Raisebook

US Based Biotech Already Generating Revenues from Cell Therapy Products
Koligo Therapeutics Limited
Koligo Therapeutics Limited
ASX:KOL
  • Koligo has the potential to become a successful regenerative medicine platform for the development and commercialisation of scalable bioengineered tissue transplant products.
  • Koligo has commenced sales of its first cell therapy product Kyslecel™ for the treatment of chronic or acute recurrent pancreatitis, with revenues of approximately $1,600,000 generated from these sales since November 2017.
  • Koligo believes there is a serious unmet medical need for Kyslecel™, as the current treatments for chronic or acute recurrent pancreatitis seldom provide meaningful long-term relief to patients.
  • No other business or enterprise is known by Koligo to be widely selling a product similar to Kyslecel™ as a commercial for-profit endeavour.
  • Koligo has exclusively licensed know-how, patents and other intellectual property associated with Kyslecel™ and its 3D-V technology platform, which potentially provides Koligo with a defensible position in relation to third party infringement.
  • The Company is backed by a U.S. institutional investor.
Raise Amount
$6,000,000
Offer Price
$0.2000
Closes
Apr 5, 2019

Koligo Therapeutics Limited is a U.S. biotechnology company focused on the development and commercialisation of a range of cell therapy, three-dimensional (3D) bioprinted tissue and other regenerative medicine products for serious unmet medical needs.

Koligo has successfully commercialised and has commenced selling its cell therapy transplant product, Kyslecel™, in the United States.

Kyslecel™ is used in the treatment of patients suffering from chronic or acute recurrent pancreatitis, a debilitating and painful condition with few effective treatment options.

Koligo has sold Kyslecel™ for use in the treatment of 22 patients who undertook TP procedures (“total pancreatectomy” - complete removal of the pancreas) in the U.S, with revenues of approximately $1,600,000 generated from these sales since November 2017.

Koligo is currently developing Kyslecel™ v2.0, an improved formulation that is intended to extend its shelf life and thus expand the markets it serves.

Koligo believes the market for Kyslecel™ in the U.S. is significant. An estimated 16,000 to 39,000 people in the U.S. are diagnosed with chronic or acute recurrent pancreatitis each year.

Koligo believes the worldwide market for Kyslecel™ v2.0 is larger than the market for Kyslecel™, given that Kyslecel™ v2.0 is expected to be available to more patient groups and is expected to be shipped over longer distances, including to international markets (subject to meeting foreign regulatory requirements).

Koligo has opportunities to significantly broaden its U.S. addressable market and that it is well positioned for growth in international markets, subject to the receipt of all relevant regulatory approvals.

Koligo also intends to develop a pipeline of regenerative medicine products that utilise 3D bioprinting, adipose-derived cells (regenerative cells derived from fat tissue) and other tissue processing techniques (referred to as Koligo’s 3D-V technology platform) for novel cell therapy and engineered tissue products.

In the short term, the products that Koligo intends to develop using its 3D-V technology platform are engineered tissue products containing pancreatic islets for the treatment of pancreatitis, type 1 diabetes, and other pancreatic diseases.

Longer term, the Company aims to be a leader in the development of novel cell therapy and engineered tissue products for liver failure, neurological diseases, metabolic disorders, and genetic disorders, using Koligo’s 3D-V technology platform, subject to its successful development.

Koligo’s proprietary cell therapy, 3D bioprinting, and tissue engineering technologies are protected by patents exclusively licensed by Koligo, a patent application filed by Koligo and non-patented proprietary databases, processes, and know-how owned by Koligo.

Koligo’s business model is to grow sales of its first commercially available cell therapy product Kyslecel™, while, at the same time, developing and commercialising a range of 3D-bioprinted cell therapy and regenerative medicine products.

The Offer

Koligo Therapeutics Limited (ACN 627 117 677 ) is offering 30,000,000 Shares at an issue price of $0.20 per Share to raise $6,000,000 (Public Offer).

The Joint Lead Managers to the Offer are APP Securities and Novus Capital.

Oversubscriptions of up to a further 5,000,000 Shares at an issue price of $0.20 per Share to raise up to a further $1,000,000 may be accepted under the Public Offer, and for the offer of up to 5,500,000 Options to the Joint Lead Managers.

The offer of the securities are made in, or accompanied by, a copy of the disclosure document which can be obtained by clicking on the "ACCESS DISCLOSURE DOCUMENT" button on this page.

Anyone who wants to acquire the securities will need to complete the application form that will be in or will accompany the Disclosure Document. Before making an investment decision, potential investors should read the Disclosure Documents entirely, and seek professional financial advice.

Investors should be aware that no assurance can be given that the Company will achieve commercial viability through the sale of Kyslecel™ with total pancreatectomy, the development of the products in Koligo’s pipeline, or otherwise. There are also other risks associated with this investment - for a detailed list of Key Risks please refer to Sections 3.7 and 7 of the Disclosure Document.

