Biotalys launches its Initial Public Offering on Euronext Brussels

Key terms of the Offering

• The Offering comprises up to 6,333,333 new Shares of the Company, which number may be increased by up to 15% (the “Increase Option”). Any decision to exercise the Increase Option will be communicated, at the latest, on the date of the announcement of the Offer Price (as defined below). The price range of the Offering has been set at €7.50 to €8.50 per Offered Share (as defined below) (the "Price Range").

• No minimum amount is set for the Offering.

• Based on the Price Range, and assuming the Offer Price (as defined below) will be at the midpoint of the Price Range, the size of the Offering will range between €50.67 million (assuming a placement of the maximum number of new Shares in the Offering, excluding the exercise of the Increase Option and the Over-allotment Option (as defined below)) and €67.01 million (assuming a placement of the maximum number of Offered Shares in the Offering, including the exercise in full of the Increase Option and the Over-allotment Option).

• The Offering comprises:

  • An initial public offering to retail and institutional investors in Belgium;

  • A placement in the United States to persons that are reasonably believed to be QIBs as defined in Rule 144A under the U.S. Securities Act; and

  • Placements to certain qualified and/or institutional investors in the EEA, the United Kingdom and Switzerland.

• The Offering outside the United States will be made in compliance with Regulation S under the U.S. Securities Act. Private Placements may take place in member states of the EEA pursuant to an exemption under the Prospectus Regulation.

• The Company has appointed Joh. Berenberg, Gossler & Co. KG and KBC Securities NV as Joint Global Coordinators and Joint Bookrunners, Belfius Bank NV/SA as Joint Bookrunner and Oppenheimer Europe Ltd. through Oppenheimer & Co. Inc. as Lead U.S. Bookrunner (together the “Underwriters”).

• Joh. Berenberg, Gossler & Co. KG will, on the Underwriters’ behalf (as defined below), act as stabilization manager (the “Stabilization Manager”). The Stabilization Manager will be able to over-allot Shares in the Offering (the “Additional Shares”, and together with the New Shares, referred to as the “Offered Shares”) in order to facilitate stabilization. The Stabilization Manager has been granted a warrant, subject to the closing of the offering, to subscribe for additional new Shares in a number equal to up to 15% of the number of New Shares subscribed for in the Offering at the Offer Price (as defined below) (the “Over-allotment Option”). The Over-allotment Option will be exercisable for a period of 30 calendar days following the Listing Date (as defined below) (the “Stabilization Period”). The Stabilization Manager may engage in transactions that stabilize, maintain or otherwise affect the price of the Shares during the Stabilization Period. These activities may support the market price of the Shares at a level higher than that which might otherwise prevail.

Commenting on today's announcement, Patrice Sellès, Chief Executive Officer of Biotalys, stated: “Biotalys is committed to transforming the way we produce food by applying innovative technologies to make food and crop protection safer and more sustainable. This is an exciting time in the Company’s development and we believe this offering represents a fantastic opportunity for all of us, from investors and employees to growers, to maximise the potential of our groundbreaking platform and product pipeline.”

Company Highlights

• Biotalys’ ambition is to address three core challenges facing global food production today:

  • the 1.6 billion tons of global food lost or wasted every year;

  • the agricultural impact on biodiversity, soil, water and human health;

  • the need for sustainable and safe food production safeguarding our future.

• Biotalys aims to address these challenges through the development of its products candidates which are designed to be effective, environmentally safer and cleaner protein-based biocontrol solutions.

• These product candidates have multiple applications aimed at helping growers address major food pests and diseases, more safely and sustainably, providing alternatives to conventional chemical pesticides in an integrated pest management framework and reducing chemical residues on food.

• The Company’s approach is powered by its AGROBODY Foundry™ platform, a scalable proprietary technology platform offering significant advantages compared to the development of new conventional chemical alternatives, most notably shorter and cheaper product development cycles.

• A diversified pipeline of seven product candidates in three different indications – biofungicides, bio-insecticides and biobactericides – targeting critical pests and diseases, with a combined potential addressable market of $4.8 billion.

