Full Press Release Details
from BiondVax CEO regarding BiondVax's proposed Rights Offering
Dear BiondVax Shareholder,
you are likely aware, BiondVax recently announced its intention to conduct a US$20 million rights offering and, under limited
circumstances, a related financing of not more than US$10 million. The success of this is important as it should provide the
company with sufficient capital to cover operating costs through 2020, including the 2nd cohort of its pivotal phase 3
clinical trial with a larger number of participants, thereby enhancing the statistical power of the trial.
I have copied below an FAQ that explains the rationale
for the offering, the intended use of proceeds, the commitment by our largest shareholder, an entity ("AIHT") owned
by Mr. Marius Nacht, to subscribe for its full allotment in the offering (approximately US$4 million) and an option granted to
AIHT to permit it or its recently formed affiliate, aMoon 2 Limited Partnership ("aMoon2"), to buy all unsubscribed
units. There is also an option for AIHT/aMoon2 to buy additional units, on the same terms as the rights offering, for US$10 million.
is a life science investment fund organized by Mr. Marius Nacht that recently closed on approximately US$660 million, including
amounts contributed by Mr. Nacht and additional amounts raised through the efforts of the investment banks Goldman Sachs and Credit
Suisse. aMoon2 is one of the largest life science funds in Israel and we believe that its participation in the proposed financing
would enhance BiondVax's shareholder base and could provide additional advantages through the network of aMoon2's
investors and investment bankers.
A condition to the participation by AIHT/aMoon2
in the rights offering and the related financing is imposed by the Israeli Companies Law. Briefly stated, this law limits the
ability of shareholders (including affiliates) to own in excess of 25% or 45% of the outstanding voting rights of an Israeli company
without first obtaining the approval of its shareholders at a general meeting. AIHT would exceed the 25% limit simply by purchasing
its full allotment in the rights offering if other shareholders do not participate, and its percentage ownership, together with
its affiliate aMoon2, could exceed 45% if other shareholders do not participate in the rights offering and AIHT/aMoon2 purchases
the remaining approximately US$16 million of unsubscribed units. The more shareholders other than AIHT participate in the rights
offering, the lower the percentage ownership AIHT/aMoon2 could own even if they exercise the entire US$10 million related financing.
The board believes the rights offering and
the related financing is the best opportunity to provide the Company with sufficient money in a timely fashion to conduct its
business and the 2nd cohort of its pivotal, clinical efficacy, phase 3 trial in an optimal manner, and I respectfully request
your support of the resolution permitting AIHT/aMoon2 to increase their share in BiondVax to over 25% or over 45% as a consequence
of the rights offering and related financing.
To that end, I would appreciate your support by voting "for" Resolutions 1.a and 1.b on your voter card for the upcoming
I thank you for your trust and support of our mission to bring a much needed universal flu vaccine to the world.
BiondVax Pharmaceuticals Ltd.
Following the successful launch of
its pivotal, clinical efficacy phase 3 universal flu vaccine trial in 2018, BiondVax has been exploring additional financing opportunities
and has determined to proceed with a US$20 million shareholders' rights offering open to all existing shareholders pro rata
("rights offering"), as well as up to an additional US$10 million in a related financing available under limited circumstances
("related financing").
What will the money raised in the rights
offering and the related financing be used for?
The money will be used to fund operations
through the end of 2020, including completion of the ongoing pivotal, clinical efficacy, Phase 3 trial. Due to apparently mild
flu season this year in Europe and specifically in the countries where the trial is being conducted, in order to enhance the statistical
power of the trial, the money will also support an anticipated increase in the number of participants in the trial's second
cohort by approximately 2,000 over the 6,000 participants originally contemplated.
What is the "related financing"?
