investors

Ronald Openshaw, CEO of Plethora said:

"Over the last few months Plethora has delivered the agreement to control global development and commercialisation of PSD502 and the positive opinion from the CHMP. Based on the positive effect on the Company's valuation we have secured the resources to execute our near term strategy of seeing approval of PSD502 and generating a financial return to shareholders."

Enquiries:

15 October 2013

Plethora Solutions Holdings PLC

("Plethora" or the "Company")

Placing & Subscription to raise £4.4 million at 9p per share

Posting of Circular

Plethora Solutions Holdings plc (AIM: PLE) announces that it has entered into agreements to raise £4.4 million by way of a Placing & Subscription at 9p per share through the issue of 49,000,000 New Ordinary Shares.

The proceeds of this financing will be used to complete the last steps of regulatory approval in the Europe, but importantly will fund the filing and prosecution of a New Drug Application ("NDA") with the US Food and Drug Administration ("FDA"). In addition, the financing will provide working capital to continue the Group's partnering activities in connection with the commercial launch of PSD502.

Completion of the Placing & Subscription and the issue of the New Ordinary Shares are subject to, inter alia, the passing of the necessary resolutions at a General Meeting of the Company. A circular to shareholders is being sent today which will contain a notice of General Meeting for 31 October 2013 at which the resolutions will be put to shareholders. The Placing Shares will, on Admission, be credited as fully paid and will have the same rights in all respects as the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared. The Placing is to be effected on behalf of the Company by Daniel Stewart and Hybridan, under the terms of the Placing Agreement.

Proposed Placing

Over the course of the last few months, Plethora has announced two highly important pieces of news - first that it had secured commercial and developmental rights to PSD502 for the territories that it did not control and second that it had obtained de facto approval from the European authorities in the form of a positive opinion from the Committee for Medicinal Products for Human Use (CHMP).

The Directors believe that following the rerating of the Company's shares and the increase in the market capitalisation it is appropriate to raise additional working capital through the Placing & Subscription at this time.

PSD502 - a treatment for premature ejaculation

Plethora was founded around PSD502, a treatment for premature ejaculation ("PE"). This product was developed by Plethora and in 2009 successfully completed Phase III clinical trials in Europe and the United States with statistically and clinically significant results.

Epidemiology studies indicate that the estimated prevalence of PE is 20-30% of adult men.

In the 28 member states of the European Union, the Company estimates that there are in excess of 150 million men aged between 20-69 years old. This implies that the potential population of men in the European Union with the disorder is 30-45 million. A centralised approval of PSD502 by the EMA would permit the product to be marketed to this entire group.

In addition, the Company estimates that there are in excess of 97 million men in the US between the ages of 20 and 69 years old. Based on an assumption of 1-in-4 men with the condition, the potential patient group in the US could be 24 million men. Consequently, Plethora believes that, even based on achieving a modest market share, the US market could be several hundreds of millions of dollars per annum. Approval from the FDA for PSD502 would permit the product to be marketed to this entire group.

The Directors believe PSD502 has significant potential value based on the prevalence of premature ejaculation and the lack of a widely available effective treatment.

Rights to commercialise PSD502

In 2007, Plethora entered into the first of several agreements with Shionogi (formerly Sciele Pharma Inc.) under which the parties agreed that they would co-promote PSD502 in the US following regulatory approval. In two successive agreements in the first half of 2009, Shionogi then acquired global control of PSD502 in exchange for upfront payments and certain royalty agreements. Under the 2009 agreements, Plethora transferred to Shionogi full rights to the US market for a single payment, with no royalties payable to Plethora under that agreement. 

In September 2011, Plethora regained control in Europe and the Rest of the World (excluding North America, South America, Japan, Korea, Taiwan and China). Following this agreement Plethora commenced the European regulatory filing as discussed below.

This year on 22 August 2013, the Company announced that it had agreed with Shionogi to expand globally the scope for Plethora to pursue the regulatory approval and commercialisation of PSD502. Under the new agreement, Plethora assumed responsibility for the regulatory and commercial development of the product throughout the world, including in territories previously excluded, specifically North America, South America, Japan, Korea, Taiwan and China. Plethora will, at its own cost, file a NDA with the FDA.

The Company now has global control of the regulatory process and commercialisation of PSD502.

Regulatory Approval

Europe

In mid 2012, Plethora submitted a dossier to the European Medicines Agency for approval and on 20 September 2013, the Company received a positive opinion from the EMA's Committee for Medicinal Products for Human Use (the "CHMP") recommending that the European Commission ("EC") approve PSD502 for the treatment of primary premature ejaculation. A CHMP positive opinion is one of the final steps before a Marketing Authorisation is granted by the European Commission. The CHMP's positive recommendation will be reviewed by the EC, which has the authority to approve medicines for the EU. The Company anticipates a final decision from the EC shortly, as this usually occurs approximately 60 days after a CHMP recommendation, and the Directors expect that once approved by the EC, PSD502 will be launched in Europe as soon as practicable thereafter following the establishment of appropriate commercial partnerships.

