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Equity Raise of US$10.0 million

Change of Name to Biodexa Pharmaceuticals PLC

Company to Remain Listed on NASDAQ; Proposed Cancellation of Admission to Trading on AIM and General Meeting

ABINGDON, OXFORDSHIRE / ACCESSWIRE / Decembr 13, 2022 / Midatech Pharma PLC (AIM:MTPH.L)(Nasdaq:MTP), an R&D biotechnology company focused on improving the bio-delivery and biodistribution of medicines, is pleased to announce that the Company has conditionally agreed to acquire the entire issued and to be issued share capital of Bioasis Technologies Inc. ("Bioasis") for consideration of, in aggregate, approximately C$7.4 million (c.£4.4 million) (the "Acquisition") (together, the "Enlarged Group"). The Acquisition consideration will be satisfied by the issue of 75,884,553 new ordinary shares of 0.1 pence each in the capital of the Company ("Ordinary Shares"), at an exchange ratio of 0.9556 Ordinary Shares for every 1 Bioasis Share (the "Exchange Ratio").

Bioasis' lead product is Epidermal Growth Factor, which is being developed for optic neuritis associated with multiple sclerosis (MS). Bioasis is also developing xB3 delivery technology for various rare and orphan neurodegenerative diseases and has entered into licensing and co-development agreements with potential payments, should various performance conditions and milestones be met, totalling in excess of US$200 million plus royalties on net sales with Chiesi Farmaceutici SpA, Prothena Corporation plc and Neuramedy Co. Ltd. Bioasis also has a research agreement with Janssen Pharmaceutica NV, a Johnson & Johnson subsidiary.

Highlights

• Conditional agreement for Midatech to acquire Bioasis, a TSX-V traded biopharmaceutical company focused on research and development of products for the treatment of rare and orphan diseases of the nervous system.
• Bioasis has partnerships with pharmaceutical companies with potential payments, should various performance conditions and milestones be met, totalling in excess of US$200 million and the Enlarged Group intends to focus on rare and orphan therapeutics with two clinical stage candidates initially focused on CNS diseases.
• The Board believes that the Acquisition is a compelling strategic opportunity to advance the Company's repurposed strategy and is expected to deliver a number of key benefits to Midatech and its shareholders, including:
  • transition from a drug delivery platform-based company to a therapeutics company;
  • a focus on rare and orphan diseases, conferring advantages such as:
    • smaller, lower cost studies;
    • higher in-market prices; and
    • marketing exclusivity for seven years and 10 years in the US and Europe, respectively;
  • less reliance on R&D collaborations and licences with third parties;
  • improved news flow including clinical data; and
  • lower combined overheads.
• Proposed change of name to Biodexa Pharmaceuticals PLC, reflecting the Enlarged Group's rare disease therapeutics strategy.
• Two-stage fundraising of US$10.0 million (c.£8.2 million) subject, inter alia, to Shareholder approval, in order to provide the Enlarged Group with additional working capital and to repay certain of Bioasis' outstanding indebtedness.
• Proposed a cancellation of its admission to trading on AIM and retain listing on NASDAQ

Midatech is also pleased to announce a two-stage fundraising of, in aggregate, US$10.0 million (c.£8.2 million) gross, comprising: (i) gross proceeds of approximately US$0.4 million (c.£0.3 million) raised pursuant to a Registered Direct Offering utilising the Company's existing share capital authorities; and (ii) gross proceeds of approximately US$9.6 million (c.£7.9 million) pursuant to a Private Placement, subject, inter alia, to Shareholder approval, in order to provide the Enlarged Group with additional working capital and to repay certain of Bioasis' outstanding indebtedness.

Commenting, Stephen Stamp, CEO of Midatech, said:

"We are very pleased to be announcing the proposed acquisition of Bioasis, together with an associated US$10 million equity fundraising and other proposals that the Midatech board believe presents a compelling strategic opportunity aimed at delivering significant benefits to Midatech and its shareholders.

"By combining the two groups to create Biodexa Pharmaceuticals, we have the opportunity to reposition the enlarged group as an emerging biotech company focused on the development of therapeutics for rare diseases, supported by Midatech and Bioasis' enabling drug delivery platforms. We continue to believe there is substantial value to be unlocked from Midatech's MTX110, particularly in our ongoing phase I clinical trial in GBM, and to leverage our Q-Sphera technology. In combination with Bioasis' promising development pipeline we have the opportunity to create a much stronger group and transition from a drug delivery platform-based company to a therapeutics company.

"Whilst the proposals require a complex process and a number of structural changes that will take time to complete, we strongly believe they are in shareholder's best interests and we look forward to making further announcements in due course."

Proposed Acquisition of Bioasis

The Company has conditionally agreed to acquire the entire issued and to be issued share capital of Bioasis, a TSX-V traded biopharmaceutical company focused on research and development of products for the treatment of rare and orphan diseases of the nervous system, for an aggregate estimated consideration of approximately C$7.4 (c.£4.4 million), based on the Exchange Ratio. The Acquisition consideration will be satisfied by the issue of, in aggregate, 75,884,553 new Ordinary Shares, equating to 0.9556 Ordinary Shares being issued for every outstanding Bioasis Share. Based middle market closing price per Ordinary Share on AIM of 5.85 pence on 12 December 2022, being the last trading day prior to this date of this announcement, this represents a price of C$0.09 for every Bioasis Share. The Acquisition will be implemented by way of a statutory Plan of Arrangement in accordance with the laws of the Province of British Columbia, Canada.

Bioasis is a corporation existing under the laws of British Columbia and its shares are traded on the TSX-V under the stock symbol "BTI". For its financial year ended 28 February 2022, Bioasis reported losses of C$2.96 million and had net liabilities of C$1.92 million.

The Acquisition is conditional, inter alia, upon the Arrangement being approved by the Court and the Bioasis Securityholders, the Private Placement and the approval by Existing Shareholders of the Resolutions at the Company's General Meeting, including the cancellation of admission to trading of the Ordinary Shares on AIM, expected to be held in Q1 2023.

With effect from the AIM Cancellation, Sijmen de Vries will resign as a Director of the Company and Deborah Rathjen and Mario Saltarelli will be appointed as Directors of the Company.

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SOURCE: Midatech Pharma PLC