TIDMNSCI
RNS Number : 9457X
NetScientific PLC
02 May 2023
Strictly embargoed until: 07.00 on 2 May 2023
NetScientific plc
("NetScientific" or "NSCI" or the "Company" or the "Group")
Glycotest, Inc. Fundraising
London, UK: NetScientific plc (AIM: NSCI), the investment and
commercialisation group with an international portfolio of
innovative life science, sustainability and industrial technology
companies, is pleased to announce that its portfolio company,
Glycotest, Inc. (Glycotest), has launched a third party fundraising
programme to raise up to $1 million (Fundraising), of which $0.25
million has already been received.
Background to Glycotest Fundraising
In 2019, NetScientific negotiated a $10 million investment and
licensing agreement (2019 Agreement) with Fosun Industrial Co.,
Limited (Fosun). Under the 2019 Agreement Fosun received a minority
stake in Glycotest and the rights to develop and commercialise
Glycotest's HCC Panel test for early-stage liver cancer
(hepatocellular carcinoma or HCC) and pipeline liver disease tests
in China, and Glycotest received royalty rights in respect thereof
whilst retaining rights to ex-China markets. This milestone-based
investment was in four tranches, with $7 million already received,
and a further $3 million to be received when additional milestones
are completed.
Subsequently, in 2022 Glycotest closed a $1.46 million secured
convertible loan agreement (2022 CLA), with Fosun lending $0.50
million and NetScientific lending $0.96 million.
The Company currently has a 62 per cent. direct interest in
Glycotest, alongside Fosun's 34 per cent. interest and a small
group of other minority shareholders.
Glycotest operational update
Glycotest is close to completing its HCC Panel clinical trial
with 20 leading medical sites (hospitals and liver treatment
centres) across the US and Israel. Through the conduct of the
clinical study, Glycotest has developed relationships with major
medical centres and highly influential clinical key opinion
leaders, which it expects will facilitate go to market. The sample
collection is now determined to be substantially complete, enabling
progress toward HCC Panel test validation.
The early Glycotest clinical studies gave encouraging results,
despite a particular problem identified in the assays' calibration
at a subcontractor laboratory, requiring some remedial fine-tuning
action and prudent consideration of alternative approaches. A
leading contract research organisation was engaged to provide an
independent perspective of the problems encountered. Potential
solutions have been identified, and further work will now be
conducted to revise assays, carry out the test validation, and
evaluate options.
Reasons for the Fundraising
The 2019 Agreement anticipated Fosun providing all Glycotest
funding needs until market launch. This arrangement required
Glycotest to undertake work and incur costs for subsequent
reimbursement. Covid-19 related disruptions included the shutdown
of medical sites for clinical trials over extended periods of time,
which in turn led to budget over-runs. Accordingly, Glycotest
requires additional funding to meet its working capital
requirements in its development of the diagnostics and other
commercialisation activities ahead of any future Fosun milestone
payments.
In line with the Group's "capital light" investment strategy,
the Company and Fosun agreed to introduce third party investors
into Glycotest through the Fundraising, without reliance on
NetScientific balance sheet. This is intended to provide Glycotest
with further capital to progress development, reduce reliance on
the traditionally slow-moving corporate co-investments, prepare for
market launch in the US, and explore wider market opportunities. It
is expected that this initial $1 million programme will put
Glycotest in a stronger position to pursue further funding from
institutional and private investors later in 2023.
Details of the Fundraising
Glycotest has agreed the terms of a secured convertible loan
agreement (2023 CLA), with third party investors being syndicated
by EMV Capital Limited (EMV Capital, the Company's wholly owned VC
firm).
Under the terms of the 2023 CLA, $250,000 has been received in a
first closing on 28 April 2023. EMV Capital has undertaken to use
its reasonable endeavours to syndicate investment of up to an
additional $250,000 to participate in the Fundraising through the
2023 CLA, which amount may be increased up to an aggregate of $1
million upon agreement by Glycotest (and subject to investor
interest).