United States of America

The Company intends to submit an NDA to the FDA not later than the end of the first half of 2014. Based on historical timescales, assuming approval, PSD502 could be launched in the United States in the second half of 2015.

Commercialisation of PSD502

It is the Company's objective to bring PSD502 to market through one or more marketing partnerships with larger pharmaceutical companies with the marketing expertise and resource to deliver the revenue growth and gain market share. During the early part of 2013 the Group secured the services of two additional consultants on a project basis to expand the reach and activity in this critical area. As a result the volume and activity in business development has increased substantially. 

It is the Company's goal to secure partnerships for as many territories as is commercially viable as a priority. The Group has significantly increased its business development activities with the objective of securing one or more partners to market PSD502 not only in the EU but now globally. Discussions have commenced with a number of companies. The timeline for agreement and likely structure and quantum of any transaction is hard to determine at this stage. It is the Company's objective to secure a marketing partner before the end of 2013.

In addition, Plethora is developing strategies for the launch of the product in territories outside Europe. If approved in Europe, the Directors believe that a number of other countries will use EMA approval as a reference document for approval in their jurisdiction. In particular, the Company believes there is significant value to the opportunities in South America, the Middle-East, Asia and Australasia. 

The Company has previously stated that it had started talks with a number of companies for the commercialisation of the product - these talks continue. 

The Placing & Subscription

The Company announces that it has conditionally agreed the terms of the Placing & Subscription to raise approximately £4.4 million before expenses through the issue of 49,000,000 New Ordinary Shares at a placing price of 9p per share and estimated to be £4.2 million net of expenses. The New Ordinary Shares will be issued on a non pre-emptive basis. The 49,000,000 New Ordinary Shares issued in the Placing & Subscription will represent 12.4% of the Enlarged Share Capital.

The Subscription of £2.0 million comprises the issue of 22,333,000 new ordinary shares. Of this £1.8 million will be subscribed by entities associated with Mr Mellon, the Chairman of the Company, and with which he is a connected party. A further £0.1 million is being subscribed by other directors including Dr Bailey, Mr Openshaw and Prof Wyllie. An additional £0.1 million is being subscribed by certain parties directly with the Company.

The Placing with institutional investors of 26,667,000 new ordinary shares to raise £2.4 million has been arranged by Daniel Stewart and Hybridan as joint brokers to the Company and is being conducted by way of a non pre-emptive share issue. The Directors believe that this is the most cost effective method to raise funds in the current circumstances. 

Completion of the Placing & Subscription and the issue of the New Ordinary Shares are subject to, inter alia, the passing of the Resolutions at the General Meeting. The New Ordinary Shares will, on Admission, be credited as fully paid and will have the same rights in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared. The Placing & Subscription is conditional, inter alia, upon:

· the approval of the Resolutions at the General Meeting;

· the admission to trading on AIM of the new ordinary shares to be issued pursuant to the Subscription;

· the Placing Agreement becoming unconditional in all respects and not having been terminated in accordance with its terms on or before 8.00am on 1 November 2013 (or such later date not being later than 16 November or as may be determined); and

· Admission having occurred not later than 8.00am on 1 November 2013 (or such later date not being later than 16 November or as may be determined).

The Placing is to be effected on behalf of the Company jointly by Daniel Stewart and Hybridan, under the terms of the Placing Agreement. Completion of the Placing is subject to certain conditions including those listed above. Under the terms of the Placing Agreement, the Company has agreed to pay Daniel Stewart and Hybridan commission on funds raised by them. The Placing Agreement contains certain warranties given by the Company with respect to its business and the Group and certain matters connected with the Placing. In addition, the Company has given indemnities to Daniel Stewart and Hybridan in connection with the Placing and their performance of services in relation to the Placing. The Placing Agreement may be terminated by Daniel Stewart and/or Hybridan in respect of their own placees at any time before Admission for, inter alia, a material breach by the Company of the terms of the Placing Agreement or the warranties contained in it or on the occurrence of certain specified events or of certain force majeure events.

The Subscription as relates to Ronald Openshaw, Michael Wyllie, Greg Bailey and Jim Mellon (and entities with which he is a connected party) falls to be treated as a related party transactions pursuant to the AIM Rules (the "Related Party Transaction"). Mike Collis, being the Independent Director, (Ronald Openshaw, Michael Wyllie, Greg Bailey and Jim Mellon being deemed conflicted owing to their interests in the Related Party Transaction) considers, having consulted with Daniel Stewart & Company (the Company's Nominated Adviser), that the terms of the Related Party Transaction are fair and reasonable insofar as the Shareholders are concerned.