In order to increase the likelihood that a
minimum amount of money is raised through the rights offering, BiondVax asked its largest shareholder, Angels Investments in High
Tech Ltd. ("AIHT"), a company wholly owned by Mr. Marius Nacht that owns approximately 20% of the outstanding shares
of BiondVax, to commit to subscribe for its entire allotment available to it in the rights offering, a total of approximately
US$4 million. In exchange for this commitment, AIHT requested that it or its recently formed affiliate, aMoon2 Fund Limited Partnership
("aMoon2"), be given the option to purchase, under the same terms of the rights offering, any units offered in the
rights offering not purchased by other shareholders, but not less than US$10 million. Providing AIHT/aMoon2 this option is designed
to increase the likelihood that the entire rights offering of US$20 million will be subscribed. If the amount of the unsubscribed
units is US$10 million or greater, then AIHT/aMoon 2 will be able to exercise its option out of this unsubscribed amount. In such
case the related financing will expire on the closing of the rights offering. If the amount of the unsubscribed units is less
than US$10 million, the related financing would permit an additional purchase of units so that the total amount purchased by AIHT/aMoon2,
over and above the AIHT US$4 million allotment, may equal US$10 million.
aMoon2 is a life sciences fund in which Mr.
Marius Nacht is the anchor investor and that recently closed on US$660 million, including funds raised through the efforts of
the investment banks Credit Suisse and Goldman Sachs. aMoon2 is one of the largest life sciences funds in Israel and BiondVax
believes that its participation in the proposed financing would enhance the Company's shareholder base and could provide
additional advantages through the network of aMoon2's investors and through its management team. According to their policy,
aMoon2 is unable to invest less than US$10 million in any given transaction.
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Examples of the "related financing":
Notwithstanding the full exercise of the related
financing by AIHT/aMoon2 contemplated by Example 3, the resulting percentage ownership by AIHT/aMoon2 would be the lowest of all
the three examples because of the participation of other shareholders.
Why does the board recommend approving
the terms of the rights offering and related financing with the participation of AIHT/aMoon2 as outlined?
The board believes that the financing it has
negotiated with AIHT/aMoon2 is a good transaction for the Company. While AIHT is only committed to purchase the AIHT pro-rata
allotment, the structure described above is designed to encourage broader participation by AIHT/aMoon2 in the rights offering
with the target amount of US$20 million from existing shareholders while permitting aMoon2 to reach its minimum investment threshold
of US$10 million should it choose to participate. As stated above, the participation by aMoon2 could provide advantages, in addition
to its investment, through its network of investors and through its management team.
A condition to the participation by AIHT/aMoon2
in the rights offering and the related financing is imposed by the Israeli Companies Law. Briefly stated, this law limits the
ability of shareholders (including affiliates) to own in excess of 25% or 45% of the outstanding voting rights of an Israeli company
without first obtaining the approval of its shareholders at a general meeting. AIHT would exceed the 25% limit simply by purchasing
its full allotment in the rights offering if other shareholders do not participate, and its percentage ownership, together with
its affiliate aMoon2, could exceed 45% if other shareholders do not participate in the rights offering and AIHT/aMoon2 purchases
the remaining approximately US$16 million of unsubscribed units. The more shareholders other than AIHT participate in the rights
offering, the lower the percentage ownership AIHT/aMoon2 could own even if they exercise the entire US$10 million related financing.
The board believes the rights offering and
the related financing is the best opportunity to provide the Company with sufficient money in a timely fashion to conduct its
business and the 2nd cohort of its pivotal, clinical efficacy, phase 3 trial in an optimal manner, and recommends approval
of the terms permitting AIHT/aMoon2 to own in excess of 25% and 45% of the voting rights as a consequence of their participation.
How was the pricing of the rights offering
and the related financing decided?
The price per each ADS of US$5.69 is the volume
based weighted average price for the sixty calendar days to 8th April 2019 inclusive, and the median of the volume
based weighted average prices for the thirty, sixty and ninety calendar days respectively to 8th April 2019 inclusive.
This was judged by the board to be the fairest method of estimating the true value.
If you elected to receive information electronically,
you should have received an email notification about the shareholder meeting, and you should contact your bank or broker and notify
your voting instructions. If you did not elect to receive information electronically, you should have received (or will shortly
receive) a voting card by post which you should return completed in the pre-paid envelope provided with the card. If you do not
receive a voting card by post you should contact your bank or broker. Your votes must be received no later than 12:00
p.m. EST on 23 May, 2019. The board recommends that you vote "For" all of the proposals.