The Company and Fosun have agreed that the 2022 CLA shall be
subordinated to the 2023 CLA for the purposes of repayment and
security.
Should the outstanding amounts under the 2023 CLA be converted
into Glycotest shares, the resulting new shareholders shall inherit
many of the minority protection rights currently provided to
Fosun.
To demonstrate its ongoing commitment to Glycotest, Fosun has
agreed with Glycotest that the next milestone payment of $1 million
under the 2019 Agreement may be released to Glycotest either upon
satisfaction of the existing milestones (under the 2019 Agreement)
or upon Glycotest providing Fosun with a licence allowing it direct
access to the IP licensed by Glycotest in certain
circumstances.
Dr Ilian Iliev, Chief Executive Officer of NetScientific,
commented :
"We are continuing to implement our strategy of hands-on support
for our portfolio companies, combined with a capital light
investment strategy that entails minimal to no reliance on
NetScientific balance sheet. Early access to effective tests for a
potentially curable disease remains an unmet clinical need in all
major healthcare markets. Glycotest is now better positioned to
leverage its highly valuable HCC Panel clinical study biobank in
realising the potential exhibited in preliminary clinical studies,
with planned commercialisation in the US, China and other
international markets"
Charles Swindell, Chief Operating Officer of Glycotest, said
:
"Glycotest welcomes this new investment facilitated by EMV
Capital and looks forward to moving its important HCC Panel program
forward. With the resources provided by this fundraise, we are now
on track to advance commercialisation of our proprietary diagnostic
tests to the advantage of patients with serious liver disease."
-Ends-
The person responsible for arranging the release of this
announcement on behalf of the Company is Ilian Iliev, Chief
Executive Officer of the Company.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF THE UK VERSION OF REGULATION (EU) NO 596/2014 WHICH
IS PART OF UK LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT
2018, AS AMED. UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A
REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS NOW
CONSIDERED TO BE IN THE PUBLIC DOMAIN.
For more information, please contact:
NetScientific
Ilian Iliev, CEO Via Belvedere Communications
WH Ireland (NOMAD, Financial Adviser and Broker)
Chris Fielding / Darshan Patel / Enzo Aliaj +44 (0)20 7220
1666
Belvedere Communications
John West / Llew Angus +44 (0) 203 008 6867
Email: nsci@belvederepr.com
About NetScientific
NetScientific plc (AIM: NSCI) is an investment and
commercialisation group with an international portfolio of
innovative life science, sustainability and technology
companies.
NetScientific identifies, invests in, and builds high growth
companies in the UK and internationally. The company adds value
through the proactive management of its portfolio, progressing to
key value inflection points, and delivering investment returns
through partial or full liquidity events.
NetScientific differentiates itself by employing a capital-light
investment approach, making judicial use of its balance sheet and
syndicating investments through its wholly owned VC subsidiary, EMV
Capital. The group secures a mixture of direct equity stakes and
carried interest stakes in its portfolio of companies, creating a
lean structure that can support a large portfolio.
NetScientific is headquartered in London, United Kingdom, and is
admitted to trading on AIM, a market operated by the London Stock
Exchange.
www.netscientific.net
About Glycotest
Glycotest is a US based liver disease diagnostics company
commercialising new and unique blood tests for life threatening
liver cancers and fibrosis-cirrhosis. Founded in 2012 by
NetScientific on technology originating at the Baruch S. Blumberg
Institute and Drexel University College of Medicine, Glycotest has
exclusive, world-wide rights to over 50 patent-protected serum
glycoprotein biomarkers, assay technology, and biomarker panels and
algorithms that exploit novel sugar-based disease signals.
Glycotest's lead product is its hepatocellular carcinoma (HCC)
panel, a biomarker panel, driven by a proprietary algorithm, for
curable early-stage HCC, the most common form of primary liver
cancer. This has outperformed current standard tests in preliminary
clinical studies. Glycotest has also developed tests for liver
fibrosis-cirrhosis and cholangiocarcinoma, the second most
prevalent form of liver cancer.
www.glycotest.com
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