Oxford - Oxford Biomedica plc (LSE: OXB) ('Oxford Biomedica' or 'the Company'), a quality and innovation-led cell and gene therapy CDMO, and Institut Merieux SA today announce that they have entered into exclusive negotiations with respect to the proposed acquisition by Oxford Biomedica of ABL Europe SAS, a pure play European CDMO with specialised expertise in the development and manufacturing of solutions for biotechs and biopharma including viruses for gene therapy, oncolytic viruses and vaccine candidates, in exchange for Oxford Biomedica ordinary shares.
This Proposed Transaction would form part of Oxford Biomedica's transformation to be a world-leading quality focused and innovation-led CDMO in the cell and gene therapy field.
Dr. Frank Mathias, Chief Executive Officer of Oxford Biomedica, commented: 'As part of our transformation into a pure-play CDMO in 2023, this potential acquisition augments our position as a world-leading quality and innovation-led CDMO in the cell and gene therapy field. ABL Europe offers the opportunity to gain a footprint in the EU and free up Oxford Biomedica's capacity to meet increasing client demand, as well as significantly increasing our capabilities and flexibility for clients. Our goal is to deliver excellent client experiences and accelerate the time it takes for our clients to get their products to market. We are excited about the possibility of welcoming ABL Europe staff to our group and Institut Merieux as a long-term shareholder and turn to 2024 with great excitement and confidence.'
Michel Baguenault, Chief Executive Officer of Institut Merieux, said: 'Institut Merieux is delighted with this potential acquisition to partner with Oxford Biomedica, a CDMO world leader. We are giving ABL Europe's teams and its French sites new development prospects and access to innovative technologies that will enable them to broaden their offering to biopharmaceutical companies. As a reference shareholder in Oxford Biomedica, and in keeping with its public health mission, Institut Merieux intends to support the company's development in fields of activity that present major challenges for patients.'
Proposed Transaction Rationale
ABL Europe is a European CDMO specialised in viral vector development and manufacturing, with facilities in Lyon and Strasbourg. Focused on delivering GMP-compliant viral vectors from early-stage to market, ABL Europe plays a pivotal role in the success of client-focused gene and immunotherapy solutions. The company's service suite includes the production of bulk drug substances, the precise fill-finish of drug products, robust process and assay development, bioanalytical testing for product release, and comprehensive regulatory guidance. ABL Europe currently works on more than 10 cell and gene therapy programs spanning disease areas including more than 6 different vector types.
In line with Oxford Biomedica's strategy to be a world-leading quality focused and innovation-led CDMO in the cell and gene therapy field, the Proposed Transaction would, if completed: Together with Oxford Biomedica bring an established client-focused, quality and innovation led CDMO renowned for its expertise in viral vector development and manufacturing, particularly in areas including Pox Virus, MVA, Vaccinia, Adenovirus and AAVs, further expanding the Company's international viral vector offering; Increase Oxford Biomedica's capacity in process and analytical development and early stage manufacturing to enable the Company's full growth potential and support the overall growth of the viral vector sector; addresses client needs for process development arising from increased client demand; Broaden the Company's customer base in Europe in the cell and gene therapy space and offer cross-selling opportunities with ABL Europe's existing customer base, forecasted revenues of c.EUR15million for the year ended 31 December 2023; Expand the Company's international footprint into the European Union with sites in Lyon and Strasbourg, France, and allow Oxford Biomedica to achieve European batch release for clients and significantly improve its business development position with an enhanced ability for in-market QC release of drug product in the US, the EU and the UK; Unlock synergies from (i) the utilisation and optimisation of existing sites and (ii) the combined expertise and know-how of both companies to further develop cell lines, viral vector and vaccine platforms, with the addition of over 100 CDMO experts including scientists, engineers and commercial functions.
Proposed Transaction Terms
Under the Proposed Transaction, Oxford Biomedica would acquire ABL Europe for a consideration of EUR15million, (including the value of EUR10million of pre-completion cash funding from Institut Merieux in ABL Europe for, amongst other things, development capex) in exchange for Oxford Biomedica new ordinary shares (the 'Consideration Shares'). The Consideration Shares would be issued at a price being the higher of (i) 407.4p per share being the 6-month Volume Weighted Average Price ('VWAP') to market close on 19th September 2023 and (ii) the VWAP between date of this announcement and the day before the date of completion of the Proposed Transaction (the 'Completion').
As part of the Proposed Transaction, Institut Merieux would also commit to provide Oxford Biomedica with EUR20 million of additional funding, to cover capex and potential future operating losses in relation to the proposed acquisition of ABL Europe by means of an equity subscription (the 'Deferred Equity Subscription'). Pursuant to the Deferred Equity Subscription, Institut Merieux would provide the additional funding by the end of Q3 2024, or such earlier date requested by Oxford Biomedica subject to a 10 business day notice to Institut Merieux (the 'Deferred Subscription Date'), in exchange for Oxford Biomedica ordinary shares (the 'Deferred Subscription Shares'). The Deferred Subscription Shares would be issued at a price being the 30-day VWAP to closing on the day before the Deferred Subscription Date.
In addition, under the Proposed Transaction, Institut Merieux would further build its ownership of Oxford Biomedica by acquiring up to EUR10million of additional Oxford Biomedica existing ordinary shares in the market from the date of this announcement to 31 March 2024. Institut Merieux intends to build its ownership of Oxford Biomedica shares through purchases in the open market so as to reach, in aggregate, approximately 10.0 per cent of the Company's enlarged issued share capital.
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