Iconovo carries out a directed share issue that provides the company with approximately 19.2 MSEK. The issue is directed to a number of existing shareholders, including Gerald Engström who has chosen to invest 12.5 MSEK, making him the largest shareholder in the company. This not only strengthens the ownership structure but also creates the necessary conditions for working strategically towards the long-term goals.
Iconovo develops complete inhalation products in collaboration with international pharmaceutical companies. The company’s most advanced project is ICOres budesonide/formoterol, a generic version of AstraZeneca’s Symbicort, which is expected to be launched in 2025.
Iconovo has set financial targets to reach profitability in 2026, as well as revenue of 250 MSEK and an EBITDA of 125 MSEK in 2027. In addition, the company expects to achieve profitability in a single quarter in both 2024 and 2025.
Directed share issue to reach the targets
To create the conditions for achieving these goals, the company has carried out a directed share issue comprising a total of 1 533 375 shares and providing the company with approximately 19.2 MSEK. The subscription price is set at 12.50 SEK per share, corresponding to a price premium of approximately 1.2 percent in relation to the closing price on September 26.
Gerald Engström new major shareholder
The new share issue not only provides Iconovo with financial resources, but also a new major owner – Gerald Engström, who is the founder of the ventilation manufacturer Systemair. Engström is currently an active investor, with approximately 50 companies in his portfolio, worth approximately 7.6 billion SEK. The portfolio includes companies such as Hanza, Volvo, Millicom and Scandic Hotels Group.
Prior to the directed share issue, Gerald Engström owned 400,000 shares worth 5.6 million in Iconovo, according to Holding’s database as of August 29 this year. Through the share issue, he was given the opportunity to invest an additional 12.5 MSEK in the company. Iconovo believes that the new principal owner has a positive impact on the company’s ownership structure:
“We are pleased to welcome our new major shareholder Gerald Engström, who is a successful investor with extensive experience in the business world. His commitment to the company shows confidence in our vision and our strategy to achieve our long-term goals”, says CEO Johan Wäborg in a comment to BioStock
Demonstrated interest from more shareholders
Additional shareholders in Iconovo have also shown interest in the share issue. Other participants are Andra AP-Fonden, Mats Leander, Humle Fonder, Cicero Fonder and Michael Katina via Eber Holding, as well as Mats Johansson, who is a board member and the former largest shareholder in Iconovo.
The share issue is conducted through two tranches, of which the second tranche is directed only to Abraxas Holding, controlled by board member Mats Johansson.
Directed share issue instead of rights issue
Iconovo chose to carry out a directed share issue instead of a rights issue for several reasons. According to the company, a rights issue would probably have required significantly more time and resources to be carried out effectively. In addition, there are no guarantees that a rights issue would be fully subscribed. If the rights issue had not been fully subscribed, the remaining shares would have had to be subscribed for by guarantors who often demand high compensation in exchange.
Iconovo also assumes that a rights issue would likely have required a discount on the shares, which would have led to a greater dilution for existing shareholders. The total dilution effect for the current rights issue amounts to approximately 13 per cent, which is a more favorable solution for the shareholders according to the company.
Launch of ICOres and out-licensing of ICOpre
The directed share issue secures the financial resources necessary to continue working towards the company’s financial targets. To achieve the goals, it is important that Iconovo succeeds in licensing its Ellipta generic ICOpre in 2024, as well as launching ICOres budesonide/formoterol in 2025. The company has initiated the contact phase of the out-licensing process for ICOpre, and the study program for ICOres is progressing according to plan.
Another important component of becoming cash flow positive is the company’s contract development (CDMO) of inhalable drugs, which in the long run can lead to licensing agreements or inhaler sales.
Strengthened by the directed share issue, Iconovo now looks forward to driving the projects towards achieving sales growth and profitability:
“The proceeds from the directed share issue provide us with a valuable capital injection that will help us take the company to the next level. We now look forward to driving our projects forward, including the launch of ICOre’s budesonide/formoterol and the outlicensing of ICOpre”, says CEO Johan Wäborg in a comment to BioStock.The content of BioStock’s news and analyses is independent but the work of BioStock is to a certain degree financed by life science companies. The above article concerns a company from which BioStock has received financing.