Oxford Cannabinoid
Technologies Holdings plc
("OCT" or the
"Company")
Intended Cancellation of
Listing
The Board of Oxford Cannabinoid
Technologies Holdings plc (LSE:OCTP), a clinical stage
biopharmaceutical company focused on the development and
commercialisation of innovative cannabinoid medicines, today
announces that it has applied to the Financial Conduct Authority
("FCA") and London Stock Exchange plc ("LSE") to effect a
cancellation of listing of its ordinary shares on the Standard
segment of the FCA's Official List (the "Standard List") and
trading on the Main Market for listed securities of the LSE ("Main
Market") ("Cancellation").
The Directors have recently
completed an internal strategic review exercise which focused on
addressing how the Company might best seek to ensure the growth of
the Company, with a particular focus on how to attract new
investment to advance our drug development programmes in a timely
manner. Given the continued turbulence in the UK public markets,
the Directors unanimously concluded that the Cancellation will be
in the best interests of the Company, its business and existing
shareholders as a whole.
The Directors must stress that the
Company continues with its drug development pipeline as
communicated, has no near-term cash flow concerns and remains
debt-free. Detailed rationale for the Cancellation is
provided in the letter to Shareholders which is set out in full in
Appendix 1 to this announcement.
As a Standard Listed company, OCT is
not required to obtain the approval of shareholders for the
Cancellation. Pursuant to Listing Rule 5.2.8R, the Company is
required to give at least 20 business days' notice of the intended
cancellation of its listing. It is therefore anticipated that the
Cancellation will become effective at 8.00am on 6 June 2024.
Following the Cancellation, the Company will no longer be subject
to the regulatory and statutory regime which applies to companies
admitted to the Standard segment of the Official List and traded on
the Main Market.
Clarissa Sowemimo-Coker, CEO said,
"The UK capital markets are facing particularly challenging
times and many biopharma businesses like ours are re-evaluating
whether it is the right home for them. We believe that the market
is significantly undervaluing OCT. This has a negative impact on
our ability to raise the capital necessary to drive our programmes
at a price that the Board believes would be acceptable noting the
current market capitalisation. In turn, these market conditions
compromise our ability to deliver on our core mission - bringing
help to people living with debilitating conditions. We anticipate
that as an unlisted company, a far larger pool of capital may be
available to us, and therefore it is right for us to make this
change."
The information communicated within
this announcement is deemed to constitute inside information as
stipulated under the Market Abuse Regulations (EU) No 596/2014
which is part of UK law by virtue of the European Union
(Withdrawal) Act 2018. Upon publication of this announcement, this
inside information is now considered to be in the public
domain.
The Directors of the Company accept
responsibility for the content of this announcement.
Enquiries:
Oxford Cannabinoid Technologies Holdings plc
|
+44 (0)20 3034 2820
|
Clarissa Sowemimo-Coker
(CEO)
|
clarissa@oxcantech.com
|
|
|
Hybridan LLP, Financial Adviser and Broker
|
|
Claire Louise Noyce
|
+44 (0)20 3764 2341
|
|
|
Acuitas Communications, Financial PR
|
020 3745 0293 / 07799
767676
|
Simon Nayyar
|
simon.nayyar@acuitascomms.com
|
Jake Davis
|
jake.davis@acuitascomms.com
|
Appendix 1
THIS DOCUMENT IS IMPORTANT AND
REQUIRES YOUR IMMEDIATE ATTENTION.
If you are in any doubt about the
contents of this letter, its likely impact on you and/or the action
you should take, you should immediately consult your stockbroker,
bank, solicitor, accountant, fund manager or other appropriate
independent financial adviser authorised under the Financial
Services and Markets Act 2000 if you are resident in the United
Kingdom or, if not, another appropriately authorised independent
financial adviser in your own jurisdiction.
If you have sold or otherwise
transferred all of your ordinary shares in Oxford Cannabinoid
Technologies Holdings plc (or will
have sold or transferred all such shares prior to implementation of
the proposals described below), please pass this document to the
purchaser or transferee, or to the person who arranged the sale or
transfer, for onward transmission to the purchaser or
transferee.
8 May 2024
Dear Shareholder,
PROPOSED CANCELLATION OF STANDARD LISTING
As you will be aware, Oxford
Cannabinoid Technologies Holdings plc ("OCT" or the "Company") is listed on the Standard
segment of the FCA's Official List (the Standard List) with its shares being
admitted to trading on the Main Market of the London Stock
Exchange. This listing has been in place since May
2021.
Further to the regulatory news
service announcement made on 8 May 2024, the Company is writing to
advise shareholders of its intention to cancel the listing of its
ordinary shares on the Standard List (the Cancellation) and to trading on the
Main Market of the London Stock Exchange (the LSE listing).
As a Standard Listed company, the
Company is not required to obtain the approval of shareholders for
the Cancellation and is instead required only to provide the FCA
with 20 business days' prior notice. The directors of the
Company (the Directors) unanimously consider the
Cancellation to be in the best interests of the Company, its
business and existing shareholders as a whole.
