TIDMRVG
RNS Number : 0909P
Retroscreen Virology Group PLC
14 August 2014
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT
FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY,
IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, NEW ZEALAND, JAPAN
OR THE REPUBLIC OF SOUTH AFRICA OR ANY JURISDICTION IN WHICH SUCH
PUBLICATION OR DISTRIBUTION IS PROHIBITED.
For immediate release 7.00am: 14 August 2014
RETROSCREEN VIROLOGY GROUP PLC
("Retroscreen" or "the Company")
CONDITIONAL PLACING TO RAISE GBP33.6 MILLION
Retroscreen Virology Group plc (AIM: RVG), the pioneer of hVIVO
Human Challenge Models ("HCMs") of disease, announces today that it
has raised, subject to certain conditions, GBP33.6 million (before
expenses) by way of a placing of 12,923,077 new Ordinary Shares
(the "New Ordinary Shares") with both new and existing
institutional shareholders at a price of 260 pence per Ordinary
Share.
The Placing Price is at a discount of 18.8 per cent. to the
closing middle market price of 320 pence per Ordinary Share on 13
August 2014, the latest date prior to this Announcement.
The New Ordinary Shares will, upon Admission, rank pari passu in
all respects with the Ordinary Shares in issue as at the date of
this Announcement, including as regards the right to receive all
dividends or other distributions declared, made or paid after
Admission. The New Ordinary Shares will represent 19.1 per cent. of
the Company's enlarged issued ordinary share capital immediately
following completion of the Placing.
The net proceeds of the Placing are expected to be approximately
GBP32.8 million and will be principally used by the Company to
accelerate its biomarker discovery programme in flu and asthma,
refine the asthma model for product validation use, initiate COPD
model development as the second airways disease opportunity and
broaden the Company's challenge agent repertoire.
The Company also announces that, in line with its expanded
vision for the business, it will be changing its name to hVIVO plc
which is currently the Company's proprietary name for its
technology platform. The name change is expected to be implemented
in Q4 2014.
A general meeting of Retroscreen to approve the Placing will be
held at the Group's registered office at Queen Mary Bio
Enterprises, Innovation Centre, 42 New Road, London E1 2AX at 10.00
a.m. on 1 September 2014.
Kym Denny, Chief Executive Officer, commented: "We are delighted
to have raised these funds through both existing and new
shareholders, together with the tremendous support and
encouragement we have received. We are at an exciting inflection
point for Retroscreen where having established and proven the hVIVO
Human Challenge Model with our clients over the past couple of
years, we now have the capability, capacity and funds to build on
this and accelerate Retroscreen's own R&D programme, leveraging
our hVIVO platform as a powerful tool in biomarker discovery and in
the development of new disease models."
Further details of the Placing are below.
For further information:
Retroscreen Virology Group plc Tel: +44 (0) 207 756
Kym Denny, Chief Executive Officer 1300
Graham Yeatman, Finance Director
----------------------------------------------- ---------------------
Numis Securities Limited Tel: +44 (0) 207 260
Michael Meade / Freddie Barnfield - Nominated 1000
Adviser
James Black / Michael Burke - Corporate
Broking
----------------------------------------------- ---------------------
1. Background to the Placing
Retroscreen is a rapidly growing life sciences company based in
the UK pioneering a technology platform called hVIVO which uses
human disease models to discover and study new drugs and diagnostic
products.
The Retroscreen business was established in 1989 and over the
last 25 years it has established itself as a market leader in
providing clinical services to third party study sponsors using
human disease models involving volunteers. To date, Retroscreen has
conducted 37 clinical studies, involving more than 1,800 volunteers
for a range of leading industry, government and academic clients.
The Directors' consider Retroscreen to be the only business built
to deliver a range of human disease models on an industrial scale.
The Group is now expanding the use of its platform to include the
discovery and development of its own proprietary therapeutic and
diagnostic products.