• First product Evoca™ submitted to the EPA in the U.S. and the EU in December 2020 and March 2021 respectively, is designed to pave both the regulatory and commercial path of future products. A market test launch of Evoca™ in the US and EU, is expected to start between late 2022 and 2024.

• Portfolio of 15 families of proprietary patents related to the Company’s AGROBODY™ technology and product pipeline.

• Actively pursuing selective partnerships with food and agricultural players in search of innovative and differentiated solutions, expanding the potential, scope and value of the AGROBODY Foundry™ platform.

• Experienced management team with strong track record in the AgTech and biotech industries, backed by renowned local and international specialist shareholder base.

• Operations in Belgium and the U.S. with future commercialization plans to occur via distribution agreements, partnerships or on its own in certain markets where strategically valuable.

Offering timetable

• The Offering period will begin on 23 June 2021 and is expected to end no later than 16:00 (CEST) on 30 June 2021 for retail shareholders and 1 July at 14:00 (CEST) for institutional shareholders, subject to early closing or extension, provided that the offering period will in any event be open for at least six business days (the "Offering Period").

• The Offer Price (as defined below), the number of Offered Shares placed in the Offering and the allocation of Offered Shares to retail investors is expected to be made public on or about 1 July 2021 and in any event no later than the first business day after the end of the Offering Period.

• Listing and conditional trading, on an “if-and-when-issued/delivered” basis, on the regulated market of Euronext Brussels under the international securities identification number (ISIN) BE0974386188 and trading symbol “BTLS”, is expected to commence on or about 2 July 2021 (the “Listing Date”), provided that this may be accelerated in case of early closing or postponed in case of extension.

• Unconditional trading is expected to commence on or about 5 July 2021 and will start at the latest on the Closing Date. Delivery of the Offered Shares to the investors is expected to take place on or about 5 July 2021, in accordance with normal settlement procedures applicable to equity securities and against payment for the placement shares, provided that this may be accelerated in the event of early closing or postponed in case of extension (the “Closing Date”).

Final price and allocation

• The final price per Offered Share (the "Offer Price") will be determined during the Offering Period through a bookbuilding process in which only institutional investors may participate.

• The Offer Price will be a single price in euro, exclusive of the Belgian tax on stock exchange transactions, and of costs, if any, charged by financial intermediaries for the submission of applications. No tax on stock exchange transactions is due on the subscription for newly issued Shares, but such tax could be due on the subscription for existing Shares. The tax treatment will depend on each investor's individual circumstances and may change in the future.

• In accordance with Belgian regulations, a minimum of 10% of the Offered Shares shall be allocated to retail investors, subject to sufficient retail demand. However, the proportion of Offered Shares allocated to retail investors may be increased or decreased if subscription orders received from them exceed or do not reach, respectively, 10% of the Offered Shares effectively allocated. In the event of over-subscription of the Offered Shares reserved for retail investors, the allocation to retail investors will be made on the basis of objective allocation criteria, whereby all retail investors will be treated equally. The criteria to be used for this purpose are the preferential treatment of applications submitted by retail investors directly with KBC Securities NV and Belfius Bank NV/SA in Belgium and the number of Offered Shares for which applications are submitted by retail investors. The respective allocation criteria will be applied in the same manner for all retail subscriptions submitted at the counters of the Underwriters in Belgium and, although it may differ from the allocation criteria in the aforementioned, for all applications submitted by retail investors submitted through other financial intermediaries. In the event of an over-allotment of Offered Shares, the Underwriters will use reasonable efforts to deliver the newly issued Shares to individual persons residing in Belgium and to investors subject to Belgian income tax on legal entities (“rechtspersonenbelasting”/”impôt des personnes morales”), in this order of priority.

• Subscription orders by retail investors may be submitted directly with KBC Securities NV and Belfius Bank NV/SA, at no cost to the investor or alternatively through other intermediaries. Investors wishing to place purchase orders for the Offered Shares through such other intermediaries, should request details of the costs which these intermediaries may charge, and which they will have to pay themselves.

