Active Biotech announces a rights issue of SEK 35 million

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The board of directors of Active Biotech AB (publ) (“Active Biotech” or the “Company”) has resolved on a rights issue of SEK 35 million, before transaction costs. The proceeds from the rights issue are intended to provide Active Biotech with funds required to pursue the planned activities related to the Company’s prioritized tasquinimod program for the coming twelve months. During this period, Active Biotech will pursue an out-licensing of laquinimod.

The terms of the proposed rights issue have been resolved on by the board of directors to best balance the need for the Company to attract further financing and at the same time provide an appropriate incentive for the existing shareholders to continue supporting the Company from a financing perspective. The rights issue comprises 844,230,664 new shares at a subscription price of SEK 0.0415 per share, and the right to subscribe for new shares shall vest with the Company’s shareholders with pre-emptive rights, whereby three existing shares entitle to subscription for seven new shares.

The board of directors of Active Biotech may decide on exercise of an over-allotment option which, upon full subscription, may provide the Company with up to a further SEK seven million through issue of further 168,846,132 shares. The board of directors’ resolution on the rights issue is subject to approval by an extraordinary general meeting, which is intended to be held on 23 October 2024. A notice to the extraordinary general meeting will be published through a separate press release. Due to the rights issue, the Company has resolved to bring forward the announcement of the interim report for the third quarter 2024 to 21 October 2024.

Background and reasons
Active Biotech is a biotechnology company that focuses on value creation by advancing its two unpartnered projects, tasquinimod and laquinimod, within rare diseases in areas of high unmet medical need and significant commercial potential. This is achieved in a very cost-effective partnering model with leading academic institutions in US and Europe, which ensures that four ongoing and planned phase I-II programs can be completed for a projected full operating cost through 2027 of approximately SEK 120 million for the Company ahead of any partnering income. The rights issue is being made to secure the advancement of current programs, and no other projects, for the coming twelve months.

The Company’s portfolio focus and future value driver is development of tasquinimod for treatment of rare blood cancers. Two clinical proof-of-concept studies have been initiated in myelofibrosis, at MD Anderson, US and in collaboration with Erasmus MC/Oncode, NL at clinical sites within the HOVON network in EU. A similar type of trial at the Abramson Cancer Center, University of Pennsylvania, US, testing the effect of tasquinimod in patients with multiple myeloma is in the final stages of recruitment, and data from this study will be reported within the next six months.

In the laquinimod project, focused on treatment of inflammatory eye disease, Active Biotech has documented that its newly developed eye drop formulation is safe and does not cause any serious adverse effects in healthy subjects treated for 14 days. The Company also reported initial data from a phase I biodistribution study in patients undergoing eye-surgery in US, which documents that use of laquinimod eye-drops leads to intra-ocular concentrations of laquinimod that can trigger biological responses. The study is recruiting towards completion in 2024, and out-licensing activities will now be ramped up.

Active Biotech has out-licensed naptumomab, which is a tumor-targeted immunotherapy in development for advanced solid cancer indications, to the immuno-oncology company NeoTX. Under the terms of the agreement, NeoTX is fully responsible for all development and commercialization, with no financial or operating contributions from Active Biotech.

The rights issue aims at providing Active Biotech with the financial stability required to pursue the planned activities related to the Company’s prioritized tasquinimod programs for the coming twelve months. During this period, Active Biotech will pursue an out-licensing of laquinimod.

The proceeds from the rights issue, at full subscription, amount to approximately SEK 35 million before issue expenses. The proceeds will advance the planned project activities without substantial changes to the size of the organization.

The rights issue
The board of directors of the Company has, subject to approval from the general meeting, resolved on a rights issue of SEK 35 million, before transaction costs. The Company’s share capital is thereby increased with up to approximately SEK 4,359,600.29 through the issue of 844,230,664 new shares if fully subscribed. The subscription price amounts to SEK 0.0415 per share. The right to subscribe for new shares shall vest with the Company’s shareholders with pre-emptive rights, whereby three existing shares entitle to subscription for seven new shares. Subscription can also be made without pre-emptive rights, as set forth in the complete issue resolution.

