On October 17, 2022 Xspray Pharma AB reported the company has based on the authorisation granted by the annual general meeting of Xspray on 19 May 2022, and in accordance with what the Company indicated in the interim report for the second quarter of 2022, successfully carried out a fully subscribed directed share issue at a subscription price of SEK 50 per share (the "Issue") (Press release, Xspray, OCT 17, 2022, View Source [SID1234650114]). The subscription price has been negotiated at arm’s length with investors and is based on the Board’s assessment, following discussions with the Company’s financial advisor, at market conditions.

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

A number of Swedish institutional investors, including Third Swedish National Pension Fund (AP3), Flerie Invest AB and Östersjöstiftelsen have subscribed for shares in the Issue. The Board has carefully considered alternative financing solutions, including the prospects to carry out a rights issue. The Board has concluded that a rights issue would take a significantly longer time to complete and entail a higher risk for a materially adverse effect on the share price, particularly in light of the market volatility and the challenging market conditions. Another important reason for deviating from the shareholders’ preferential rights is to further enhance the shareholder base with an institutional investor in the form of the Third Swedish National Pension Fund (AP3). In light of the above, the Board has made the assessment that a directed share issue with deviation from the shareholders’ preferential rights creates the best conditions to secure the Company’s continued financial stability in the current market climate and to enable market preparing activities before the upcoming launch on the American market. Overall, the Board considers that the Issue contributes to creating value for all the Company’s shareholders and is beneficial for the Company.

The Company intends to use the net proceeds from the Issue primarily to:

Market preparing activities before the upcoming launch on the American market
Continued development of the Company’s product portfolio with an initial focus on the product candidate XS003, which is the next product to be launched on the American market
To enhance the Company’s financial stability
The Issue is expected to raise proceeds for the Company of SEK 100 million, before transaction costs. The Issue will result in an increase in the number of shares in Xspray of 2,000,000, from 20,680,408 to 22,680,408, and an increase in the share capital by SEK 2,000,000 from SEK 20,680,408 to SEK 22,680,408 resulting in a dilution of approximately 8.8 percent.

Zonda Partners has acted as Bookrunner in connection with the Issue. Advokatfirman Vinge has acted as legal advisor to Xspray Pharma.