Date: 2016-01-20
Type of information: Company acquisition
Acquired company: Kuros Biosurgery (Switzerland)
Acquiring company: Cytos Biotechnology (Switzerland)
Amount:
Terms: * On January 20, 2016, Kuros Biosciences announced the closing of the acquisition of Kuros Biosurgery Holding Ltd. and the change of name of the combined company to Kuros Biosciences. Starting 20 January 2016 all 508'432'244 Kuros Biosciences shares are listed and freely tradable under the ticker symbol KURN on the SIX Swiss Exchange under the International Reporting Standard and include all former 108’015’276 Cytos Biotechnology AG shares, which remain listed and freely tradable under the unchanged ISIN number (CH0011025217). * On December 3, 2015, Cytos Biotechnology and Kuros Biosurgery announced their intention to combine their businesses by way of an exchange of Kuros shares for new Cytos shares, subject to shareholder approval and other customary conditions. Cytos is listed on the main segment of the Swiss stock exchange while Kuros is a privately-held company based in Zurich. The combined entity will operate under the name Kuros Biosciences. As a result of the combination, the shareholders of Cytos will have ownership in a leading biosciences company in the field of tissue repair and regeneration.
* On December 15, 2015, Cytos Biotechnology announced that an Extraordinary Shareholders’ Meeting will take place on Wednesday, January 6, 2016 at 10.30 a.m. at Cytos’ offices in Schlieren/Zurich (Switzerland). At this meeting, shareholders will be invited to vote on resolutions related to the transaction with Kuros Biosurgery Holding AG (acquisition of this company by means of share exchange). Resolutions include an increase of the share capital, amendment of the conditional and authorized capital and elections to the Board of Directors.
The combined company will be led by the existing Kuros executive management team with Kuros’CEO, Didier Cowling, taking the role of new group CEO, Alistair Irvine as Chief Business Officer and Jason Schense as Chief Technology Officer. All current members of the Cytos management staff will cease their executive roles when the combination is completed. At a shareholders' meeting of Cytos scheduled to take place in January 2016, Cytos’ current CEO and Chairman, Christian Itin, will remain as Chairman of the Board of Kuros Biosciences and Harry Welten, Cytos CFO, will be proposed for election as a non-executive Board member. Following the combination, and subject to their election, the Board of Kuros Biosciences will consist of Christian Itin (Chairman), Dominik Ellenrieder (Vice Chairman), Didier Cowling, Harry Welten, Arnd Kaltofen, Jörg Neermann, Gerhard Ries and Vincent Ossipow.
Under the terms of the proposed combination, each Kuros share outstanding will convert into approximately 27 newly issued Cytos shares. In addition, existing options and conversion rights for Kuros shares are expected to be rolled over into comparable rights for Cytos shares. Following closing, the current shareholders of Cytos will own approximately one-fifth and Kuros’ shareholders will hold
approximately four-fifths of the outstanding shares of the combined company. In addition, existing options and warrants for Cytos shares and roll-over options and conversion rights replacing rights for Kuros shares are expected to make up a total of approximately 15.5% of the outstanding share capital of the combined company post-closing. Options and warrants of around 8.6% of the outstanding share capital post-closing are expected to be in the money at closing.
The companies have undertaken reciprocal due diligence providing the basis for recommending the intended transaction to their respective shareholders. Closing of the transaction is expected within two months and is contingent upon certain conditions, amongst others a vote of approval by Cytos’ current shareholders and the listing of the new Cytos shares.
At the extraordinary shareholders' meeting of Cytos, planned for January 2016, the Cytos Board proposes to its shareholders to issue around 392 million new shares to the Kuros shareholders. Furthermore the roll-over of options and warrants granted by Kuros will require an increase of the conditional capital of Cytos by around 50 million shares and of the authorized share capital by around
9 million shares. The Board also proposes at this extraordinary shareholders' meeting the election of new members of the Board and certain other resolutions, such as the change of name of Cytos to Kuros Biosciences AG.
Details: Kuros Biosurgery Holding AG is a privately held company focused on the development of innovative products for tissue repair and regeneration. The company is a spin-off of the Swiss Federal Institute of Technology and based in Zürich, Switzerland. Kuros is currently backed by a group of venture investors, including Venture Incubator, LifeCare Partners, LSP (Life Sciences Partners) and Omega Fund. The underlying technologies were developed by Prof. Jeffrey Hubbell and his team during his tenure at The California Institute of Technology, Pasadena, California, USA, and at the Swiss Federal Institute of Technology in Zürich. Kuros’ most advanced product candidate, KUR-023, is a novel biomaterial designed to seal the dura (membrane covering the brain and spinal cord) after brain and spinal surgery that has successfully completed a European clinical study and is being prepared to be CE Marked in preparation for commercial launch. A European clinical study has been successfully completed. The company is aiming at obtaining a CE mark for commercialization in Europe in 2017. Kuros is planning a secondclinical study to support approval for the product in the US. KUR-111 and KUR-113, Kuros’ most advanced orthobiologic products, have been designed to generate bone tissue to heal fractures and to stabilize the spine. KUR-111 has been designed to be used when a bone graft is required and KUR-113 has been designed to be used when a graft is not required. KUR-113 can also be used in spinal fusion, a procedure used to treat indications such as degenerative disc disease. KUR-111 and KUR-113 have been tested in large, controlled Phase 2b clinical trials and the products showed efficacy by meeting the studies’ primary endpoints. KUR- 111 and KUR-113 share the same biologically active agents and have been tested in clinical trials involving over 380 patients to date exhibiting an excellent safety profile. Kuros announced in November 2015 the completion of a financing of over CHF20 million that the company expects to provide adequate financing to bring KUR-023 to market in both Europe and the US. Moreover, this financing will allow the company to prepare for a Phase 3 study with its lead product candidate for bone healing, KUR-111. In addition to this attractive clinical pipeline, the combined company will have several product candidates in pre-clinical development. Kuros Biosciences will continue all partnerships Cytos has entered into, in particular the two collaborations for CYT003 and the VLP technology with Checkmate Pharmaceuticals in Cambridge, MA, USA, for the treatment of cancer and with Arbutus Biopharma in Burnaby, British Columbia, Canada (formerly Oncore Pharmaceuticals), for the treatment of hepatitis B infections. With those two collaborations, the CYT003 program and VLP technology will move forward with investment from the collaboration partners and, if successful, Kuros Biosciences will be eligible for significant development milestone payments and royalties on future sales.
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