Valbonne, France, September 19, 2018, 5:45pm CEST
TxCell SA (FR0010127662 – TXCL), a developer of cellular immunotherapies based on regulatory T cells (Tregs) for inflammation, autoimmunity and transplantation, today announces financial results for the first half of 2018 and provides an update on the proposed acquisition by Sangamo Therapeutics, Inc.
The TxCell Half Year Financial Report as of June 30, 2018 is available on TxCell’s website www.txcell.com in the “Investors” / “Documentation” / “AMF regulated information” section.
Significant events of the first half of 2018
On February 2, 2018, TxCell obtained a loan from Bpifrance for €1.2 million for the partial financing of preclinical activities of TX200, its lead CAR-Treg program targeting HLA-A2 for the prevention of chronic rejection after solid organ transplantation.
On May 31, 2018, TxCell announced the execution of a Master Service Agreement (“MSA”) with Lonza Pharma & Biotech (“Lonza”) for the manufacturing of TX200 during a clinical trial expected to start in 2019.
On June 21, 2018, TxCell announced the presentation of the first in vivo proof-of-concept data generated with a proprietary CD8+ CAR-Tregs in relevant animal models of graft-versus-host disease (GvHD) and skin graft. This was obtained in the context of a collaboration between TxCell and the Center of Research in Transplantation and Immunology (CRTI, Nantes, France).
During the first half of 2018, 66 warrants (“Tranche Warrants”) giving access to notes (“OCA”) with share subscription warrants attached (“BSA” and, together with the OCA to which they are attached, the “OCABSA”) have been exercised by Yorkville, upon request of TxCell. TxCell consequently issued 66 OCA to Yorkville for a total nominal amount of €6.6 million, from which 550,000 BSA were detached. As at the date hereof, there are 56 outstanding OCA (representing a total nominal amount of €5.6 million) that remain to be converted into TxCell shares.
On July 23, 2018, TxCell announced its proposed acquisition pursuant to an agreement entered into with Sangamo Therapeutics, Inc. ("Sangamo").
Subject to the fulfillment of certain conditions precedent provided for in this agreement, Sangamo would acquire a majority stake representing approximately 53% of the share capital and voting rights of TxCell (the “Acquisition”) before filing a simplified cash tender offer for the remaining outstanding shares of TxCell (the “Tender Offer”), following by a possible squeeze-out procedure. Following the completion of the possible squeeze-out procedure, Sangamo intends to delist TxCell.
The terms and conditions of the offer and the price of €2.58 per share proposed in the simplified tender offer, representing an enterprise value for TxCell of approximately € 72 million on a debt free and cash free basis, will be subject in particular to the AMF's compliance decision on the proposed offer. For more information, please refer to the press release dated July 23, 2018.
Simultaneously, TxCell also announced an amendment of its OCABSA financing, subject to the completion of the Acquisition. The agreement entered into with Yorkville provides for (i) the early redemption of 50% of the 56 OCA currently held by Yorkville for a total redemption amount of €3,080,000 (being 110% of their aggregate par value of €2,800,000), (ii) the conversion by Yorkville of the remaining 28 OCA into 1,866,666 new TxCell shares at a fixed conversion price of €1.50, and (iii) the buy back by TxCell of the 84 outstanding Tranche Warrants and the 1,236,350 BSA currently held by Yorkville for the lump sum of one euro, for cancellation. For more information, please refer to the press release dated July 23, 2018.
As of today, several conditions precedent to the Acquisition have been fulfilled, including the condition relating to regulations governing foreign investments in France. TxCell is therefore expecting the Acquisition to close in early October 2018. Sangamo would then file the proposed Tender Offer immediately after the completion of the Acquisition.
In order to cover for working capital expenses of TxCell in the following months, Sangamo has granted a loan to TxCell of an amount of €4.5 million pursuant to a loan agreement dated September 18, 2018.
Please download the full press release in PDF to view the financial highlights for the first half of 2018.