Use of Funds

The Placing & Subscription will raise funds, net of expenses, of £4.2 million. These funds will principally be used for the following purposes:

· to complete the final steps in the European regulatory approval of PSD502;

· to prepare the filing and prosecution of New Drug Application ("NDA") with the US Food and Drug Administration ("FDA"); and

· to provide working capital, including to continue the Group's partnering activities in connection with the commercial launch of PSD502.

Directors interest

The following table sets out the Director's interest in Ordinary Shares at the date of this document and immediately following completion of the Placing & Subscription.

Notes:

* - the holdings of Jim Mellon include those directly beneficially owned by him together with those held by investment funds in which he has an indirect beneficial interest;

** - the holdings of Mike Collis are controlled by Maven Capital Partners LLP, an entity to which he is an advisor and in which he has an indirect beneficial interest;

*** - the holdings of Ronald Openshaw include those held or controlled directly by him or Lucia Capital LLP of which he is a partner, or in his pension fund.

Application to trading on AIM

Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM and it is expected that Admission will be effective and trading will commence at 8:00 am on 1 November 2013.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Latest time and date for receipt of Forms of Proxy 10:00am on 29 October 2013

General Meeting 10:00am on 31 October 2013

Admission of the New Ordinary Shares to AIM 8:00am on 1 November 2013

If any details contained in the timetable above should change, the revised times and dates will be notified by means of an announcement through a Regulatory Information Service.

TRANSACTION STATISTICS

Existing Ordinary Shares 346,428,875

Placing & Subscription Shares issued 49,000,000

Placing Price 9p

Gross proceeds of the Placing £4.4m

Enlarged Share Capital post Financing 395,428,875

Percentage of the Enlarged Share Capital

represented by the New Ordinary Shares 12.4%

DEFINITIONS

The following definitions apply throughout this document, unless the context otherwise requires:

"Act" the Companies Act 2006 (as amended)

"Admission" the admission of the New Ordinary Shares to trading on AIM becoming effective in accordance with rule 6 of the AIM Rules

"AIM" a market operated by the London Stock Exchange

"AIM Rules" the AIM Rules for Companies and/or the AIM Rules for Nominated Advisers as applicable

 "Company" or "Plethora" Plethora Solutions Holdings plc

"Directors" or "the Board" the directors of Plethora whose names are Ronald Openshaw, Michael Wyllie, Greg Bailey, Mike Collis and Jim Mellon

"EMA" the European Medicines Agency

"Enlarged Share Capital" the 395,428,875 Ordinary Shares in issue on Admission, comprising the Existing Ordinary Shares and the New Ordinary Shares

"Existing Ordinary Shares" the 346,428,875 Ordinary Shares in issue as at the date of this document

 "Form of Proxy" the form of proxy for use in relation to the General Meeting which accompanies this document

"General Meeting" the general meeting of the Company, the details of which are set out in the Notice of General Meeting, to be held at the offices of Proskauer Rose LLP, Ninth Floor, Ten Bishops Square London E1 6EG at 10:00am on 31 October 2013 to consider the Resolutions

 "Group" the Company and its subsidiary undertakings

"London Stock Exchange" London Stock Exchange plc

"New Ordinary Shares" together, the Placing Shares and the Subscription Shares

"Notice of General Meeting" the notice convening the General Meeting which is set out at the end of this document

"Ordinary Shares" the ordinary shares of 1p each in the capital of the Company

"Overseas Shareholders" Shareholders with registered addresses in or who are citizens, residents or nationals of jurisdictions outside the UK

 "Placing" the conditional placing by Daniel Stewart and Hybridan on behalf of the Company of the Placing Shares at the Placing Price, in accordance with the Placing Agreement

"Placing Agreement" the conditional agreement dated 15 October 2013 made between the Company, Daniel Stewart and Hybridan, further details of which are set out in the Circular

"Placing Price" 9p per share

"Placing & Subscription" together the Placing and Subscription of 49,000,000 New Ordinary Shares at 9p per share to raise £4.4 million before expenses

"Placing Shares" the 26,667,000 new Ordinary Shares to be issued to placees pursuant to the Placing Agreement

"Plethora Solutions Limited" Plethora Solutions Limited, a wholly owned subsidiary of the Company

"Resolutions" the resolutions to be proposed at the General Meeting as set out in the Notice of General Meeting

"PSD502" Plethora's proprietary treatment for premature ejaculation (PE)

"Shareholder" person(s) who is/are registered as holder(s) of Ordinary Shares from time to time

"Shionogi" Shionogi Ireland Limited (formerly Sciele Ireland Limited)

"Subscription" the conditional subscription by certain investors for the Subscription Shares at the Placing Price

"Subscription Shares" the 22,333,000 new Ordinary Shares to be issued to subscribers pursuant to the Subscription

 "UK" the United Kingdom

-Ends-

Enquiries:

About Plethora:

Plethora is headquartered in the UK and is listed on the London Stock Exchange (AIM: PLE.L). Further information is available at www.plethorasolutions.co.uk

Plethora is focussed on seeking to launch PSD502 for the treatment of premature ejaculation.