Prana Biotechnology Ltd. plans to issue about 272 million of its new fully paid ordinary shares, representing about 34% of the total ordinary shares, for about A$44.5 million to Boston-based Life Biosciences LLC.
Each new ordinary share will be sold with two warrants. The ordinary shares will be issued at 3.9 Australian cents and the warrants will have an exercise price of 4.5 Australian cents.
Under the terms of the transaction, Life Biosciences will initially invest about A$10.6 million, with the agreement allowing Prana to raise an additional US$2 million from other investors, totaling about A$13.4 million. In addition, about A$31 million will be invested by Life Biosciences and other investors on the exercise of short-term warrants being issued as part of the transaction.
If all of the warrants issued to Life Biosciences are exercised, about 544 million additional ordinary shares would be issued, which would take Life Biosciences' total stake in Prana to about 60%. Completion of the transaction is subject to approval by Prana's shareholders.
"Life Biosciences' investment in Prana is an important endorsement of the significance of our work in addressing neurodegenerative disease. This financing will potentially allow us to accelerate our drug development programs," said Geoffrey Kempler, Prana's chairman and CEO.
As part of the transaction, Life Biosciences can nominate up to three directors to Prana's board as long as it holds at least 20% of the ordinary shares on issue. Life Biosciences plans to nominate David Sinclair and Tristan Edwards as its representatives on Prana's board upon completion of the transaction. The appointment requires approval from Prana's shareholders.
Life Biosciences, which was was co-founded in 2017 by Sinclair and Edwards, is a private U.S.-based biopharmaceutical company that is focused on the development of novel therapies, technologies and drugs to combat the eight pathways of age-related decline.
Sinclair is a tenured professor in the Department of Genetics at Harvard Medical School and co-Director of the Paul F. Glenn Center for the Biology of Aging Research.
Edwards has had a 16-year investment career spanning financial organizations across Australia, London, Hong Kong and Singapore.
Melbourne, Australia-based Prana Biotechnology researches and develops therapeutic drugs to treat Alzheimer's disease, Huntington disease, Parkinson's disease and other neurological disorders.