Proactive Investors - N4 Pharma PLC (LON:N4P)’s stock has plunged more than 30% this morning after it announced plans to buy a majority stake in Nanogenics Ltd, a company developing “complementary” lipid and peptide-based delivery technology.
The pharmaceutical group, which is developing a novel system for delivery of oncology, gene therapy and vaccines, said it will finance the stake purchase through a subscription of new ordinary shares.
The acquisition will be financed through a £350,000 placement of 35 million new ordinary shares in the group at 0.4p each, to be sold at an issue price of 1p per placing share.
These shares are expected to be admitted to the AIM market of the London Stock Exchange on 3 October.
The company said it will conduct the placing using its “existing share authorities” rather than seeking new shareholder approval.
N4 Pharma said it will use £250,000 of proceeds to buy an initial interest of 71.25% in Nanogenics that will be reduced to 63.75% as future shares are vested to Nanogenics’ management for meeting key milestones.
The company will also provide a £50,000 loan facility to Nanogenics, which will be a two-year discretionary loan, and use the remaining funds to cover transaction costs.
Nanogenics is developing a siRNA (short interfering ribonucleic acid) product in the ophthalmology space that uses a unique lipid and peptide-based drug delivery system.
N4 Pharma's Chief Executive Officer Nigel Theobald said: “The RNA sector is an exciting one with a lot of investor and commercial interest. The addition of the Liptide® delivery system and siRNA sequence adds significant potential value to our business. As well as glaucoma, the MRTF-B gene is also responsible for fibrosis of the liver and lung, two large areas into which Nanogenics could develop its portfolio.”