The terms of the rights issue have been resolved on by the board of directors to best balance the need for the Company to attract further financing and at the same time provide an appropriate incentive for the existing shareholders to continue supporting the Company from a financing perspective. As the planned share issue is limited to cover cost of twelve months operations, the Company may, through exercise of an over-allotment option, on the same terms as those of the rights issue, increase the subscription with up to a further 20% in case of oversubscription. Upon full exercise of the over-allotment option, the Company will raise approximately SEK seven million in additional proceeds though the issuance of 168,846,132 shares. Such share issue will be made by the board of directors based on a new issue authorization proposed to the extraordinary general meeting.

The record date for the right to participate in the rights issue shall be 28 October 2024. Subscription for new shares shall be made during the period 30 October – 13 November 2024. The last day for trading in the Active Biotech share including the right to participate in the rights issue is 24 October 2024.

Some of Active Biotech’s largest shareholders – MGA Holding AB, Sjuenda Holding and the Fourth AP Fund – have together undertaken to subscribe for shares in the rights issue to a nominal value of approximately SEK 14 million, corresponding to, in total, approximately 40 percent of the rights issue. Additionally, Dr. Michael Shalmi, Chairman of the board of directors, has undertaken to subscribe for shares corresponding to SEK one million, approximately 2.9 percent of the rights issue. All other board members (Peter Thelin, Dr. Axel Glasmacher, Aleksandar Danilovski and Uli Hacksell) and management (CEO Helén Tuvesson, CFO Hans Kolam and CMO Erik Vahtola) have undertaken to subscribe for shares in the rights issue corresponding to their respective pre-emptive parts. The rights issue is thus covered by subscription undertakings of approximately SEK 15.2 million in total, corresponding to approximately 43.4 percent of the rights issue. No compensation is paid for the established subscription commitments. The subscription commitments are not secured by bank guarantee, blocked funds, pledges or similar arrangements.

Preliminary timetable

Prospectus
A prospectus will be made available before the subscription period commences. The prospectus will be available on Active Biotech’ s website, www.activebiotech.com.

Advisor
Advokatfirman Vinge is legal advisor to Active Biotech in connection with the rights issue.

For more information, please contact:
Helén Tuvesson, President and CEO
Tel. +46 46 19 21 56

Hans Kolam, CFO
Tel. +46 46 19 20 44

Active Biotech AB (publ) (NASDAQ Stockholm: ACTI) is a biotechnology company that develops first-in-class immunomodulatory treatments for oncology and immunology indications with a high unmet medical need and significant commercial potential. Active Biotech currently holds three projects in its portfolio, of which tasquinimod and laquinimod are wholly owned small molecule immunomodulators with a mode of action that includes modulation of myeloid immune cell function. The projects are in clinical development for hematological malignancies and inflammatory eye disorders, respectively. The company’s core focus is on the development of tasquinimod in myelofibrosis, a rare blood cancer, where clinical proof-of-concept studies are being prepared. Also ongoing is a clinical Phase Ib/IIa study in multiple myeloma. Laquinimod is in clinical development for the treatment of non-infectious uveitis. A clinical phase I program with a topical ophthalmic formulation is ongoing to support phase II development together with a partner. The third pipeline project is naptumomab, a targeted anti-cancer immunotherapy, partnered to NeoTX Therapeutics, which is in a phase Ib/II clinical program in patients with advanced solid tumors. Please visit www.activebiotech.com for more information.

Active Biotech AB
Scheelevägen 22, SE-223 63 Lund, Sweden
Tel: +46 (0)46 19 20 00

IMPORTANT INFORMATION
The release, announcement or distribution of this press release may, in certain jurisdictions, be subject to restrictions. The recipients of this press release in jurisdictions where this press release has been published or distributed shall inform themselves of and follow such restrictions. The recipient of this press release is responsible for using this press release, and the information contained herein, in accordance with applicable rules in each jurisdiction.
The information in this press release does not contain or constitute an offer to acquire, subscribe or otherwise trade with shares or other securities in Active Biotech. No action has been taken and measures will not be taken to permit a public offering in any other jurisdictions besides Sweden.

The information in this press release does not constitute a recommendation concerning any investor’s option with respect to the rights issue. Each investor or prospective investor should conduct his, her or its own investigation, analysis and evaluation of the business and data described in this press release and publicly available information. The price and value of securities can go down as well as up. Past performance is not a guide to future performance.

