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This Announcement contains inside information for the purposes of the market abuse regulation (EU No. 596/2014) as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018 ("UK MAR").  In addition, market soundings (as defined in UK MAR) were taken in respect of certain of the matters contained in this Announcement, with the result that certain persons became aware of such inside information, as permitted by UK MAR.  Upon the publication of this Announcement, this inside information is now considered to be in the public domain and such persons shall therefore cease to be in possession of inside information. 

Motif Bio plc

("Motif" or the "Company")

Update on Proposed Reverse Takeover

Publication of Admission Document

Notice of General Meeting

Proposed Acquisition of BiVictriX Therapeutics Limited

Proposed Fundraising, Share Consolidation and Change of Name

Proposed Board Changes

Motif Bio plc (AIM: MTFB), which has been reclassified as an AIM Rule 15 cash shell, is pleased to announce that further to the announcements of 5 January, 27 January and 29 March 2021, the Company has now executed a sale and purchase agreement ("SPA") to conditionally acquire the entire issued and to be issued share capital of BiVictriX Therapeutics Limited ("BiVictriX" or "BVX"), a UK-based Antibody-Drug Conjugate ("ADC") discovery and development company which is focused on leveraging clinical experience to develop a class of highly selective, next generation cancer therapeutics which exhibit superior potency, whilst reducing harmful side-effects (the "Proposed Transaction" or "Acquisition").

The Proposed Transaction constitutes a reverse takeover pursuant to Rule 14 of the AIM Rules for Companies (the "AIM Rules") and, accordingly, is conditional on, among other things, the approval of Shareholders at a General Meeting to be held at 12 p.m. (UK time) on 14 June 2021 at the offices of Reed Smith LLP, 599 Lexington Avenue, New York, NY 10022, United States.

Accordingly, an Admission Document dated 26 May 2021 has now been published, incorporating a full Notice of General Meeting, in relation to, among other things, the Acquisition and an associated oversubscribed conditional placing and subscription for New Ordinary Shares (as defined below) to raise, in aggregate, gross proceeds of £10.1 million.

SP Angel Corporate Finance LLP is acting as Nominated Adviser and Broker to the Company.

Pursuant to Rule 15 of the AIM Rules, the Company's Ordinary Shares will remain suspended from trading on AIM until completion of the Proposed Transaction, which is expected to be at or around 8 a.m. on 15 June 2021 ("Admission").

Highlights:

·    Proposed acquisition of the entire issued and to be issued share capital of BiVictriX for an aggregate consideration of £5,500,608.20 to be satisfied by the issue of new ordinary shares and cash;

·    Proposed placing and subscription to raise, in aggregate, £10.1 million before expenses, through the issue of 50,500,000 new ordinary shares, at a price of 20 pence (the "Placing Price") each comprising 40,042,280 placing shares "(Placing Shares") and 10,457,720 subscription shares ("Subscription Shares");

·    Proposed warrants to be issued to existing Motif shareholders on the basis of one warrant per two Ordinary Shares held with an exercise price of 30 pence and valid for 180 days following Admission (the "Admission Warrants", see below);

·    Proposed share consolidation at a ratio of 1:220 (the "Share Consolidation");

·    Proposed change of name to BiVictriX Therapeutics plc to reflect the transformational nature of the Proposed Transaction; and

·    Proposed board changes, conditional on Admission, with the resignation of each of Bruce Williams, Graham Lumsden and Christopher Wardhaugh and the appointments of Iain Ross as Non-Executive Chairman, Tiffany Thorn as Chief Executive Officer, Professor Robert Hawkins and Dr. Ole Petter Veiby as Independent Non-Executive Directors. It is proposed that Jonathan Gold will remain on the board as a Non-Executive Director.

Background to BiVictriX 

BiVictriX is a rapidly emerging biotechnology company applying a novel approach, derived from direct clinical experience, to develop safer, more effective anti-cancer therapies. BiVictriX's pioneering 'precision' approach to cancer treatment has the potential to deliver a broad pipeline of proprietary, first-in-class Bi-Cygni^® therapeutics to enable potentially higher dosing and more aggressive tumour eradication in patients, without causing harmful side-effects. Through access to state-of-the-art techniques, BiVictriX has identified a diverse library of cancer-specific antigen fingerprints that can be used for the treatment of a wide range of cancer indications. BiVictriX's lead candidate, BVX001, is designed to deliver a game-changing therapeutic approach to patients with Acute Myeloid Leukemia ("AML").

The Directors believe that the Acquisition and subsequent Admission will position Motif and BiVictriX, (the "Enlarged Group") for the next stage of development by providing the Enlarged Group with access to wider pools of capital in order to continue the development of safer, more effective cancer therapies and to help expand its wider pipeline of development programmes.

