ESSA Pharma wraps up $48 mln offering and private placement

Vancouver-based pharmaceutical company ESSA Pharma Inc (Nasdaq: EPIX, TSX-V: EPI) has closed a public offering and private placement, generating proceeds of about $48 million (US$36 million).

The offering was led by Soleus Capital and included new investor RA Capital Management, a U.S. healthcare and life sciences investment firm. Existing backers of ESSA, including BVF Partners, Omega Funds and Eventide Funds, also participated.

The company is also backed by Clarus Ventures, a U.S. life sciences venture capital firm acquired last year by Blackstone Group.

Founded in 2009, ESSA is focused on developing therapies for treating castration-resistant prostate cancer in patients whose disease is progressing despite treatment with other therapies. It will use the deal’s proceeds for continued research and development.

PRESS RELEASE

ESSA Pharma Completes Public Offering and Concurrent Private Placement for Aggregate Gross Proceeds of US$36 Million

VANCOUVER and HOUSTON, Aug. 27, 2019 /PRNewswire/ – ESSA Pharma Inc. (NASDAQ: EPIX; TSXV: EPI) (“ESSA” or the “Company”), a pharmaceutical company focused on developing novel therapies for the treatment of prostate cancer, is pleased to announce that, further to its previously announced equity offering, it has closed a public offering of equity securities of the Company in Canada and a concurrent private placement of equity securities in the United States for aggregate gross proceeds of US$36 million (the “Offering”). The Offering was led by Soleus Capital and included RA Capital Management as a new investor. Existing investors, including BVF Partners LP, Omega Funds, and Eventide Funds, among others, also participated in the Offering.

The Company intends to use the net proceeds of the Offering primarily to complete the Phase 1 dose-escalation and extension studies, Phase 1 combination studies with recent anti-androgens and initiate Phase II studies. In addition, the Company plans to conduct preclinical studies with EPI-7386 in additional prostate and breast cancer models as well as to continue the development of additional Aniten molecules. According to current plans, the net proceeds combined with the company’s current cash reserves are expected to provide sufficient cash resources through 2022.

The Offering was completed in each of the provinces of British Columbia, Alberta and Ontario by way of a prospectus supplement dated August 23, 2019 to ESSA’s base shelf prospectus dated July 12, 2018 and in the United States on a private placement basis pursuant to Rule 506(c) of Regulation D under the Securities Act of 1933, as amended (the “U.S. Securities Act”). Pursuant to the Offering, ESSA issued a total of 6,080,596 common shares and 11,919,404 pre-funded warrants in lieu of common shares of the Company at a price of US$2.00 per security for aggregate gross proceeds of US$36,000,000. Each pre-funded warrant (together with the common shares, the “Securities”) entitles the holder thereof to acquire one common share at a nominal exercise price for a period of 60 months following the closing of the Offering.

The Offering was undertaken on a best efforts basis pursuant to the terms and conditions of an agency agreement (the “Agency Agreement”) dated August 23, 2019 between the Company and Bloom Burton Securities, Inc. (“Bloom Burton”) as the Company’s sole agent for the Offering in Canada. Oppenheimer & Co. Inc. (“Oppenheimer”, together with Bloom Burton, the “Agents”) acted as the exclusive U.S. placement agent. The Agents were paid a cash commission equal to 7.0% of the gross proceeds of the Offering (except in respect of Securities issued to certain specified purchasers, in which case the cash commission was reduced to 3.5%).

The issuance of the common shares under the Offering constitutes a related-party transaction under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”) due to the participation by certain insiders of the Company. These transactions are exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 pursuant to sections 5.5(a) and 5.7(1)(a) of MI 61-101 as neither the fair market value of any securities issued to nor the consideration paid by such persons exceeds 25.0% of the Company’s market capitalization.

The Securities have not been registered under the U.S. Securities Act or any state securities laws, and accordingly, they may not be offered or sold to, or for the account or benefit of, persons in the United States, or “U.S. persons,” as such term is defined in Regulation S promulgated under the U.S. Securities Act (“U.S. Persons”), except in compliance with the registration requirements of the U.S. Securities Act and applicable state securities requirements or pursuant to exemptions therefrom.

About ESSA Pharma Inc.
ESSA is a pharmaceutical company focused on developing novel and proprietary therapies for the treatment of castration-resistant prostate cancer (“CRPC”) in patients whose disease is progressing despite treatment with current therapies. ESSA’s proprietary “aniten” compounds bind to the N-terminal domain of the androgen receptor (“AR”), inhibiting AR driven transcription and the AR signaling pathway in a unique manner which bypasses the drug resistance mechanisms associated with current anti-androgens. The Company is currently progressing IND-enabling studies and expects to file an IND with the FDA for EPI-7386 in the first calendar quarter of 2020. For more information, please visit www.essapharma.com or follow us on Twitter under @ESSAPharma.

About Prostate Cancer
Prostate cancer is the second-most commonly diagnosed cancer among men and the fifth most common cause of male cancer death worldwide (Globocan, 2018). Adenocarcinoma of the prostate is dependent on androgen for tumor progression and depleting or blocking androgen action has been a mainstay of hormonal treatment for over six decades. Although tumors are often initially sensitive to medical or surgical therapies that decrease levels of testosterone, disease progression despite castrate levels of testosterone generally represents a transition to the lethal variant of the disease, metastatic CPRC (“mCRPC”), and most patients ultimately succumb to the illness. The treatment of mCRPC patients has evolved rapidly over the past five years. Despite these advances, additional treatment options are needed to improve clinical outcomes in patients, particularly those who fail existing treatments including abiraterone or enzalutamide, or those who have contraindications to receive those drugs. Over time, patients with mCRPC generally experience continued disease progression, worsening pain, leading to substantial morbidity and limited survival rates. In both in vitro and in vivo animal studies, ESSA’s novel approach to blocking the androgen pathway has been shown to be effective in blocking tumor growth when current therapies are no longer effective.