BIOPHYTIS (EPA:ALBPS) - Biophytis shares resume trading following the implementation of measures ordered in connection with a dispute with NEGMA

Transparency directive : regulatory news

19/05/2020 23:02

Press release

  Biophytis shares resume trading following the implementation of measures
               ordered in connection with a dispute with NEGMA

Paris, (France), Cambridge (Massachusetts, United States), May 19, 2020, 11:00
p.m. CEST - Biophytis SA (Euronext Growth Paris: ALBPS), a clinical-stage
biotechnology company specialized in the development of drug candidates for
treatment of aged related diseases, amongst which neuromuscular diseases, today
announces that its shares will resume trading following the suspension
requested on May 7, 2020, pending the issuance of a summary judgment by the
President of the Paris Commercial Court, the same day, in connection with a
dispute with NEGMA Group LTD ("Negma").

Biophtyis entered into an ORNANE-BSA contract with Negma (the "Negma Contract
2019") on August 21, 2019. In the course of negotiation of an amendment to this
contract initiated in February 2020, the relationship between the parties
became difficult, leading to Biophytis terminating the contract, as announced
in the press release dated April 7, 2020.

Following this termination, Negma undertook legal action in order to claim
damages of EUR910,900 from Biophytis as well as the delivery of 7,000,000
Biophytis shares, that Negma considers it was entitled to pursuant to the only
Biophytis ORNANES still held by Negma, issued in consideration for a loan of
EUR1,400,000 in principal. The sum of EUR910,900 claimed by Negma corresponds
to the contractual penalties alleged by Negma under the terms of the Negma
Contract 2019, which provided for the payment of such penalties in the event of
conversion of bonds into shares when the stock price is below the par value of
the shares. Biophytis vigorously disputes this legal action and these requests
for payment and delivery of shares.

Pursuant to a summary judgment dated May 7, 2020, Negma obtained a decision
partially responding to its claims ordering, under penalty, Biophytis to (i)
pay damages in an amount of EUR378,067, and (ii) deliver 2,050,000 Biophytis
shares.

The judgment also required, pending their delivery, an escrowover the same
number of shares.

In order to avoid any obstacle to Biophytis' ability to deliver the shares
resulting from the exercise of securities giving access to capital, Biophytis
and Stanislas Veillet have entered into a related-party agreement authorized by
the Board of Directors on May 18, 2020, as a result of which they have made
irrevocable undertakings with a view to establishing an escrow over 2,050,000
shares. In connection with this, Stanislas Veillet has irrevocably undertaken
to exercise 1,680,000 Share Subscription Warrants (BSA), subscribed in
connection with the public offering announced on April 27, 2020.

As a result of the exercise of these BSAs, the company's capital is increased
to 41,437,325 shares, resulting in a dilution of 4.05% which has already been
accounted for in the dilution relating to the BSA issuance announced on April
7, 2020. These figures do not take into account the possible exercise of BSA by
other holders.

Under the above-mentioned related-party agreement, Biophytis undertook to
indemnify Stanislas Veillet for any direct damage (including consultancy or
legal fees) that he may suffer in his capacity as shareholder arising from the
establishment of this escrow.

Biophytis intends to refer the matter to the Paris Commercial Court as soon as
possible to decide on the merits of its position with regards to Negma and the
faults committed by the latter.

Furthermore, considering Negma's initial claims which were partially rejected
in the above summary judgment, Biophytis does not rule out that Negma may take
further judicial action in the context of this dispute.

Although Biophytis intends to appeal the May 7, 2020 judgment mentioned above,
it is enforceable. In order to perform its obligation to deliver the 2,050,000
shares to Negma, Biophytis favors the issuance of new shares and envisages, in
the days following the combined General Meeting, and subject to the passing of
the delegation of competence conferred by the tenth resolution of the combined
general meeting, to proceed with a capital increase reserved for Negma. It is
specified that this issuance of new shares will involve Negma's intervention in
the materialization of the receivable which will allow a subscription in
accordance with the above-mentioned delegation of competence (including issue
price). As a result of the issuance of the new shares, Biophytis' capital would
be increased to 43,437,325 shares, resulting in a dilution of 4.72%. This
figure takes into account the shares issued as a result of the partial exercise
of its BSAs by Biophytis CEO, as indicated above. Given the existence of
several prerequisites for the issuance, there is a risk that it may not take
place.

In the event that Biophytis is unable to deliver the 2,050,000 shares via the
issuance of new shares, it could make this delivery by redeeming its own
securities on the market, in compliance with regulatory requirements
supervising the redemption by a company of its own shares. The financial impact
of this transaction will be based on the price at which the securities can be
purchased by Biophytis. As an illustration, on the basis of the closing price
prior to the suspension of trading on May 7, 2020, i.e. EUR1,1640, the
acquisition of 2,050,000 shares by Biophytis would have a financial impact of
EUR2,386,200.