Further information on the Acquisition and the Resolutions can be found in the Company's Admission Document (and the Notice of General Meeting set out therein), which is available on the Company's website at www.motifbio.com and has been posted to Shareholders.

Defined terms used in this Announcement carry the same meanings as those ascribed to them in the Company's Admission Document, unless the context requires otherwise. 

Bruce Williams, Motif's Chairman, commented: "Overcoming countless setbacks and challenges along the way, I am thrilled that we have put together a transaction that delivers value to our existing Shareholders, and has the potential to offer patients a safer, more effective way to treat their cancers. I am grateful to the Motif team, especially Jon Gold, for their tireless efforts over the last 18 months in meeting, reviewing and conducting diligence on many potential candidates, culminating in the selection of BiVictriX. The Proposed Transaction represents an exciting opportunity as following Admission we believe the Enlarged Group's work programmes have the potential to lead to breakthroughs for cancer patients."

For further information please contact:

Forward-Looking Statements

This announcement may contain forward-looking statements. Words such as "expects", "anticipates", "may", "should", "would", "could", "will", "intends", "plans", "believes", "targets", "seeks", "estimates", "aims", "projects", "pipeline" and variations of such words and similar expressions are intended to identify such forward-looking statements and expectations. These statements are not guarantees of future performance or the ability to identify and consummate transactions and involve certain risks, uncertainties, outcomes of negotiations and due diligence and assumptions that are difficult to predict, qualify or quantify. Therefore, actual outcomes and results may differ materially from what is expressed in such forward-looking statements or expectations. Among the factors that could cause actual results to differ materially are: the general economic climate, competition, interest rate levels, loss of key personnel, the result of legal and commercial due diligence and changes in the legal or regulatory environment.

Notice of General Meeting

In accordance with Rule 14 of the AIM Rules, completion of the Proposed Transaction is subject to approval by Shareholders to be sought at a forthcoming General Meeting of the Company to be held at 12 p.m. (UK time) on 14 June 2021 at the offices of Reed Smith LLP, 599 Lexington Avenue, New York, NY 10022, United States, formal notice of which is incorporated in the Company's Admission Document (the "Notice of General Meeting").

In light of the current restrictions imposed as a result of the COVID-19 pandemic, the General Meeting will be held with the minimum number of members legally required to be present (which will be facilitated by the Company's management). For the safety of all Shareholders, Shareholders are discouraged from attending the General Meeting in person without invitation. The Company therefore strongly encourages all Shareholders to submit their Form of Proxy appointing the Chairman as their proxy. Only the formal business of the Resolutions will be carried out at the General Meeting.

The Company will provide a facility for Shareholders to join the General Meeting either online or telephonically and there will be an opportunity for Shareholders to ask questions. In order to facilitate the process, and so that questions can be fully answered at the end of the meeting, the Board would request questions to be submitted in advance, before 5 p.m. on 9 June 2021.

The Resolutions seek, conditional on Admission, to approve, among other things, the Acquisition, the appointment of the Proposed Directors, the change of the Company's name to BiVictriX Therapeutics plc, the adoption of the amended articles of association, the Share Consolidation and the Fundraise.

The Directors unanimously recommend that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting, as they intend to do so in respect of their own beneficial shareholdings amounting to, in aggregate 253,958 Existing Ordinary Shares representing 0.039 per cent. of the Existing Share Capital.

In the event that the Resolutions are not approved by the Shareholders, the Acquisition and the other Proposals will not occur. It is likely that the Company's AIM listing will be cancelled with immediate effect resulting in Shareholders owning shares in an unlisted public company. In such circumstances,  given accrued transaction costs, Shareholders would not be expected to receive any further value for their Ordinary Shares.

SPA

The key terms of the Acquisition are as follows:

·    the holders of the entire issued share capital of BiVictriX (the "Sellers") will sell the entire issued share capital of BiVictriX to the Company;

·    the Company will pay an aggregate purchase price of £4,998,202.81 to be satisfied by the issue of an aggregate of 24,990,999 Consideration Shares to the Sellers (other than the Cash Sellers) for the issued and to be issued BiVictriX shares held by them;

·    the Company will pay an aggregate of £502,330.42 to the Cash Sellers for their BiVictriX shares, with the cash consideration being reinvested into the Company in exchange for the issue of an aggregate of 2,511,646 Consideration Shares, pursuant to an irrevocable undertaking executed by each Cash Seller;

·    the purchase price is to be satisfied by the issue to the Sellers (upon completion of the irrevocable undertaking signed by each Cash Seller) of an aggregate of 27,502,645 Consideration Shares at the Placing Price;

·    certain limited warranties have been provided by each party in the agreement; and

·    each party has the right to terminate the agreement, among other times, in the case of a material breach of warranty or a material adverse change in relation to the other business.