Pre-commitments and lock-up

• A number of investors (including all of the Company’s existing shareholders holding more than 5% of the outstanding Shares prior to the closing of the Offering, Federale Participatie- en Investeringsmaatschappij (FPIM) and BNP Paribas Fortis Private Equity Belgium) (the “Participating Investors”), have (in the aggregate) irrevocably committed themselves vis-à-vis the Company, conditionally only on (i) full allocation of their respective subscription commitment, and (ii) completion of the Offering, to subscribe for new Shares in the Offering for an aggregate amount of €27.86 million (the “Pre-commitments”).

• In the event of over-subscription of the Offering, the subscription commitments of the Participating Investors shall not be reduced but be allocated entirely. As there is no minimum amount of the Offering, if not all of the Offered Shares are subscribed for in the Offering, the net proceeds from the Offering could be limited to the net proceeds from the subscription commitments.

• The current shareholders that hold 1% or more of the Company’s Shares as at today and the members of the Board of Directors and Executive Committee of the Company agreed to lock-up their pre-IPO Shares and warrants for a period of twelve months after the Closing Date, as well as any of the new Shares that may be subscribed for by current shareholders that hold 1% or more of the Company’s shares as at today in the Offering at the Offering Price for a period of three months after the Closing Date, subject to certain exceptions, including a coordinated sale. These lock-up arrangements do not apply to any new Shares that may be subscribed after the closing of the Offering by such shareholders holding 1% or more of the Company’s Shares as at today. The Company is expected to agree to a standstill on the issuance of new Shares and issuance of new warrants for a period as from the Closing Date until 12 months after the date of the Underwriting Agreement, subject to customary exceptions, including for share-based incentives for an incentive plan for staff members, consultants and directors of the Company or its subsidiaries up to 10% of the Shares outstanding following closing of the Offering.

Use of Proceeds

Biotalys intends to use the net proceeds of the Offering as follows:

• €18.1 million to €20.3 million to fund the development of its existing pipeline, including discovery, development, fields trials, manufacturing scale up and regulatory costs;

• €9.0 million to €11.3 million to fund the continued improvement and optimization of its AGROBODY Foundry™ platform and to fund the extension of its pipeline (including potentially through partnered programs);

• €9.0 million to €11.3 million to fund its go-to-market strategy including distribution costs related to setting up a supply chain, warehouse & logistics, costs for distribution via partners, etc. and business development efforts; and

• €4.5 million to €6.8 million for general corporate purposes.

• The Company has the right to proceed with a capital increase for a reduced amount, it being understood that, in a worst case scenario, the net proceeds of the Offering would be equal to the net proceeds from the Pre-commitments of the Participating Investors. In such case, the proportional allocation of proceeds would change from the allocations set forth above to reflect a higher percentage of investment in the existing pipeline and a lower percentage to fund the continued improvement and optimization of Biotalys’ AGROBODY Foundry™ platform and Biotalys’ go-to-market strategy.

Summary Timetable

Prospectus and other information

• The English version of the prospectus has been approved by the Belgian Financial Services and Markets Authority on 22 June 2021 (the "Prospectus"). The FSMA only approved the Prospectus (including the summary of the Prospectus, the “Summary”) as meeting the standards of completeness, comprehensibility and consistency imposed by the Prospectus Regulation. Such approval should not be considered as an endorsement of the Company or the quality of the Offered Shares that are the subject of the Prospectus. Investors should make their own assessment as to the suitability of investing in the Offered Shares.

• The full Prospectus is available to prospective investors in Belgium in English and Dutch, and the Summary is available in French.

• The Prospectus shall be made available to investors free of charge as of 23 June 2021 (before opening of the markets) at the registered office of the Company (Biotalys NV, Buchtenstraat 11, Ghent 9051, Belgium) and on the websites of Biotalys (www.biotalys.com/investors), KBC (www.kbcsecurities.com, www.kbc.be/biotalys and www.bolero.be/nl/Biotalys) and Belfius Bank NV/SA (www.belfius.be/Biotalys2021). The Prospectus can also be consulted as of 23 June 2021 (before opening of the markets) on the website of the Company (https://www.biotalys.com/investors), whereby the access on the aforementioned websites is each time subject to the usual limitations.

