MPI and OV enters exclusivity and ownership agreements of SPVs - financing secured for the first two SPVs

2016-12-30

Hoersholm, Denmark, December 30th, 2016 - Medical Prognosis Institute (MPI.ST) and Oncology Venture Sweden AB (OV.ST) today announced that the companies have entered into agreements about: an exchange of exclusivity for warrants, an agreement regarding 2X Oncology Inc. with three anticancer products in pipeline and finally establishment of new OV-SPV2 - project Tyrosine Kinase inhibitor. Seed financing a total of non-diluting 4 mUSD have been secured for the two SPVs.

Completion of the transactions are conditional upon approval by the shareholders' meeting in OV.

MPI and OV have today entered into an agreement related to the DRP license where MPI grants OV a three year world-wide exclusivity to the MPI Drug Response Prediction (DRP(TM)) technology which OV will use for drug development. Accordingly, OV will have exclusive rights for the development of DRPs for the individual drugs and for clinical use. OV can use these rights directly or in spinouts in SPVs like 2X Oncology, Inc. with rights to three anticancer products and OV-SPV2 with rights to one high risk product. In return for the extended exclusive license MPI is to receive warrants entitling to subscription of shares in OV at a price of SEK 10 per share. The warrants will be exercisable until December 31st 2019 and upon full exercise of the warrants, the total dilution will be approximately 2.9 %.
Furthermore, OV and MPI have agreed to convert the OV license payment to MPI in relation to projects spun out to SPVs, which was 10 % of all payments and earnings from drugs developed by SPVs, to a 10 % share ownership in SPVs like 2X Oncology, Inc. and OV-SPV2. The establishment of SPVs will open the possibility of attracting international and private capital and thus enabling a larger number of drug candidates and more indications of the drugs in development to be investigated for the common benefit.

"These three deals are very important for both MPI and OV and substantiates the continued strong collaboration between the two companies. The deals will enable further value creation through more shots on goal in OV-SPV2 and 2X Oncology where the seed rounds of approximately 4 mUSD have been attracted," says Peter Buhl Jensen, M.D., CEO of MPI. "I believe this is a win, win situation where direct shareholding can offer financial liberty and MPI retains a tax-free >10% ownership of OV and secures a dedicated time-restrained goal seeking partnership to fast and repeated reach proof of concept and value creation," Buhl Jensen further comments.

"I believe that the agreement between MPI and OV has several merits: the DRP technology obtains more shots on goal and the direct ownership in OV and its spinouts gives MPI a better flexibility, control and financial liberty of the value created via OV. Finally, the agreements secures that OV and MPI have an aligned and continued interest moving the DRP forward as a valuable tool for improving cures for cancer patients," says Frank Knudsen, Chairman of MPI.

"For the MPI investor, these deals mean a remarkable direct participation in the development of 4 additional cancer drugs without any dilution. The exclusivity agreement has the potential of increasing the participation in these and other drugs even further," says Steen Knudsen, MPI founder.

"This series of transactions will result in a larger number and a broader range of products in OV's development portfolio. Any success from this larger portfolio of exciting drug candidates will clearly lower our cost of capital for future projects. In this regard the exclusive arrangement between MPI and Oncology Venture gives the shareholders of OV a period of 3 years in which to maximise the value from our drug development business model," says Duncan Moore Chairman  of OV.

About MPI's multiple biomarker called Drug Response Predictor - DRP(TM)
MPI's DRP(TM) is a tool for developing tumor-derived genetic signatures to predict which cancer patients are high likely to respond to a given anti-cancer product. The DRP(TM) has been tested in 37 trials, where 29 trials showed that drug-specific DRP(TM) Biomarkers could predict which patients responded well to the treatment. The DRP(TM) platform has amongst others been externally validated and published in collaboration with leading statisticians at the MD Anderson Cancer Center. The DRP(TM) method can be used to design the Clinical Development Plan, i.e. to select which indications are relevant for a given   anti-cancer drug.  In addition to this, the individual genetic patterns of patients can be analyzed as part of a screening procedure for a clinical trial to ensure inclusion of patients with a high likelihood of response to the drug. DRP(TM) builds on comparison between sensitive and resistant human cancer cell lines, including genomic information from cell lines combined with clinical tumor biology and clinical correlates in a systems biology network. The DRP(TM) is a Big Data tool based on messenger RNA.
The DRP(TM) platform can be used in all cancer types, and has been patented for more than 60 anti-cancer drugs in the US.

About MPI
Medical Prognosis is a publicly traded international company specialized in improving cancer patients lives by developing Personalized Medicine using its unique DRP(TM) technology. MPI's exceptional opportunity to personalize cancer treatment - begins with Breast Cancer moving on to Multiple Myeloma and Prostate Cancer as the first steps. MPI's DRP(TM) tool has shown its ability to separate patients who benefit and who do not benefit from a specific cancer treatment. This has been shown in as many as 29 out of 37 trials, and covers more than 80 anti-cancer treatments in a wide range of cancer indications. MPI has built a significant large database with over 1,100 screened breast cancer patients and is building up a database in Multiple Myeloma to be followed by Prostate cancer in collaboration with oncologists and hematologists throughout Denmark.

For further information, please contact:
CEO, Peter Buhl Jensen, Adjunct Professor, MD, PhD                             
E-mail: pbj@medical-prognosis.com                                                         
Telephone: +45 21 60 89 22                                                                                     

Ulla Hald Buhl, IR & Communication
E-mail: uhb@medical-prognosis.com
Telephone +45 21 70 10 49

This information is information that Medical Prognosis Institute A/S is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, on December 30th 2016.

Certified Advisor: Sedermera Fondkommission, Norra Vallgatan 64, 211 22, Malmö, Sweden