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Midatech Pharma PLC Announces Proposed Acquisition of Bioasis Technologies Inc

Wednesday, December 14, 2022

Midatech Pharma PLC, an R&D biotechnology company focused on improving the bio-delivery and biodistribution of medicines, is pleased to announce that the Company has conditionally agreed to acquire the entire issued and to be issued share capital of Bioasis Technologies Inc. ("Bioasis") for consideration of, in aggregate, approximately C$7.4 million (c.£4.4 million) (the "Acquisition") (together, the "Enlarged Group"). The Acquisition consideration will be satisfied by the issue of 75,884,553 new ordinary shares of 0.1 pence each in the capital of the Company ("Ordinary Shares"), at an exchange ratio of 0.9556 Ordinary Shares for every 1 Bioasis Share (the "Exchange Ratio").

Bioasis' lead product is Epidermal Growth Factor, which is being developed for optic neuritis associated with multiple sclerosis (MS). Bioasis is also developing xB3 delivery technology for various rare and orphan neurodegenerative diseases and has entered into licensing and co-development agreements with potential payments, should various performance conditions and milestones be met, totalling in excess of US$200 million plus royalties on net sales with Chiesi Farmaceutici SpA, Prothena Corporation plc and Neuramedy Co. Ltd. Bioasis also has a research agreement with Janssen Pharmaceutica NV, a Johnson & Johnson subsidiary.

Highlights

Conditional agreement for Midatech to acquire Bioasis, a TSX-V traded biopharmaceutical company focused on research and development of products for the treatment of rare and orphan diseases of the nervous system.
Bioasis has partnerships with pharmaceutical companies with potential payments, should various performance conditions and milestones be met, totalling in excess of US$200 million and the Enlarged Group intends to focus on rare and orphan therapeutics with two clinical stage candidates initially focused on CNS diseases.
The Board believes that the Acquisition is a compelling strategic opportunity to advance the Company's repurposed strategy and is expected to deliver a number of key benefits to Midatech and its shareholders, including:
transition from a drug delivery platform-based company to a therapeutics company;
a focus on rare and orphan diseases, conferring advantages such as:
    smaller, lower cost studies;
    higher in-market prices; and
    marketing exclusivity for seven years and 10 years in the US and Europe, respectively;
    less reliance on R&D collaborations and licences with third parties;
    improved news flow including clinical data; and
    lower combined overheads.
Proposed change of name to Biodexa Pharmaceuticals PLC, reflecting the Enlarged Group's rare disease therapeutics strategy.
Two-stage fundraising of US$10.0 million (c.£8.2 million) subject, inter alia, to Shareholder approval, in order to provide the Enlarged Group with additional working capital and to repay certain of Bioasis' outstanding indebtedness.
Proposed a cancellation of its admission to trading on AIM and retain listing on NASDAQ

Midatech is also pleased to announce a two-stage fundraising of, in aggregate, US$10.0 million (c.£8.2 million) gross, comprising: (i) gross proceeds of approximately US$0.4 million (c.£0.3 million) raised pursuant to a Registered Direct Offering utilising the Company's existing share capital authorities; and (ii) gross proceeds of approximately US$9.6 million (c.£7.9 million) pursuant to a Private Placement, subject, inter alia, to Shareholder approval, in order to provide the Enlarged Group with additional working capital and to repay certain of Bioasis' outstanding indebtedness.

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