Oncimmune Holdings plc (LON:ONC), a leading early cancer detection company developing and commercialising its proprietary EarlyCDT(R) liquid biopsy platform technology, today announces that it has entered into the licence agreement and completed on the GBP7m equity subscription with Genostics Company Limited (“Genostics”). This is the first tranche of a total GBP10m equity investment in Oncimmune which was agreed as part of a license, distribution, manufacturing and future development agreement for all products related to Oncimmune’s EarlyCDT(R) platform for the People’s Republic of China announced on 2 January 2018.
As approved at the General Meeting held on 22 January, Genostics is investing GBP10m in Oncimmune by way of subscription for 6,410,256 new ordinary shares at a price of GBP1.56 per ordinary share, a 49% premium to the share price of 105p at market close on 29 December 2017 (“Genostics Subscription”). The second tranche of GBP3m will be paid by 30 March 2018. An application has been made for the 4,487,179 Ordinary Shares under this first subscription to be admitted to trading on AIM (“Admission”) and this is expected to happen on 2 February 2018.
Under the terms of the licence, Oncimmune will receive a royalty of 8% to 12.5% on the gross revenue subject to aggregate minimum royalty payments over the first six years post market entry of GBP15.7 million and GBP5 million (index linked) per year thereafter. Genostics will start to sell EarlyCDT(R)-Lung within 36 months of the date of the agreement, subject to China FDA approval, although both parties expect this to be sooner.
As part of the agreement with Genostics, GeneTech(Shanghai), a subsidiary of GGH, will be responsible for the manufacturing, marketing and distribution of EarlyCDT(R)-Lung. In addition to this and in collaboration with Oncimmune, a potential to transfer of manufacturing to China for that market and the rest of the world will be explored, as well as research and development to progress the Oncimmune EarlyCDT(R) platform technology into new areas of prevalent cancers. It has also been agreed that a representative from Genostics will be appointed to the Board of Directors of Oncimmune. An announcement will be made once this is finalised.
Cancer in China
In China, early diagnosis has the potential to make a significant impact as mortality increases sharply with advanced disease.
— Cancer is the leading cause of death in China and is a major public health problem with incidence increasing
— It is estimated that there are more than 7,500 cancer deaths per day in China; and there were 4.3 million new cancer cases and more than 2.8 million cancer deaths in China in 2015
-- Lung cancer remains the #1 killer in China of both men and women -- Over 700,000 new cases of lung cancer diagnosed annually
o 2015: new cases 733,000 – Mortality 610,000
-- Approximately 350 million adults were current smokers in 2015
(Different sources: Chinese Journal of Cancer 2016 and Cancer Statistics in China, 2015)