BONESUPPORT™ announces initial public offering on Nasdaq Stockholm and a related prospectus
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Stockholm, 11 June, 2017
The Board of Directors of BONESUPPORT HOLDING AB (publ) (“BONESUPPORT” or the “Company”) has applied for the Company’s shares to be admitted to trading on Nasdaq Stockholm’s main market. Nasdaq Stockholm has approved the Company’s application subject to customary conditions. The objective is to broaden the shareholder base through a new share issue of SEK 500 million (the “Offering”) with the subsequent fund raising to be used to further support BONESUPPORT’s continued development and the expansion of the Company’s operations.
First day of trading in the Company’s shares is expected to be 21 June 2017. Today, the Company publishes a prospectus, the price range and other terms of the Offering.
Swedbank Robur Fonder AB (“Swedbank Robur”) has, subject to certain customary conditions, committed to be Cornerstone Investor and subscribe for shares in the Offering corresponding to an amount of SEK 130 million, however not more than corresponding to 9.7 percent of the total number of shares in the Company after the Offering. The existing shareholders, HealthCap V L.P., Stiftelsen Industrifonden, Lundbeckfond Invest A/S, Carl Westin Ltd, Tredje AP-fonden, Tellacq AB, OFP V Advisor AB and Arctic Funds PLC (jointly the “Investing Shareholders”), have agreed to, subject to certain customary conditions, subscribe for shares in the Offering corresponding to a total amount of SEK 106 million.
BONESUPPORT in brief
BONESUPPORT is an innovative and rapidly growing commercial stage orthobiologics1 company, based in Lund. The Company develops and commercializes innovative injectable bioceramic bone graft substitutes that remodel to the patient’s own bone and have the capability of eluting drugs directly into the bone void. BONESUPPORT’s marketed synthetic bone graft substitutes CERAMENT™ BONE VOID FILLER (BVF), CERAMENT G and CERAMENT V are all based on the Company’s novel and proprietary CERAMENT technology platform.
The Company’s products are targeting a large addressable market opportunity across trauma, chronic osteomyelitis (bone infection), revision arthroplasty (replacement of a joint prosthesis) and infected diabetic foot. The Company’s research and development is focused on the continuing development and refinement of its existing technology to extend its use into additional indications by the elution of other drugs and therapeutic agents.
BONESUPPORT’s products are based on an innovative technology backed by an intellectual property portfolio of approximately 100 registered and/or pending patents. BONESUPPORT has a nine year track record of safety and efficacy in treating patients with an estimated number of 30,000 procedures performed to date with its products worldwide based on sales data.
BONESUPPORT’s total sales increased from SEK 41 million in 2014 to SEK 105 million in 2016, representing a compound annual growth rate of 60 percent.
The Company’s financial target is to achieve revenue exceeding SEK 500 million in the financial year 2020, with a gross margin exceeding 85 percent and a positive operating profit.
1Orthobiologics are products that support tissue healing and restoration by harnessing regenerative potential with the body’s own cells to replace or regenerate musculoskeletal structures.The Offering
• The Offering is composed of an offering to the general public in Sweden and an offering to institutional investors in Sweden and abroad.
• The Offering comprises not more than 18,518,519 new shares in BONESUPPORT, corresponding to SEK 500 million.
• Furthermore, the Company has issued an over-allotment option of not more than 2,777,778 new shares, corresponding to SEK 75 million and not more than 15 percent of the total number of shares in the Offering (the “Over-allotment Option”).
• If the Offering is fully subscribed and the Over-allotment Option is fully utilized, the Offering will comprise not more than 21,296,297 new shares, corresponding to a total value of not more than SEK 575 million, before issue expenses.
• The final price in the Offering will be established through a book-building procedure and is expected to be set within the range of SEK 27–31 per share (the “Offering price”), resulting in a market capitalization of BONESUPPORT of approximately SEK 1,358–1,474 million (before dilution), provided that the Offering is fully subscribed and the Over-allotment Option is fully utilized. The price in the Offering to the general public will not exceed SEK 31 per share. The final Offering price is expected to be announced by way of a press release on or around 21 June 2017.
• Swedbank Robur has, subject to certain customary conditions, committed to be Cornerstone Investor and subscribe for not more than 4,814,814 shares in the Offering corresponding to an amount of SEK 130 million. If the Offering is fully subscribed, the Over-allotment Option is not exercised and assuming a price in the Offering corresponding to the midpoint of the price range (i.e. SEK 29), the undertakings correspond to 26.0 percent of the number of shares in the Offering and 9.7 percent of the total number of shares in the Company after completion of the Offering. Swedbank Robur’s undertaking is conditional upon that Swedbank Robur’s total ownership in the Company, after the completion of the undertaking, does not exceed 9.7 percent. If the subscription rate in the Offering would lead to that Swedbank Robur’s total ownership in the Company exceeds 9.7 percent, the undertaking will be downwards adjusted correspondingly.
