SAN DIEGO and VANCOUVER, Aug. 16, 2013 /PRNewswire/ - Sophiris Bio Inc. (Sophiris, TSX: SHS) (the "Company" or "Sophiris"), a biopharmaceutical company developing a clinical-stage, targeted treatment for the symptoms of benign prostatic hyperplasia (BPH or enlarged prostate), today announced that it has entered into an underwriting agreement with Citigroup and Leerink Swann, as joint book-running managers, with respect to an offering (the "Offering") of 13,000,000 common shares of the Company (the "Shares") at a price of US$5 per Share (the "Purchase Price") for aggregate gross proceeds of approximately US$65 million. Stifel and Lazard Capital Markets are acting as co-managers. The Company has also granted to the underwriters a 30-day over-allotment option (the "Option") to purchase up to an additional 1,950,000 Shares at the Purchase Price, for additional aggregate gross proceeds of up to approximately US$9.75 million. The Company will file a final short form prospectus with the securities regulatory authorities in British Columbia and Ontario in connection with the Offering.
The Company's common shares will trade on the NASDAQ Global Market under the symbol "SPHS" beginning on August 16, 2013. The Company intends to use the net proceeds from the offering to advance the development of its candidate for treatment of BPH, PRX302, to service its outstanding debt owing under a secured promissory note and for general and administrative purposes. The offering is scheduled to close on or about August 23, 2013 and remains subject to certain conditions including, but not limited to, the receipt of approval of the Toronto Stock Exchange (the "TSX").
Certain of the Company's existing shareholders and their affiliated entities have indicated an interest in purchasing up to approximately $22.4 million Shares in the Offering at the Purchase Price. These shareholders include Tavistock Life Sciences Co. ("Tavistock") who is expected to participate (but not lead) the Offering at a level that is expected to dilute its current ownership position by approximately 50%. Together with its affiliates, Tavistock currently holds approximately 961,538 Shares or 30.5% of the Company's issued and outstanding Shares on a non-diluted basis. Following the closing of the Offering, Tavistock is expected to own approximately 2,561,538 Shares or 15.9% of the issued and outstanding Shares on a non-diluted basis, or approximately 14.2% of the issued and outstanding Shares assuming the full exercise of the Option.
The Offering was priced in the context of the market and was negotiated on an arm's length basis. The Purchase Price represents a discount of approximately 49.1% from the volume weighted average price on the TSX for the 5 trading days ending on August 15, 2013. The Shares issuable under the Offering constitute approximately 413% of the Company's currently issued and outstanding Shares on a non-diluted basis, or approximately 475% if the Option is exercised in full. It is not expected that any new shareholders will materially affect the control of the Company (as such term is defined in the policies of the TSX) as a result of the Offering.
The Company was required to receive shareholder approval for the terms of Offering pursuant to the provisions of the TSX Company Manual (the "Manual") because (i) the TSX has decided under Section 606(b) of the Manual to apply the private placement provisions of Section 607 of the Manual to the Offering; (ii) the Purchase Price is at a discount that is greater than the maximum applicable discount under Section 607(e) of the Manual; (iii) Section 607(g)(i) requires shareholder approval because the aggregate number of Shares issuable under the Offering is greater than 25% of the number of Shares which are outstanding, on a non-diluted basis, prior to the Offering and the price per security is less than the market price; and (iv) Section 607(g)(ii) requires shareholder approval because the number of Shares issued to insiders in the Offering is greater than 10% of the number of Shares which are issued and outstanding, on a non-diluted basis, prior to the date of closing of the Offering. Shareholder approval has been obtained by the written consent of more than 50% of the holders of the Company's issued and outstanding Shares, including Tavistock.
Following the closing of the Offering, the only entity that is expected to hold more than 10% of the Company's issued and outstanding Shares is Tavistock, which will no longer materially affect control of the Company.
To the Company's knowledge, there is no voting trust or similar agreement or arrangement to be entered into in connection with the Offering.
A registration statement relating to these securities was declared effective by the U.S. Securities and Exchange Commission on August 15, 2013. This offering is being made by means of a prospectus, copies of which may be obtained from Citigroup Global Markets Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York, 11717, or by email at email@example.com or by phone at 1-800-831-9146, and Leerink Swann LLC, Attention: Syndicate Department, One Federal Street, 37th Floor, Boston, Mass., 02110, or by email at Syndicate@Leerink.com or by phone at 1-800-808-7525.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
Sophiris Bio Inc. is a biopharmaceutical company developing a clinical-stage, targeted treatment for the symptoms of benign prostatic hyperplasia (BPH or enlarged prostate), which it believes is an unsatisfied market with significant market potential. Sophiris' lead candidate for BPH, PRX302, is designed to be as efficacious as pharmaceuticals, less invasive than the surgical interventions, and without the sexual side effects seen with existing treatments. Sophiris is planning to begin a Phase 3 clinical trial of PRX302 in the second half of 2013 subject to raising additional capital.
Certain statements included in this press release may be considered forward-looking. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such statements, and therefore these statements should not be read as guarantees of future performance or results. All forward-looking statements are based on Sophiris' current beliefs as well as assumptions made by and information currently available to Sophiris and relate to, among other things, our ability to meet the closing conditions of the Offering, anticipated financial performance, business prospects, strategies, regulatory developments, market acceptance and future commitments. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Due to risks and uncertainties, including the risks and uncertainties identified by Sophiris in its public securities filings; actual events may differ materially from current expectations. Sophiris disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
SOURCE Sophiris Bio, Inc.