ATXA Therapeutics

22nd Jan 2024

***Changes to Campaign Terms***

We wish to bring to your attention important changes to the Offer, which, on balance, arguably results in a better offer to the Spark investor. 

Firstly, there is no change to the EIIS nature of the investment.

At initial launch of its campaign, the ATXA fundraise was set to close in late December where, under the EIIS guidelines, investors could avail of 40% tax incentive as well as 8% interest.  However, as a result of changes to the EIIS legislation introduced in the October 2023 Budget, from January 2024 EIIS investments into companies such as ATXA could now avail of 50% tax incentive but can no longer receive the 8% annual coupon (on exit) that was specified as part of the initial Offer.  Following queries from prospective Spark Crowdfunding investors regarding the increase in EIIS tax break from 40% to increase to 50% to come into force in January, ATXA agreed to delay its close from December until sometime in January so that investors could avail of the increased tax incentive. Of course, under the EIIS guidelines, this also meant that investors could no longer receive the 8% interest. 

However, to further compensate for this small change, ATXA has agreed that for Spark Crowdfunding investors, its Company valuation will be reduced from €40m to €31.6m, which is approximately a 20% reduction in the original Company valuation that was proposed for the Spark fundraising campaign.  

In effect, Spark investors would therefore be buying shares at a company valuation of €31.6m, as opposed to the original €40m company valuation, but the 8% coupon (on exit) would no longer be provided.  

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ATXA’s lead drug, NTP42, is at early-to-mid stage clinical development and has been successfully tested in the initial First-in-Human (FIH) Phase 1 clinical trial in 79 healthy male volunteers. ATXA is a pre-revenue company but its progress on NTP42 through various clinical milestones has brought it closer to being “Phase II Ready”, ahead of actually commencing  Phase II clinical trials in PAH patients. Demonstration of NTP42’s clinical efficiency (that it works in patients!) in these Phase II trials, due to run from ~ late 2024 through to late 2026, would boost ATXA’s equity valuation significantly and position the company for lucrative M&A or licencing deals with global pharmaceutical players. 
 

Key highlights:

• €15 million has been invested in ATXA,
• Confirmation of NTP42’s drug stability for up to 5 years,  
• Development of oral formulation of  NTP42 for clinical use successfully achieved.
• Expansion of ATXA’s patented estate (pharma assets) has expanded from 9 granted in 2019 to 15 granted today (including 8 in USA, 3 in Europe, 2 in Japan and 1 each in Canada and Australia)
• 2022 receipt of €2.5M of grant funding from the EC’s Horizon Europe EIC Accelerator program with as further pledge of up to €8M from the prestigious EIC Fund.
• Total accessible market (TAM) for ATXA is the global PAH therapies market, last valued in 2022 at $7.3 billion and expected to grow to $9.5 billion by 2027.
• Based on the total number of PAH patients globally (300,000 – 500, 000), the TAM for NTP42 could be significantly higher, valued in the range of $13.7 billion to $22.8 billion.