• Investing Shareholders have agreed to, subject to certain customary conditions, subscribe for not more than 3,925,926 shares in the Offering, equivalent in aggregate to SEK 106 million. If the Offering is fully subscribed, the Over-allotment Option is not exercised and assuming a price in the Offering corresponding to the midpoint of the price range (i.e. SEK 29), the undertakings correspond to 21.2 percent of the number of shares in the Offering and 7.9 percent of the total number of shares in the Company after completion of the Offering. Tredje AP-fonden’s undertaking is conditional upon that Tredje AP-fonden’s total ownership in the Company, after the completion of the undertaking, does not exceed 9.7 percent. If the subscription rate in the Offering would lead to that Tredje AP-fonden’s total ownership in the Company exceeds 9.7 percent, the undertaking will be downwards adjusted correspondingly.
• Swedbank Robur and Investing Shareholders have together agreed to subscribe for shares in the Offering equivalent to SEK 236 million. Based on full subscription of the Offering, that the Over-allotment option is not exercised and assuming a price in the Offering corresponding to the midpoint in the price range (i.e. SEK 29), the commitment equates to 8,137,931 shares, which corresponds to 47.2 percent of the number of shares in the Offering, and 17.6 percent of the total number of shares in the Company after the Offering.
• A prospectus with full terms and conditions is published today 11 June 2017.
• The subscription period for the general public in Sweden is expected to be 12-19 June 2017 and the subscription period for institutional investors is expected to be 12-20 June 2017.
• The first day of trading on Nasdaq Stockholm is expected to be 21 June 2017 and the shares will trade under the ticker “BONEX”.
• The expected settlement day of the Offering is 26 June 2017.
• The Offering is conditional upon it generating proceeds of a minimum of SEK 250 million after issue expenses.
Richard Davies, CEO of BONESUPPORT comments:
“BONESUPPORT’s rapid sales growth reflects the clear benefits that our CERAMENT based products deliver to patients, surgeons and payers when used to treat bone voids. We believe our IPO will provide us with the funds we need to execute our strategy of driving sales in both the US and Europe, generating additional clinical data to enhance the competitive positioning of our products in trauma and revision arthroplasty and completing the FORTIFY study, which is a key to gaining US approval for CERAMENT G. Our stronger financial position will also allow us to invest in our pipeline of products that are designed to promote bone growth, an area of significant unmet medical need. We believe that by executing this strategy we can deliver our 2020 financial targets and continue to generate significant value for our shareholders.”
About BONESUPPORT
BONESUPPORT is a fast growing commercial-stage orthobiologics company targeting major orthopedic markets in the US and Europe. The Company specializes in innovative injectable bioceramic bone graft substitutes with targeted drug elution directly into the bone void that have been validated in clinical practice.
BONESUPPORT has developed CERAMENT, a bioceramic bone scaffold to treat bone voids, which remodels to host bone in six to twelve months. CERAMENT is a patented and scalable technology platform that can be combined with drugs and other therapeutic agents to protect or enhance the healing effect. Three main commercial products have been developed based on the CERAMENT platform: CERAMENT BVF, CERAMENT G and CERAMENT V. CERAMENT G and CERAMENT V have all the key properties of CERAMENT BVF and in addition contain the antibiotics gentamicin and vancomycin respectively.
CERAMENT BVF, CERAMENT G and CERAMENT V continue to contribute to increasing sales, rapidly driven by a growing body of compelling clinical data. Based on sales data, the Company estimates that CERAMENT based products have so far been used in 30,000 procedures to date. These products generated SEK 113.8 million in the 12 month period ending 31 March 2017, a 61.5 percent increase over the 12 month period ending 31 March 2016.
CERAMENT BVF is currently marketed in the US as well as in Europe and the rest of the world. In the US, CERAMENT BVF is marketed through a distribution agreement with Zimmer Biomet which is a global company within musculoskeletal health care. CERAMENT G and CERAMENT V are marketed in several markets in Europe and the rest of the world but not yet approved for the US market. In August 2016, the Company received approval from the FDA to begin a Investigational Device Exemption (IDE) study with CERAMENT G in order to gain US approval through a PMA (premarketing approval) pathway. The study (the FORTIFY study) was initiated in February 2017 and the first patient was enrolled in May 2017.
In addition to the Company’s three commercialized products, BONESUPPORT has a pipeline of four additional product candidates with significant commercial potential. The product candidates are all based on the CERAMENT platform and are currently in pre-clinical development phase.
The primary focus of the Company’s strategy is to continue to drive sales of current products in existing and new markets and generate further clinical data via various clinical studies, including the CERTiFy study, and HEOR2 data to highlight the compelling benefits that CERAMENT delivers. In parallel, BONESUPPORT is conducting the FORTIFY study to support a planned PMA filing in the US for CERAMENT G, with the aim of receiving approval by 2021. The Company will initiate CERAMENT V’s regulatory pathway process post the approval of CERAMENT G. The Company also aims to advance two of its product pipeline candidates by capitalizing on the unique drug eluting properties of the CERAMENT platform. Moreover, the Company intends to increase marketing spend and to expand its commercial infrastructure to continue its revenue growth.