The Cancellation will take effect at
8am on 6 June 2024.
Background
OCT's mission has always been driven
by a desire to bring help to people living with debilitating
conditions, as efficiently and effectively as possible. The
Company's listing on the Main Market of the London Stock Exchange
in May 2021 was predicated on our ambition to gain access to new
investors in public markets as the most effective way of
accelerating our drug development programme in order to achieve
this outcome.
We are proud to have founded and
grown our business in the United Kingdom which, as an international
centre of excellence for life sciences, has proven to be a good
place to build a growth business during its early stages. Since its
IPO, OCT has accumulated an impressive range of proof points
clearly demonstrating the strategic long-term value of the Company.
We have completed our first clinical trial for our lead programme,
OCT461201, and will shortly be commencing a Phase I clinical trial
for our second programme, OCT130401 in line with what we have
previously announced to the market.
The continuing turbulence in the UK
public markets has had a punitive effect on sentiment in biopharma
as a sector, and on quoted biopharma businesses in particular, and
has exerted continuous, irrational and regressive pressure on our
share price. This has constrained the Company's ability to sustain
a sensible valuation in a manner that reflects its record of
scientific and clinical achievements, its growing pipeline of
innovations and valuable portfolio of proprietary assets. In turn,
this has impeded our ability to raise investment on equitable terms
in order to advance our drug development programmes in a timely
way.
The Board believes that the
Company's current market capitalisation on the Main Market in no
way reflects the prospective value of its current pipeline of four
drug development programmes, or the value predicated by our
proprietary portfolio of almost five hundred cannabinoid
derivatives. As at the date of this letter, there were
1,088,415,644 ordinary shares in issue and the market
capitalisation of the Company as at 7 May 2024, at the bid price of
0.35p, was approximately £3.8m. Against this backdrop, it is
hard for the Board to overlook a recent research report by Edison
on OCT that valued the company in excess of £27 million on the
basis of just one of OCT's clinical programmes.
The Directors, therefore, believe
that the inherent value of the Company is likely to be well in
excess of the current market capitalisation and, without the
ongoing burden of the listed regulatory environment and associated
costs of listing, the Company could grow and further enhance its
business. This has led the Board to reconsider whether the
public markets, at this time, provide the right framework within
which ground-breaking UK medical research and innovation can best
be pioneered, delivered and sustained over time.
Strategic Review and Evaluation of Listing
The Directors have undertaken a
thorough review to evaluate the advantages and disadvantages of
retaining the Admission to trading of the Ordinary Shares on the
Main Market.
The Directors consider that the key
drawbacks of retaining the Company's listing on the Main Market
include the following:
· since
OCT was listed in May 2021, there have been significant changes in
the UK public markets. There has been a noticeable decrease in
liquidity, access to capital, and institutional interest in the
biopharma growth sector. There are a number of our peers in the
life sciences sector, some with late stage Phase 2-3 assets who
have delisted and cited a lack of institutional support in the
sector. The Company's Directors are of the opinion that the current
public market valuation of the Company is not an accurate
reflection of its value and poses a significant obstacle to the
Company's plans and aspirations;
· based
on feedback from potential investors, the Directors believe that
OCT would be a more attractive proposition as an unlisted company.
Furthermore, the Directors believe that there could be a much
larger pool of available capital if OCT were an unlisted company as
compared to being a listed one;
· there
has been limited liquidity in the Ordinary Shares for some time
and, as a result, the Directors believe that continued Admission to
trading on the Main Market no longer sufficiently affords the
Company the advantage of providing wider or more cost-effective
access to capital in the short to medium-term;
· as a
result of the limited liquidity in Ordinary Shares highlighted
above, the listing of the Ordinary Shares on the Main Market does
not necessarily offer investors the opportunity to trade in
meaningful volumes and does not appear therefore to be an active
market at the smaller market capitalisation. With low trading
volumes, the Company's share price can move up or down
significantly following trades of small volumes of Ordinary
Shares;
· the
considerable cost, management time and the legal and regulatory
burden associated with maintaining the Company's Admission to
trading on the Main Market are now disproportionate to the benefits
to the Company, given that the continued listing is unlikely to
provide the Company with significantly wider or more cost-effective
access to capital than alternative funding options; and
· the
above negative impacts resulting from being listed give rise to
adverse influences on the business in terms of operational
activities, long term strategy and future plans.
Prior to progressing with our
cancellation of the LSE listing, the Directors consulted a number
of the Company's larger shareholders and our proposals received
widespread support. The outcome of these consultations has
been taken into account in the key considerations mentioned
above. In particular, recent investor, Cantheon Capital LLC, a
US-based healthcare sector specialist, remains supportive of the
Company and will be funding OCT130401's Phase I clinical trial, as
previously announced, as OCT transitions to being an unlisted
company.
