BELLUS Health Inc. Announces $12 Million Rights Offering To Common Shareholders
Signs Standby Purchase Agreement for $8 million
Company Announces VP, Finance
LAVAL, QC, July 7 /CNW Telbec/ - BELLUS Health Inc. (TSX: BLU) today
announced that it is filing a preliminary short form prospectus in each of the
provinces of Canada for a $12,080,018 million rights offering to holders of
its common shares. All currency figures reported in this press release are
reported in Canadian dollars.
Under the terms of the rights offering, one right will be issued for each
common share outstanding as of a record date which is yet to be determined.
Holders of common shares of BELLUS Health resident in Canada (the "Eligible
Shareholders") will be entitled to exercise rights to subscribe for common
shares of BELLUS Health. Each 0.80 of a right will entitle Eligible
Shareholders to purchase one common share of BELLUS Health at $0.185 (the
"Subscription Price"). The Subscription Price represents a 25% discount off
the volume weighted average price of BELLUS Health's common shares on the
Toronto Stock Exchange during the five (5) trading days immediately preceding
this announcement. The rights will be exercisable for at least 21 days
following the date of mailing of the final prospectus.
Due to applicable securities law and regulatory restrictions, only
Eligible Shareholders will be able to exercise rights. The rights agent will
attempt to sell the rights of holders of common shares other than Eligible
Shareholders and remit the proceeds of any such sale, net of applicable
expenses to such other shareholders. Due to such securities law and regulatory
restrictions, the offering is not available to holders of securities of BELLUS
Health other than holders of common shares.
The rights offering is subject to regulatory approval, including that of
the Toronto Stock Exchange.
BELLUS Health also announced today the appointment of Mr. François
Desjardins, C.A., to the position of Vice President, Finance. Mr. Desjardins
has held the position of Director, Finance and Control at BELLUS Health since
2003. Mr. Desjardins has worked for companies such as Provigo Inc., Crane
Canada Inc., and Coopers & Lybrand, and has close to 15 years experience in
the biopharmaceutical industry, six of which stem from his tenure as Corporate
Controller at Biochem Pharma.
Details of the Rights Offering
Assuming exercise of all rights, BELLUS Health will receive net proceeds
of approximately $11.7 million pursuant to the offering, after payment of the
estimated expenses of the offering. BELLUS Health intends to use the net
proceeds from the offering as follows: approximately $3 million to fund the
international commercialization of VIVIMIND(TM) (homotaurine); approximately
$5.1 million to fund current clinical development programs, including
approximately $1.7 million for the development of NC-503, a product candidate
in development for the treatment of Type II diabetes and certain features of
metabolic syndrome, approximately $2 million for the development of NRM8499, a
prodrug of tramiprosate for the treatment of Alzheimer's disease, and
approximately $1.4 million for other research and development (R&D) projects.
The remainder will be used for general, administrative, corporate and working
capital purposes. However, such allocation is subject to change, based upon,
among other things, results of pre-clinical and clinical trials, VIVIMIND(TM)
sales performance, successful signing of collaboration agreements and capital
needs from time to time. Expenses related to KIACTA(TM) are not included in
the use of proceeds, as these are dependent upon the signing of a partnership
agreement.
Each of Victoria Square Ventures Inc. ("VSVI") and Vitus Investments III
Private Limited ("Vitus"), a corporation whose shares are beneficially owned
by Mr. Carlo Bellini, have entered into separate standby purchase commitments
with BELLUS Health whereby they have agreed, on a separate and individual and
not solidary basis, to purchase such of the common shares that are not
otherwise purchased under the rights offering for a subscription price of
$4,000,000 each for an aggregate amount of $8,000,000.
FMRC Family Trust ("FMRC") (a trust of which Dr. Francesco Bellini, the
Chairman, President and Chief Executive Officer of BELLUS Health, is a
beneficiary) and a subsidiary of FMRC currently own an aggregate of 5,981,254
common shares of BELLUS Health representing approximately 11.5% of the
52,237,918 outstanding common shares of BELLUS Health and FMRC owns 20,124,000
series A convertible preferred shares of BELLUS Health. Vitus owns $10,307,500
principal amount of convertible notes of BELLUS Health due in 2014. VSVI owns
6,897,918 common shares of BELLUS Health representing approximately 13.2% of
the outstanding common shares of BELLUS Health, $10,807,500 principal amount
of convertible notes of BELLUS Health due in 2014 and 21,672,000 series A
convertible preferred shares of BELLUS Health. If the convertible notes and
preferred shares held by Vitus, FMRC, FMRC's subsidiary and VSVI were to be
exercised or converted at their current conversion prices at their maturity,
FMRC and its subsidiary would hold an aggregate of 33,013,825 common shares of
BELLUS Health, representing approximately 9.9% of the outstanding common
shares of BELLUS Health, Vitus would hold an aggregate of 103,660,321 common
shares of BELLUS Health, representing approximately 31.1% of the outstanding
common shares of BELLUS Health, and VSVI would hold an aggregate of
144,698,632 common shares of BELLUS Health, representing approximately 43.4%
of the outstanding common shares of BELLUS Health, before giving effect to the
issuance of shares in connection with the rights offering or to the conversion
or exercise of any of the other outstanding notes, warrants and series A
preferred shares of BELLUS Health.
To the extent shareholders do not exercise rights under the offering, the
holdings of the standby purchasers will be increased accordingly.
The rights offering will result in the reduction of the conversion price
of the convertible notes of BELLUS Health due in 2026, render such notes
immediately convertible and result in the reduction of the conversion price of
the convertible notes due in 2014 held by VSVI and Vitus and the reduction of
the exercise price of certain of the outstanding warrants of BELLUS Health.
This press release is not an offer to sell or a solicitation of an offer
to buy any securities of the Corporation.
THE SECURITIES WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933 (THE "1933 ACT") AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR
TO A U.S. PERSON IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT.
About BELLUS Health
BELLUS Health is a global health company focused on the development and
commercialization of products to provide innovative health solutions to
address critical unmet needs.
To Contact BELLUS Health
For additional information on BELLUS Health and its drug development
programs, please call the Canada and United States toll-free number
1-877-680-4500 or visit the Web Site at www.bellushealth.com.
Certain statements contained in this news release, other than statements
of fact that are independently verifiable at the date hereof, may constitute
forward-looking statements. Such statements, based as they are on the current
expectations of management, inherently involve numerous risks and
uncertainties, known and unknown, many of which are beyond BELLUS Health
Inc.'s control. Such risks include but are not limited to: the impact of
general economic conditions, general conditions in the pharmaceutical and/or
nutraceutical industry, changes in the regulatory environment in the
jurisdictions in which the BELLUS Health Group does business, stock market
volatility, fluctuations in costs, and changes to the competitive environment
due to consolidation, that actual results may vary once the final and
quality-controlled verification of data and analyses has been completed, as
well as other risks disclosed in public filings of BELLUS Health Inc.
Consequently, actual future results may differ materially from the anticipated
results expressed in the forward-looking statements. The reader should not
place undue reliance, if any, on any forward-looking statements included in
this news release. These statements speak only as of the date made and BELLUS
Health Inc. is under no obligation and disavows any intention to update or
revise such statements as a result of any event, circumstances or otherwise,
unless required by applicable legislation or regulation. Please see the Annual
Information Form of BELLUS Health Inc. for further risk factors that might
affect the BELLUS Health Group and its business.
For further information: Michelle Stein, Specialist, Corporate Communications, (450) 680-4573, mstein@bellushealth.com
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