Drug discovery and development: a process that is fundamentally
flawed
Many industry commentators have highlighted the failings of the
pharmaceutical R&D process. It typically takes more than a
decade and often hundreds of millions of dollars to bring a
pharmaceutical drug to market. In addition, it is estimated that
only one in every fifty preclinical compounds enter clinical
testing, while less than one in five investigational new drugs in
clinical development succeed in reaching the market. A primary
reason for the high attrition rate is a fundamental lack of
efficacy, or at least the lack of demonstration of clinical
efficacy in late stage development. This high failure rate is
compounded by the fact that it can take more than five years for a
new drug candidate to progress to clinical testing, where it is
evaluated in human subjects for the first time.
The Directors' believe there are three main reasons behind this
high failure rate:
(a) The mechanisms of many diseases are insufficiently understood to choose valid drug targets
It is generally accepted by the industry that selection of the
wrong drug target is usually the main reason behind a failure to
demonstrate clinical efficacy. This is a result of the fundamental
lack of understanding of human biology, despite many technological
advances over the last few decades. The pharmaceutical industry
continues to use published literature in its search for new drug
targets. However, a publication in the Nature Reviews Drug
Discovery in 2011 indicated that there were inconsistencies in 65
per cent. of the published experimental data that were repeated,
with only 21 per cent. proving to be reproducible.
(b) In vitro and in vivo preclinical models often poorly predict clinical efficacy
The industry relies on non-human preclinical models to discover
and validate new drug candidates before they enter clinical
testing. These models act as key gate points in the decision making
process for progressing a new drug candidate through early stage
development. However, the relevance of preclinical models to the
complex human biological system is limited such that drugs that
show preclinical promise are more likely than not to fail in
humans. Leading industry commentators, including the FDA, believe
that the majority of these preclinical models have low predictive
ability and the results from such models do not translate to the
humans. In particular, one report has claimed that the mouse model
has been totally misleading and years and billions of dollars have
been wasted following false leads as a result.
(c) Failure to identify the correct target patient population for drug treatment
A third common reason for drugs failing to show efficacy in
clinical studies is in the design of the studies themselves,
including inappropriate patient selection. In most disease areas,
patients are recruited for clinical studies based on a phenotypic
classification of disease, which often includes a range of criteria
including symptom type and severity. However, because these
selection criteria do not differentiate patient types at the
molecular level, a range of inappropriate patient types can be
included in a clinical study due to the lack of appropriate
stratification of the disease. For a drug that targets a specific
subset of patients, this is likely to mean that a clinical study
will be underpowered and therefore unlikely to detect an efficacy
signal on an all-comers basis. This is commonly described as the
one-size fits all approach to drug development although diseases
are increasingly being recognised as syndromes, consisting of a
range of disease types. For drugs that fail to hit efficacy
endpoints, a retrospective analysis may identify a specific subset
of patients that responded in the study and this can help guide its
future development but for some drugs, this is too late in the
process.
hVIVO has the potential to transform pharmaceutical R&D
productivity
The Directors believe that the best way to address this high
attrition rate and to shorten product development time is to (a)
accelerate the demonstration of proof of concept for new drugs and
diagnostics and (b) identify more appropriate biomarkers to enable
next generation drug and diagnostic products to be developed. In
the Directors' opinion, hVIVO is ideally placed to address both of
these fundamental challenges.
Retroscreen'shVIVO platform puts humans at the heart of the
modelling of disease. The platform functions in the following way:
volunteers are recruited for research studies in which a safe
challenge agent is administered to elicit a self-limiting
infection, such as 'flu', or to trigger a disease episode or
exacerbation, such as in asthmatic subjects. The studies are
conducted under tightly controlled, quarantine conditions with full
medical supervision. The benefits of this approach, compared to
field-based studies where patients are only recruited when they
become symptomatic, are that (a) the healthy or pre-challenge
subject acts as an internal control by providing a pre-disease
baseline; (b) the laboratory like conditions means the presentation
of symptoms together with cellular and molecular changes in
response to the challenge agent can be tightly correlated; and (c)
multiple, high quality samples can be taken from a range of body
compartments throughout the course of the disease, or disease
episode. The Directors believe that combining these benefits in one
platform creates a powerful R&D tool for product discovery and
development.
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