2Health economic and outcome research data.Reasons for the Offering
The execution of BONESUPPORT’s marketing initiatives and strategy through to 2021 requires significant investments. To secure the financing needed to deliver its growth strategy and to support the Company’s working capital needs over the next twelve months, the Company has decided to carry out a new share issue in connection with the listing on Nasdaq Stockholm. Assuming that the Offering is fully subscribed, the gross proceeds will amount to SEK 500 million and SEK 461 million after issue expenses. The Company intends to use such proceeds in the following order of priority and with the approximate percentage of the issue proceeds stated.
1. Conduct the FORTIFY study to support the PMA filing in the US for CERAMENT G and initiate CERAMENT V clinical studies: approximately 25-30 percent; and support build-out of commercial infrastructure with additional employees within marketing and sales, etc.: approximately 10 percent.
2. Other clinical data and HEOR data generation: approximately 30 percent.
3. Increase marketing spend in the Company’s key markets: approximately 20-25 percent.
4. Advance pipeline of two new product candidates: approximately 10 percent.
The proceeds from the Offering will strengthen the Company’s financial position and, assuming that the Offering is fully subscribed, are estimated to be sufficient to drive continued high growth of sales of the current product portfolio, to complete the FORTIFY study, and to potentially gain marketing approval for CERAMENT G in the US by 2021 as well as reaching a point where the Company becomes cash flow positive.
Prospectus
A prospectus, containing complete terms and conditions of the Offering, is made public today. The prospectus is available on BONESUPPORT’s website, ABG Sundal Collier’s website under the section for ongoing transactions, Carnegie’s website for ongoing offerings, as well as Avanza’s and Nordnet’s respective websites.
Indicative timetable
Application period for the general public in Sweden: 12 – 19 June 2017
Application period for institutional investors: 12 – 20 June 2017
Announcement of the final Offering price and first day of trading on Nasdaq Stockholm: 21 June 2017
Settlement day: 26 June 2017
Advisors
Carnegie Investment Bank AB (publ) and ABG Sundal Collier AB are acting as Joint Global Coordinators and Joint Bookrunners in the Offering. Setterwalls Advokatbyrå AB is legal advisor to the Company. Baker McKenzie Advokatbyrå KB is legal adviser to the Joint Global Coordinators and Joint Bookrunners.
For more information contact:
Richard Davies, CEO
Tel: +46 (0) 46 286 53 71
Email: richard.davies@bonesupport.com
Björn Westberg, CFO
Tel: +46 (0) 46 286 53 60
Email: bjorn.westberg@bonesupport.com
Important information
This announcement is not an offer to sell or a solicitation of any offer to buy any securities issued by BONESUPPORT HOLDING AB (publ) in any jurisdiction where such offer or sale would be unlawful.
This announcement and the information contained herein is not for distribution in or into the United States, Australia, Canada, Japan or any other jurisdiction in which such distribution would be unlawful or would require registration or other measures. The securities referred to in this announcement have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and accordingly may not be offered or sold in the United States absent registration or an exemption from the registration requirements of the Securities Act and in accordance with applicable U.S. state securities laws. The Company does not intend to register any offering in the United States or to conduct a public offering of securities in the United States.
In any EEA Member State, other than Sweden, that has implemented Directive 2003/71/EC as amended (together with any applicable implementing measures in any member State, the “Prospectus Directive”), this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Directive.
In the United Kingdom, this announcement and the information that this announcement contains is only directed at persons in the United Kingdom that are (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”) or (ii) high net worth entities, and other persons to whom this announcement may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “Relevant Persons”). This communication must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this communication relates is available only to Relevant Persons and will be engaged in only with Relevant Persons. Persons distributing this communication must satisfy themselves that it is lawful to do so.
Any offering of the securities referred to in this announcement will be made by means of a prospectus. This announcement is not a prospectus for the purposes of the Prospectus Directive. A prospectus prepared in accordance with the Prospectus Directive has been published and is held available at www.bonesupport.com. Investors should not subscribe for any securities referred to in this announcement except on the basis of information contained in the aforementioned prospectus.
Certain matters discussed in this announcement constitute forward-looking statements. Forward looking statements are statements that are not historical facts and may be identified by words such as “believe”, “expect”, “anticipate”, “intends”, “estimate”, “will”, “may”, “continue”, “should” and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. The information, opinions and forward-looking statements contained in this announcement speak only as at its date, and are subject to change without notice.
In connection with the offer or sale of securities referred to herein, the Joint Global Coordinators may overallot securities/conduct stabilization or effect transactions with a view to supporting the market price of the securities at a level higher than that which might otherwise prevail. Any stabilization action or over-allotment will be conducted by the Joint Global Coordinators in accordance with all applicable laws and rules.