The performance of the May 7, 2020 decision will not jeopardize the financial
position of the Company, which has sufficient cash to meet its obligations and
needs until the end of the fiscal year. As of April 30, 2020, Biophytis' cash
position was at EUR7,2 million (compared to EUR6,3 million as at December 31,
2019).

In addition, Biophytis announced on April 7th the execution of a financing line
of up to EUR24 million raised from Atlas, a specialized investment fund based
in New York (USA). This contract provides for the issuance of 960 bonds
redeemable in cash or new or existing shares (ORNANEs), with a nominal value of
EUR25,000 each, and allows Biophytis to finance its activities for the next 18
months. This funding includes 8 tranches of EUR3 million each over a total
period of 3 years, with no obligation to draw. Biophytis drew the first tranche
of EUR3 million during the month of April 2020.

As a reminder, Biophytis announced on April 7, 2020, the launch of a new
clinical development program: COVA, with Sarconeos (BIO101) as a potential
treatment for respiratory failure associated with Covid-19. Applications for
authorization to launch this clinical study were made in France, the UK,
Belgium and the US. Biophytis received the approval from the Belgian Regulatory
Agency (FAMHP) to initiate the COVA clinical study in Belgium. This approval is
addressed in a separate press release which outlines COVA's clinical and
regulatory development plan in more detail.

Biophytis combined General Meeting took place on May 11, 2020 behind closed
doors, due to the COVID-19 pandemic. The shareholders taking part in the vote
owned collectively 6,649,625 shares, or 16.74 % of the share capital, and 19.92
% of the voting rights. The 20% quorum necessary for holding an ordinary
general meeting on first call and the 25% quorum necessary for holding an
extraordinary general meeting on first call were not reached and as a result
the general meeting has been adjourned.

Biophytis has therefore convened a new combined General Meeting to be held on
May 28, 2020. Biophytis strongly encourages its shareholders to exercise their
voting rights on this occasion. It is specified that the 2,050,000 shares
placed in escrow will not be taken into account for the exercise of the voting
right.

                                    ****

About BIOPHYTIS

Biophytis SA is a clinical-stage biotechnology company specialized in the
development of drug candidates to slow down degenerative processes and improve
functional abilities in patients with age-related diseases, especially
neuromuscular diseases.

Sarconeos (BIO101), our leading drug candidate, is a small molecule,
administered orally, currently in clinical Phase 2b in sarcopenia (SARA-INT) in
the United States and Europe. A pediatric formulation of Sarconeos (BIO101) is
being developed for the treatment of Duchenne Muscular Dystrophy (DMD). The
company plans to start the clinical development (MYODA) in H2 2020.

Sarconeos (BIO101) will also be developed as a treatment for Covid-19
(Coronavirus). The Company has received approval from the Belgian Regulatory
Authority (FAMHP) to begin the Phase 2/3 clinical trial (COVA) with Sarconeos
(BIO101), evaluating it as a potential treatment for respiratory failure
associated with Covid-19. The Company also filed clinical trial applications
with the FDA in the US, MHRA in the UK and the French regulatory agency, ANSM
in France.

The company is based in Paris, France, and Cambridge, Massachusetts. The
company's common shares are listed on the Euronext Growth Paris market (Ticker:
ALBPS-ISIN: FR0012816825). For more information www.biophytis.com.

Disclaimer
This press release contains forward-looking statements. While the Company
considers its projections to be based on reasonable assumptions, these
forward-looking statements may be called into question by a number of hazards
and uncertainties, so that actual results may differ materially from those
anticipated in such forward-looking statements. For a description of the risks
and uncertainties likely to affect the results, BIOPHYTIS' financial position,
performance or achievements and thus cause a change from the forward-looking
statements, please refer to the "Risk Factors" section of the Company's 2018
Annual Report available on BIOPHYTIS website (www.biophytis.com).

This press release, and the information contained in it, does not constitute an
offer to sell or subscribe, nor the solicitation of a purchase or subscription
order, of BIOPHYTIS shares in any country. The elements contained in this
communication may contain forward-looking information involving risks and
uncertainties. The Company's actual achievements may differ materially from
those anticipated in this information due to different risk and uncertainty
factors. This press release was written in French and English; If there is a
difference between the texts, the French version will prevail.

Biophytis Contact for Investor Relations
Evelyne Nguyen, CFO
evelyne.nguyen@biophytis.com

Media contact
Citigate Dewe Rogerson
Sylvie Berrebi/ Nathaniel Dahan/ David Dible / Quentin Dussart
biophytis@citigatedewerogerson.com
Tel: +44 (0) 20 7638 9571 / +33 (0)1 55 30 70 91

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BIOPHYTIS (EPA:ALBPS) - Biophytis shares resume trading following the implementation of measures ordered in connection with a dispute with NEGMA

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