Vaccinogen Completes Initial Closing of an $80 Million Financing
Initial Closing is for $10 Million
Benjamin S. Carson, MD, appointed Chairman of the Board
Andrew L. Tussing named Chief Executive Officer
FREDERICK, Md., Aug. 25, 2014 /PRNewswire/ -- Vaccinogen, Inc., (OTC.QB: VGEN) a cancer immunotherapy development company, announced today that it completed the initial closing of a private placement of $80 million of units and common stock. Vaccinogen received gross proceeds of $10 million in this first closing.
Vaccinogen is preparing to start ACTIVE, a confirmatory Phase IIIb pivotal study of the patient-specific vaccine in patients with resectable, Stage 2 colon cancer under a U.S. Food and Drug Administration (FDA) Special Protocol Assessment (SPA) classification. In a previous Phase III study, OncoVAX® reduced recurrence of cancer from approximately one in three to one in ten Stage 2 colon cancer patients[i].
A Stockholm-based investor group known as The Investment Syndicate ("TIS"), representing certain family offices and led by Swedish entrepreneur Anders Halldin, paid the initial $10 million in equity financing following Vaccinogen's satisfaction of certain closing conditions. The remaining $70 million will be delivered in four separate closings upon completion of certain milestones.
Vaccinogen also announced significant changes to its management team and Board of Directors.
Benjamin S. Carson, Sr., MD, a noted pediatric neurosurgeon and existing Vaccinogen Medical Advisory Board member, has been appointed to the Board of Directors and named Chairman of the Board. He is an Emeritus Professor of Neurosurgery, Oncology, Plastic Surgery and Pediatrics at the Johns Hopkins School of Medicine and serves on the board of directors of numerous organizations, including Kellogg's, and Costco.
"Cancer disguises itself well as non-threatening human tissue. OncoVAX pulls off that mask, exposes it as a threat and provides the immune system a roadmap to effectively destroy the cancer. Based on Phase III OncoVAX data published in The Lancet, I believe that Vaccinogen's unique tumor-cell vaccine approach to 'train' the body to attack its own cancer has the potential to significantly reduce recurrences and mortality in colon cancer and many other pervasive malignancies affecting the global population," said Dr. Carson.
Vaccinogen co-founder and President Andrew L. Tussing, has been appointed to the Board of Directors and named Chief Executive Officer (CEO) to replace Michael G. Hanna, Jr., Ph.D., inventor of OncoVAX and co-founder of Vaccinogen. Dr. Hanna has stepped down as CEO and as Chairman of the Board effective as of this initial closing. Dr. Hanna will continue to serve as a director and will now be Chairman Emeritus. Dr. Hanna will also remain on Vaccinogen's Medical Advisory Board and serve as special advisor to the CEO to assure his transfer of technical knowledge to new clinical and technical personnel to be hired for development of cancer therapeutic products.
Mr. Halldin has been appointed to the Board of Directors as the TIS representative under which he will also serve as Vice Chairman. It is currently anticipated that Mr. Halldin will also serve as Chairman of the compensation, nominating and audit committees.
Alan Cohen, Daniel Fitzgerald and Daniel Kane have each resigned from Vaccinogen's Board of Directors effective with this initial closing.
"Vaccinogen thanks Mr. Cohen, Mr. Fitzgerald and Mr. Kane for their years of service on the Vaccinogen Board of Directors and wishes them all well in their other endeavors," Tussing said. "This new funding round represents a potentially transformative investment that if fully realized could support Vaccinogen through the final stages of development of OncoVAX, which, if approved by the FDA, we believe would be the first-ever patient-specific immunotherapy to prevent recurrence of colon cancer. Tussing continued, "we look forward to building on Dr. Hanna's discoveries and dedication that brought OncoVAX to this point and to working with leading cancer centers around the world to launch this important confirmatory Phase IIIb study in the coming months."
Since co-founding Vaccinogen in 2007, Mr. Tussing has overseen the financial and operational management of the company and co-led several initiatives including establishing and maintaining the Dutch cGMP manufacturing facility, leading Vaccinogen's capital raising efforts, including this financing and Vaccinogen's successful efforts to become a public company.
At this first closing, Vaccinogen issued units of common stock and warrants priced at $5.50 per unit consisting of 1,869,159 shares of common stock and warrants to purchase 545,454 shares of common stock at an exercise price of $6.05 per share. The remainder of the securities are issuable in a series of up to four additional closings following the achievement of additional milestones and will also be priced at $5.50 per unit or share of common stock, as applicable. The second closing of $10 million in units of common stock and warrants is expected by September 25, 2014 and is not subject to any milestones. The last 3 closings for $60 million consist of common stock only. TIS also has the option to invest an additional $30 million of Vaccinogen common stock under the same pricing terms as the $80 million financing until February 25, 2015, which, if exercised, would result in aggregate gross proceeds of $110 million in this financing.
For additional information on the TIS financing and related management and board reorganization, please refer to the Company's Current Reports on Form 8-K filed on April 28, 2014 and August 25, 2014 with the U.S. Securities and Exchange Commission at the Edgar web site at www.SEC.gov, which filings can also be found on Vaccinogen's web site at www.vaccinogeninc.com.
About Vaccinogen, Inc.
Vaccinogen, Inc. is a cancer vaccine company that is clinically testing its OncoVAX® treatment which is designed to prevent the recurrence of colon cancer and potentially other solid tumors. It is a patented process that leverages a patient's own live tumor cells to launch a broad immune response against colon cancer. The Company believes that OncoVAX, at an optimum dose and regimen, is the first colon cancer vaccine to demonstrate effectiveness in both preventing cancer recurrence after surgical resection of the primary tumor and addressing the diversity of cancer cells. Five clinical studies of OncoVAX, including a Phase III trial with the optimum dose and regimen, have been completed to date. The Company expects to begin a pivotal Phase IIIb trial under an FDA Special Protocol Assessment (SPA) with the U.S. Food and Drug Administration (FDA) within sixty (60) days of obtaining adequate funding. More information is available at www.vaccinogeninc.com.
Forward Looking Statement
Some of the statements contained in this document are forward-looking statements within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. Vaccinogen has based these forward-looking statements largely on its expectations and projections about future events and financial trends affecting the financial condition and/or operating results of our business. Forward-looking statements involve risks and uncertainties; particularly those risks and uncertainties inherent in the process of discovering, developing and commercializing drugs that are safe and effective for use as human therapeutics. In addition, these forward-looking statements involve risks and uncertainties relating to the financing described herein, including, without limitation, the risk that the conditions to closing may not be met. There are important factors that could cause actual results to be substantially different from the results expressed or implied by these forward-looking statements. Vaccinogen does not undertake any obligation to update this forward-looking information.
[i] Vermorken JB, Claessen AM, Van Tinteren H, et al. Active specific immunotherapy for stage II and stage III human colon cancer: a randomised trial. Lancet. 1999;353(9150):345-50.
SOURCE Vaccinogen, Inc.