Telesta closes US$28.6 million in private placement financing

Aug 19 2015

Telesta Therapeutics Inc. (TSX: TST) (PNK: BNHLF) announced today that it has closed a private placement financing of US$28.6 million. This transaction was led by several prominent U.S. healthcare investors, including Consonance Capital Investors, Boxer Capital of Tavistock Life Sciences and Omega Funds. In addition, certain members of the senior management team and board of directors of Telesta participated in the transaction.

Commenting on this strategic financing, Dr. Michael Berendt, Chief Executive Officer and Chief Scientist noted: "Attracting strong U.S. institutional investors has been a key corporate objective for us since we began our work to focus Telesta Therapeutics on human health and the U.S. market opportunity for MCNA. This financing will allow us to continue our dialogue with the U.S. Food and Drug Administration (FDA) as they evaluate our Biologics License Application (BLA) while accelerating our work to prepare for the commercial launch of MCNA in anticipation of US regulatory approval which could come as early as Q1/2016. These efforts include preparation for a potential advisory committee, the manufacture of MCNA commercial product and the development of the commercial infrastructure to launch MCNA in the United States."

Details of the Offering

Under terms of this financing, Telesta has issued 108,966,814 common shares at a subscription price per share of C$0.3405/US$0.2623 being the 5-day volume weighted average price of Telesta's common shares at the close of markets on Wednesday, August 12^th. The issuance of these shares brings the total number of issued common shares in Telesta to 280,798,258.

Funds affiliated with Consonance Capital Investors have purchased 56,037,004 common shares in this financing representing 19.96% of the outstanding shares of Telesta post financing. The private placement was completed primarily with accredited investors outside of Canada.

Ladenburg Thalmann acted as sole lead placement agent for this financing while Roth Capital Partners and Euro Pacific Canada Inc. acted as co-placement agents.

MCNA – Regulatory and Commercial Update

Telesta submitted its BLA to the U.S. FDA for MCNA on June 29, 2015 and expects to receive communication letters from the Agency in the next 30 days on i) the priority review determination (the Agency will grant either regular (10 month) or priority (6 month) review); ii) any filing issues identified; and iii) whether the Agency will establish an advisory committee as part of their review process. While all of these items remain review issues, Telesta is planning its internal regulatory, production and commercial activities in anticipation of priority review.

Partnering interest in MCNA remains robust both because of the late stage nature of the asset and the significant unmet medical need. Each of these partnership opportunities will be evaluated carefully in terms of the strength of the potential partner and the value brought to Telesta's shareholders.