Accordingly, and following careful
consideration, the Board considers the disadvantages associated
with maintaining the Admission of the Ordinary Shares to trading to
be disproportionate when compared to the perceived benefits of
being listed on the Main Market, and the Board has therefore
unanimously concluded that the Cancellation is in the best
interests of the Company and its Shareholders as a
whole.
Process for, and principal effects of,
Cancellation
The Directors are aware that certain
Shareholders may be unable or unwilling to hold Ordinary Shares
once the Cancellation becomes effective. Such Shareholders should
consider selling their interests in the market prior to the
Cancellation becoming effective.
Under the Listing Rule 5.2.8, the
Cancellation can only take place after the expiry of a period of 20
Business Days from the date on which notice of the Cancellation is
given. Accordingly, the last day of dealings in the Ordinary Shares
on the Main Market will be 5 June 2024, and the Cancellation will
become effective at 8.00 a.m. on 6 June 2024.
The principal effects of the
Cancellation will be that:
· there
will no longer be a formal market mechanism enabling Shareholders
to trade their shares through the Main Market;
· the
regulatory and financial reporting regime applicable to companies
whose shares are admitted to trading on the Main Market will no
longer apply;
· Shareholders will no longer be afforded the protections given
by the Listing Rules, such as the requirement to be notified of
certain material developments or events (including substantial
transactions, financing transactions, related party transactions
and certain acquisitions and disposals) and the separate
requirement to seek shareholder approval for certain other
corporate events such as reverse takeovers or fundamental changes
in the Company's business;
· Hybridan will continue to be the Company's financial adviser
but will cease to be the Company's broker;
· the
Company will no longer be required to disclose publicly any change
in major shareholdings in the Company under the Listing Rules or
the Disclosure Guidance and Transparency Rules;
· the
Company will no longer be subject to UK MAR regulating inside
information and other matters;
· in the
absence of a formal market and quote, it may be more difficult for
Shareholders to determine the market value of their investment in
the Company at any given time; and
· the
Cancellation may have taxation or other commercial consequences for
Shareholders. Shareholders who are in any doubt about their tax
position should consult their own professional independent tax
adviser.
The above considerations are not
exhaustive and Shareholders should seek their own independent
advice as to whether continuing to hold shares in the Company
following the Cancellation is suitable or whether the Cancellation
has any adverse tax consequences for them. Tax rules can
change and the precise tax implications for shareholders will
depend on their particular circumstances.
The Company will remain registered
as a public limited company with the Registrar of Companies in
England & Wales in accordance with and subject to the Companies
Act 2006, notwithstanding the Cancellation. Shareholders should
also note that the City Code on Takeovers and Mergers will continue
to apply to the Company following the Cancellation.
Transactions in the Ordinary Shares post the proposed
Cancellation
If a shareholder retains their
Ordinary Shares following the Cancellation, although the Ordinary
Shares will remain freely tradeable, they will no longer be
tradeable on the Main Market.
The Directors are aware that the
Cancellation will make it more difficult to buy and sell Ordinary
Shares in the Company following the Cancellation. Therefore, the
Company is exploring the implementation of a Matched Bargain
Facility after the Cancellation to assist Shareholders to trade in
the Ordinary Shares. If implemented, details will be made available
to Shareholders on the Company's website at
www.oxcantech.com.
Shareholders will continue to be
able to hold their shares in uncertificated form (i.e. in CREST)
and should check with their existing stockbroker whether they are
willing or able to trade in unquoted shares.
Shareholders should also be aware
that any such Matched Bargain Facility could be withdrawn at a
later date. It is the Company's intention, if implemented, to make
this available for a period of 12 months initially.
Conclusion
Today's announcement represents an
exceptional opportunity for the Company to reset, to engage with
investors who have the appetite to develop a long-term relationship
with OCT, and to build a valuation that appropriately reflects and
celebrates the Company's track record and assets, supporting our
mission as a business developing and commercialising
ground-breaking biopharma research.
In due course, the Company expects
to re-list on a regulated investment exchange that recognises the
true underlying value of the business. We remain a British company,
and we are proud to be part of the UK life sciences sector and
believe in its strength and depth. We also note a perceived rising
tide of informed market sentiment that appears to suggest quoted
companies may realise a better reflection of their intrinsic
valuations by moving their listing to North America. The US,
specifically NASDAQ, provides an attractive option with its deep
pool of life science capital markets.
The Board is not at this point
making any firm decisions as to where it may in the future re-list.
The Board remains supportive of the UK listed and quoted markets
and understands that changes in the UK listed landscape may present
further opportunities in future.
After Cancellation, the Directors
will retain all their ordinary shares and hope to benefit from any
future growth. They encourage shareholders to have confidence in
the future of the business and thank them for their continual
support and loyalty. Investors are welcome to continue to follow
and support the growth story of the business as a privately held
company.
Yours faithfully,
Julie Pomeroy
Independent Non-Executive Chair, Oxford Cannabinoid
Technologies Holdings plc