In addition, conditional on Admission, the Company has agreed to exchange the existing options over shares in BVX which are held by Tiffany Thorn for new options in the Company. A total of 1,942,459 options over New Ordinary Shares will be granted, with 1,591,794 of the options being exercisable at the Placing Price and 350,665 of the options having an exercise price of £0.1223. The options to be granted to Tiffany Thorn will be governed by the same rules as those which will apply to the New Scheme.

The Acquisition Agreement is conditional upon, among other things, the passing of the Resolutions at the General Meeting and Admission. The conditions to the Acquisition Agreement must be satisfied or waived on or before 15 June 2021 or the agreement will terminate.

Those Sellers who are not Locked-In Persons will not be subject to any restriction on the sale of the New Ordinary Shares held by them at Admission.

Board changes

Conditional on Admission, each of Bruce Williams, Graham Lumsden and Christopher Wardhaugh have agreed that they will resign their position as a non-executive director of the Company. Under the terms of the termination agreements, each of Messrs. Williams, Lumsden and Wardhaugh have agreed to waive all compensation and other benefits due to them in accordance with the terms of the letters of appointment (a total of over US$200,000), in exchange for the issue to them of an aggregate of 267,373 warrants at the Placing Price (assuming completion of the Share Consolidation).

On Admission it is intended that Iain Ross will be appointed to the board as Non-Executive Chairman, Tiffany Thorn as Chief Executive Officer and Professor Robert Hawkins and Dr. Ole Petter Veiby as Independent Non-Executive Directors (together, the "Proposed Directors"). Jonathan Gold will remain on the board as a Non-Executive Director.

Proposed Fundraising

In connection with the Acquisition, the Company has conditionally raised, in aggregate, approximately £10.1 million (before expenses) through the issue of, in aggregate, 50,500,000 New Ordinary Shares at a price of 20 pence per New Ordinary Share (the "Fundraise Shares"), comprising 40,042,280 Placing Shares and 10,457,720 Subscription Shares.

Jonathan Gold and certain Proposed Directors have conditionally subscribed for an aggregate of 450,000 Subscription Shares at the Placing Price, pursuant to the terms of the Subscription, as per the table below:

Completion of the Fundraising is conditional on approval by Shareholders of all Resolutions set out in the Notice of General Meeting, the Placing Agreement and Subscription Agreements not being terminated in accordance with their terms, receipt of the subscription monies prior to the General Meeting and admission of the Enlarged Share Capital to trading on AIM.

The net proceeds of the Fundraising, being approximately £9 million, will be used to:

·    accelerate the lead optimisation of BVX001 to reach key preclinical milestones on efficacy and safety;

·    expand BiVictriX's early-stage pipeline to include two additional candidates with preclinical proof of concept;

·    grow BiVictriX's intellectual property portfolio to add further protection around the lead programme and additional pipeline; and

·    expand BiVictriX's internal capabilities to include providing potential avenues for platform intellectual property generation and defensibility of BiVictriX's approach.

Significant shareholders

On Admission, the Company's significant shareholders holding 3 per cent. or more of the Enlarged Share Capital, are expected to comprise:

*The interests reflect the effect of the Share Consolidation assuming this is approved at the Company's General Meeting (further information provided below). 

Lock-In arrangements

Certain shareholders have agreed that for a period of time following Admission they will not dispose of New Ordinary Shares held by them at the time of Admission.

None of the Rule 7 Locked-in Persons, the Non-Rule 7 Locked-in Persons nor the Future Fund will dispose of New Ordinary Shares held by them for a period of 12 months from the date of Admission. For the period of 12 months following the anniversary of the date of Admission, they will only dispose of New Ordinary Shares through the Company's broker.

For a period of 6 months from the date of Admission, the Soft Locked-in Persons will not dispose of New Ordinary Shares held by them. For the 6 months following the 6 month anniversary of the date of Admission, each Soft Locked-in Person will only dispose of New Ordinary Shares through the Company's broker.

Shareholders who are not Locked-In Persons will not be subject to any restriction on the sale of the New Ordinary Shares held by them at Admission.  

Proposed Share Consolidation

The Company's current issued share capital consists of 654,991,023 Existing Ordinary Shares. The Directors believe that it is in the best interests of the Company for there to be a 1:220 share consolidation to reduce the number of Ordinary Shares in issue and increase the share price with a view to decreasing the spread between the bid and offer prices. Under the Share Consolidation, holders of Existing Ordinary Shares will receive: 1 New Ordinary Share for every 220 Existing Ordinary Shares and so in proportion to the number of Existing Ordinary Shares held on the Record Date.