This press release is not a prospectus according to the definition in Regulation (EU) 2017/2019 (the “Prospectus Regulation”) and has not been approved by any regulatory authority in any jurisdiction. This press release neither identifies nor pretends to identify risks (direct or indirect) that can be connected to an investment in shares or other securities in Active Biotech. A prospectus will be prepared in connection with the rights issue and be reviewed and approved by the Swedish Financial Supervisory Authority, which is the national competent authority in Sweden with regard to the Prospectus Regulation. In order for investors to fully understand the potential risks and benefits associated with a decision to participate in the rights issue, any investment decision should only be made based on the information in the prospectus. Thus, investors are encouraged to review the prospectus in its entirety.

The information in this press release may not be released, published, copied, reproduced or distributed, directly or indirectly, wholly or in part, in or to the United States of America, Australia, Canada, New Zealand, Hong Kong, Japan, Switzerland, Singapore, South Africa, South Korea, Russia, Belarus or any other jurisdiction where such act would be unlawful, where such action is subject to legal restrictions or would require additional registration or other measures beyond those that follow from Swedish law. Actions in violation of these restrictions may constitute a violation of applicable securities law. No shares or other securities in Active Biotech have been registered, and no shares or other securities will be registered, under the United States Securities Act of 1933, as amended (“Securities Act”) or the securities legislation of any state or other jurisdiction in the United States of America and no shares or other securities may be offered, sold or otherwise transferred, directly or indirectly, in or into the United States of America, except under an available exemption from, or in a transaction not subject to, the registration requirements under the Securities Act and in compliance with the securities legislation in the relevant state or any other jurisdiction of the United States of America.

Within the European Economic Area (“EEA”), no offer of shares or other securities (“Securities”) is made to the public in any other country than Sweden. In other member states of the EU, such an offering of Securities may only be made in accordance with the Prospectus Regulation. In other member states of the EEA which have implemented the Prospectus Regulation in its national legislation, any offer of Securities may only be made in accordance with an applicable exemption in the Prospectus Regulation and/or in accordance with an applicable exemption under a relevant national implementation measure. In other member states of the EEA which have not implemented the Prospectus Regulation in its national legislation, any offer of Securities may only be made in accordance with an applicable exemption under national law.

In the United Kingdom, this document and any other materials in relation to the Securities described herein is only being distributed to, and is only directed at, and any investment or investment activity to which this document relates is available only to, and will be engaged in only with, “qualified investors” (within the meaning of the United Kingdom version of the Prospectus Regulation which is part of United Kingdom law by virtue of the European Union (Withdrawal) Act 2018) who are (i) persons having professional experience in matters relating to investments who fall within the definition of “investment professionals” in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); (ii) high net worth entities etc. falling within Article 49(2)(a) to (d) of the Order; or (iii) such other persons to whom such investment or investment activity may lawfully be made available under the Order (all such persons together being referred to as “relevant persons”). In the United Kingdom, any investment or investment activity to which this communication relates is available only to, and will be engaged in only with, relevant persons. Persons who are not relevant persons should not take any action on the basis of this press release and should not act or rely on it.

FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements that reflect the Company’s intentions, beliefs, or current expectations about and targets for the Company’s future results of operations, financial condition, liquidity, performance, prospects, anticipated growth, strategies and opportunities and the markets in which the Company operates. Forward-looking statements are statements that are not historical facts and may be identified by words such as “believe”, “expect”, “anticipate”, “intend”, “may”, “plan”, “estimate”, “will”, “should”, “could”, “aim” or “might”, or, in each case, their negative, or similar expressions. The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurances that they will materialize or prove to be correct. Because these statements are based on assumptions or estimates and are subject to risks and uncertainties, the actual results or outcome could differ materially from those set out in the forward-looking statements as a result of many factors. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. The Company does not guarantee that the assumptions underlying the forward-looking statements in this press release are free from errors nor does it accept any responsibility for the future accuracy of the opinions expressed in this press release or any obligation to update or revise the statements in this press release to reflect subsequent events. Readers of this press release should not place undue reliance on the forward-looking statements in this press release. The information, opinions and forward-looking statements that are expressly or implicitly contained herein speak only as of its date and are subject to change without notice. Neither the Company nor anyone else undertake to review, update, confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this press release, unless it is required by law or Nasdaq Stockholm’s rule book for issuers.

The English text is an unofficial translation of the original Swedish text. In case of any discrepancies between the Swedish text and the English translation, the Swedish text shall prevail.