Capital Structure

Shares Minimum Subscription Full Oversubscription
Shares currently on issue 1 1
Shares to be issued pursuant to the Exchange Agreement 75,000,000 75,000,000
Shares to be issued pursuant to the Public Offer 30,000,000 35,000,000
Total Shares on completion of the Offers 105,000,001 110,000,001
Options Minimum Subscription Full Oversubscription
Options currently on issue nil nil
Options to be issued to directors and management 11,000,000 11,000,000
Options to be issued to the joint Lead Managers (or their nominees) 5,250,000 5,500,000
Options to be issued to medical advisory consultant of Koligo 71,023 71,023
Total Options on completion of the Offers 16,321,023 16,571,023
Performance Shares Minimum Subscription Full Oversubscription
Performance Shares currently on issue nil nil
Performance Shares to be issued under the Public Offer nil nil
Performance Shares to be issued pursuant to the Exchange Agreement 25,000,000 25,000,000
Total Performance Shares on completion of the Offers 25,000,000 25,000,000

Indicative Timetable

Closing Date of the Offers 5 April 2019
Despatch of holding statements 12 April 2019
Expected date for quotation on ASX 19 April 2019

The above dates are indicative only and may change without notice. The Company reserves the right to extend the Closing Date or close the Offers early without notice.

Use of Funds

Funds available Minimum Subscription ($) ($6,000,000) Percentage of Funds (%)
Pre-Public Offer cash balance $10,253 0.16%
Drawdown from Loan Facilities $275,034 4.38%
Funds raised from the Public Offer $6,000,000 95.46%
Total $6,285,287 100.0%
Allocation of funds
Expansion of sales staff, and marketing and advertising expenditure $1,192,500 18.97%
Expansion of manufacturing facilities and other capital expenditures $800,000 12.73%
Research and development $1,050,000 16.71%
Expansion of operational staff $144,000 2.29%
Executive, head office and overhead $998,800 15.89%
Administration and overheads $482,000 7.67%
Expenses of the Offers $1,194,536 19.01%
Repayment of Loans $371,023 5.90%
Working Capital $52,428 0.83%
Total $6,285,287 100%

Kyslecel™ and Kyslecel™ v2.0

Kyslecel™ is Koligo’s first cell therapy product which it has recently commenced selling.

Kyslecel™ is used in the treatment of patients suffering from chronic or acute recurrent pancreatitis, a debilitating and painful condition with few effective treatment options.

Kyslecel™ is manufactured using a patient’s own diseased pancreas – it contains a patient’s own pancreatic islets (the cells that produce insulin) that are reintroduced into a patient’s body to produce insulin needed to regulate blood sugar levels.

Kyslecel™ is used after a patient has undergone a total pancreatectomy (complete removal of the pancreas) (TP) to relieve the pain and inflammation caused by pancreatitis.

Historically, TP procedures have been performed at a very limited number of hospitals with islet-autotransplantation (IAT) capabilities to treat the side effects caused by TP (namely diabetes).

Yet, at present, Koligo is not aware of any other business or enterprise that sells IAT products as a commercial for-profit endeavour.

In fact, Koligo believes a large proportion of patients suffering from chronic or acute recurrent pancreatitis do not seek treatment using TP with IAT due to, among other things, a lack of access to IAT products.

Since commencement of sales of Kyslecel™ in November 2017 Koligo has generated revenues of $1,600,000.

Prior to founding Koligo, Dr. Balamurugan Appakalai (Koligo’s Chief of Manufacturing) performed over 800 similar human islet isolation procedures at various academic institutions for research and clinical purposes.

Longer term, Koligo intends to leverage its 3D-V technology platform to develop products that treat diseases or disorders using cell or tissue transplant therapies with proven pre-clinical or clinical results, including neurodegenerative diseases (e.g., Parkinson’s, Lou Gehrig's and Huntington’s diseases), Chondral lesions (e.g., knees, hips and other joints), DiGeorge syndrome and Acute liver failure (liver based metabolic disorders).

The Company believes that the development of products for the treatment of these diseases or disorders would present significant growth opportunities for the Company.

Growth Strategies

  • Expanding Koligo’s sales force and investing in the marketing of Kyslecel™;
  • Expanding the network of hospitals who offer Kyslecel™; and
  • Evaluating international opportunities for Kyslecel™ v2.0 through potential licensing and collaboration agreements for specific countries and regions.

Leadership

Members of the Company’s Board and management are experienced in the regenerative medicine industry and in successful ASX small-caps. The calibre, ability and relevant experience of the Board are highlighted by the following:

  • The Executive Director and Chief Executive Officer Matthew Lehman has over 18 years’ executive experience at numerous biotechnology and pharmaceutical companies including NASDAQ listed companies;
  • The Non-Executive Chairman Peter James has over 30 years’ public company experience as Chair, Non-Executive Director and Chief Executive Officer across a range of publicly listed and private companies;
  • The Executive Director and Chief Technology Officer Stuart Williams, PhD is an internationally recognised expert in regenerative medicine and is the Endowed Chair of Cardiovascular Innovation and Director of the Bioficial Organs Program at the University of Louisville.
This deal closed on April 05, 2019