Following the Share Consolidation, Shareholders will still hold the same proportion of the Company's ordinary share capital as before the Share Consolidation and the New Ordinary Shares will carry equivalent rights under the Articles to the Existing Ordinary Shares. Following the Share Consolidation and assuming the maximum number of New Ordinary Shares are issued pursuant to the Proposals, the Company's issued ordinary share capital will comprise 80,979,876 New Ordinary Shares as at Admission.

The Share Consolidation will give rise to fractional entitlements to a New Ordinary Share where any holding is not precisely divisible by 220. No certificates regarding fractional entitlements will be issued. Instead, in accordance with the authority in the Articles, any New Ordinary Shares in respect of which there are fractional entitlements will be aggregated and sold in the market for the best price reasonably obtainable on behalf of those Shareholders entitled to the fractions and, where the amount of the proceeds for a Shareholder is £100 or more, the proceeds of sale will be returned to such Shareholders in proportion to their respective fractional entitlement(s). Proceeds of less than £100 per shareholder will be retained by the Company.

Change of Name

The Board notes that, assuming the Resolutions are approved by Shareholders, the Company will commence trading on its re-admission to AIM under the new name of BiVictriX Therapeutics plc.

Share Options

At Admission, and subject to completion of the Share Consolidation, the Company will have 3,429 share options which have been granted and remain outstanding pursuant to the Existing Scheme. In addition, following Admission and the proposed grant of certain share options to Iain Ross and Tiffany Thorn, the Company will have an available outstanding option pool of 10,516,160 share options under the New Scheme.

Warrants

At Admission, and subject to completion of the Share Consolidation, the Company will have 6,461,151 warrants over New Ordinary Shares that have been granted and remain outstanding.

In particular:

·    Admission Warrants over 1,488,615 New Ordinary Shares are to be issued to the current Shareholders. The Admission Warrants are being granted on the basis of one Admission Warrant granted per two Ordinary Shares held immediately prior to completion of the Acquisition.

·    2021 Warrants over 2,396,269 New Ordinary Shares at the Placing Price are to be issued to Existing Directors and an existing consultant (of which 2,103,200 of these 2021 Warrants, being equal to 2 per cent. of the Enlarged Share Capital, will be granted to Jonathan Gold) in exchange for forgiveness of all accrued bonuses and other payments that would be due (a total of over an aggregate of more than US$500,000). 1,472,240 of the warrants to be granted to Jon Gold will be capable of exercise immediately upon grant with the other 630,960 of the warrants vesting at 6-monthly intervals over 3 years.

Admission, Settlement and Dealings

Application will be made to the London Stock Exchange for the Enlarged Share Capital to be admitted to trading on AIM. It is expected that Admission will become effective and dealings in the Enlarged Share Capital will commence on AIM at 8.00 a.m. on 15 June 2021.  Trading in the Company's Existing Ordinary Shares will remain suspended until such time.

The New Ordinary Shares will be in registered form and will be capable of being held in either certificated or uncertificated form (i.e. in CREST). Accordingly, following Admission, settlement of transactions in the New Ordinary Shares may take place within the CREST system if a Shareholder so wishes. In respect of Shareholders who will receive New Ordinary Shares in uncertificated form, New Ordinary Shares will be credited to their CREST stock accounts on or around 16 June 2021. Shareholders who wish to receive and retain share certificates are able to do so and share certificates representing the New Ordinary Shares to be issued pursuant to the Fundraise are expected to be despatched by post to such Shareholders by 25 June 2021.

Following Admission, the ISIN of the New Ordinary Shares will be GB00BKVCVD41, the SEDOL will be BKVCVD4 and the LEI will be 54930080DN00QTIUUU84. The TIDM will be BVX.

Related Party Transactions

Jonathan Gold's participation in the Fundraise constitutes a related party transaction in accordance with AIM Rule 13. Graham Lumsden, Bruce Williams and Chris Wardhaugh, who are not subscribing for Fundraise Shares and are therefore considered to be independent Directors for these purposes, having consulted with the Company's nominated adviser, consider the terms of Jonathan Gold's participation in the Fundraise to be fair and reasonable insofar as the Shareholders are concerned.

The proposed issue of warrants under the 2021 Warrant Instrument to the Existing Directors also constitutes a related party transaction in accordance with AIM Rule 13. Dr. Ole Petter Veiby and Professor Robert Hawkins, as the proposed directors of the Enlarged Group who will not be receiving warrants and are therefore considered to be independent Directors for these purposes, having consulted with the Company's nominated adviser, consider the terms of the issue of warrants to the Existing Directors under the 2021 Warrant Instrument, conditional on Admission to be fair and reasonable insofar as the Shareholders are concerned.

Expected Timetable of Principal Events

Acquisition and Fundraising Statistics