Oxford Biomedica, Institut Merieux enter exclusive negotations for ABL Europe

Oxford Biomedica and Institut Merieux have entered into exclusive negotiations with respect to the proposed acquisition by Oxford Biomedica of ABL Europe, a pure play European CDMO with specialised expertise in the development and manufacturing of solutions for biotechs and biopharma including viruses for gene therapy, oncolytic viruses and vaccine candidates, in exchange for Oxford Biomedica ordinary shares. This Proposed Transaction would form part of Oxford Biomedica’s transformation to be a world-leading quality focused and innovation-led CDMO in the cell and gene therapy field. In line with Oxford Biomedica’s strategy to be a world-leading quality focused and innovation-led CDMO in the cell and gene therapy field, the Proposed Transaction would, if completed: Together with Oxford Biomedica bring an established client-focused, quality and innovation led CDMO renowned for its expertise in viral vector development and manufacturing, particularly in areas including Pox Virus, MVA, Vaccinia, Adenovirus and AAVs, further expanding the Company’s international viral vector offering; Increase Oxford Biomedica’s capacity in process and analytical development and early stage manufacturing to enable the Company’s full growth potential and support the overall growth of the viral vector sector; addresses client needs for process development arising from increased client demand; Broaden the Company’s customer base in Europe in the cell and gene therapy space and offer cross-selling opportunities with ABL Europe’s existing customer base, forecasted revenues of c.EUR 15million for the year ended 31 December 2023; Expand the Company’s international footprint into the European Union with sites in Lyon and Strasbourg, France, and allow Oxford Biomedica to achieve European batch release for clients and significantly improve its business development position with an enhanced ability for in-market QC release of drug product in the US, the EU and the UK; Unlock synergies from the utilisation and optimisation of existing sites and the combined expertise and know-how of both companies to further develop cell lines, viral vector and vaccine platforms, with the addition of over 100 CDMO experts including scientists, engineers and commercial functions. Under the Proposed Transaction, Oxford Biomedica would acquire ABL Europe for a consideration of EUR 15million, in exchange for Oxford Biomedica new ordinary shares. The Consideration Shares would be issued at a price being the higher of 407.4p per share being the 6-month Volume Weighted Average Price (“VWAP”) to market close on 19th September 2023; and the VWAP between date of this announcement and the day before the date of completion of the Proposed Transaction. As part of the Proposed Transaction, Institut Merieux would also commit to provide Oxford Biomedica with EUR 20 million of additional funding, to cover capex and potential future operating losses in relation to the proposed acquisition of ABL Europe by means of an equity subscription. Pursuant to the Deferred Equity Subscription, Institut Merieux would provide the additional funding by the end of Q3 2024, or such earlier date requested by Oxford Biomedica subject to a 10 business day notice to Institut Merieux, in exchange for Oxford Biomedica ordinary shares. The Deferred Subscription Shares would be issued at a price being the 30-day VWAP to closing on the day before the Deferred Subscription Date. In addition, under the Proposed Transaction, Institut Merieux would further build its ownership of Oxford Biomedica by acquiring up to EUR 10million of additional Oxford Biomedica existing ordinary shares in the market from the date of this announcement to 31 March 2024. Institut Merieux intends to build its ownership of Oxford Biomedica shares through purchases in the open market so as to reach, in aggregate, approximately 10.0 per cent of the Company’s enlarged issued share capital. The signature of definitive documents remains subject to certain customary conditions, including the completion of a French works council process by ABL Europe and the completion of due diligence by Oxford Biomedica. Subject to the entry into definitive transaction documents, Completion is currently expected to take place during the fourth quarter of 2023, conditional upon obtaining certain regulatory approvals. The Proposed Transaction would be immediately revenue accretive to Oxford Biomedica.