• An investment in the Offered Shares involves substantial risks and uncertainties. Potential investors are recommended to read the Prospectus before making an investment decision in order to fully understand the potential risks and rewards associated with the decision to invest in the Offered Shares. Prospective investors must be able to bear the economic risk of an investment in the Offered Shares and should be able to sustain a partial or total loss of their investment. The Offering is subject to Belgian law and the courts of Brussels are exclusively competent to adjudicate any and all disputes with investors arising out of or in connection with the Offering and/or the Offered Shares.

Key risks specific to Biotalys, the Offering and the Shares

The following is a selection of key risks specific to Biotalys, the Offered Shares and the Offering as such that, alone or in combination with other events or circumstances, could have a material adverse effect on the Company’s business, financial condition, results of operations and prospects.

• Biotalys has never brought a product to the market. All but one of the Company’s product candidates are still in early stages of discovery. Only one product candidate (Evoca™) is in the registration phase, but will, if regulatory approval is obtained, only be introduced as a market test and is not expected to become a profitable product for Biotalys. Biotalys’ technology platform, AGROBODY Foundry™, and the modes of action of its product candidates are novel, have not been tested on a commercial scale, may not result in a marketable product in the near term, if ever or may not be well understood, may be difficult to apply or may not be accepted by customers. This is driven by a number of factors and subject to a number of risks, including:

  • A high degree of difficulty to identify during the discovery phase suitable product characteristics that will eventually withstand use in an open agricultural environment. In particular, field trials may demonstrate that identified product candidates are not safe and/or do not reach sufficient efficacy. If field trials are unsuccessful, Biotalys may be unable to complete the development of, obtain regulatory approval for, or commercialize its product candidates on a timely basis or at all.

  • The market for biological agricultural products is still underdeveloped. Biotalys’ innovative food protection product candidates may not be well understood, may be difficult to apply, require investment in customer education and may be slowly adopted or not at all be accepted by customers. Also, the agricultural industry is consolidated from crop protection product producers to distributors to retailers which further increases the entry level for new innovative products. In addition, the crop protection industry itself is highly competitive with an important market share taken up by major multinational agrichemical companies, and Biotalys may struggle to obtain and maintain a favorable market position.

  • The uncertainty that product candidates can be produced on a larger scale at competitive prices compared to conventional chemical pesticide products that are typically less expensive and more effective than biologicals. The current costs of manufacturing Biotalys’ product candidates are high. The Company has also not yet been able to cost-effectively manufacture any products on large scale for use in commercial environments. Biotalys may not be able to manufacture its product candidates in an economically viable manner and/or its product candidates may not be competitive in the target markets.

  • Biotalys has a limited operating history and has not yet generated any revenues. The Company has incurred operating losses, negative operating cash flows and an accumulated deficit since inception and may not be able to achieve or subsequently maintain profitability. Biotalys is executing its strategy in accordance with its business model, the viability of which has not been demonstrated.

• Biotalys has no own production facilities to manufacture its product candidates if and when regulatory approval would be obtained and expects to rely in the near term on a single third-party manufacturer. If Biotalys is unable to find one or more suitable third-party manufacturer(s) or if it is unable to produce Biotalys’ product candidates at a satisfactory quality, in a timely manner, in sufficient quantities or at an acceptable cost, the Company’s results of operations will be materially adversely affected.

• As a result of Biotalys’ dependence on third parties, it also depends on the confidentiality obligations of third parties under the relevant agreements, which might not provide adequate protection for its confidential information.

• Biotalys’ future growth and ability to compete depends on its key personnel and recruiting additional qualified personnel. The Company may be unable to attract and retain management and other personnel it needs to succeed.

• Concerns and claims regarding the safe use of products with biotechnology traits and crop protection products in general, their potential impact on health and the environment, and the perceived impacts of biotechnology on health and the environment can affect regulatory requirements and customer purchase decisions, which could have a material adverse effect on the viability of certain of Biotalys’ product candidates, its reputation and the cost to comply with regulations.

• Biotalys’ business could be adversely affected by the introduction of alternative crop protection measures such as pest resistant seeds or genetically modified (“GM”) crops or by increased weed and insect resistance.

• Biotalys has not yet obtained regulatory approval for any of its product candidates. The crop protection products industry is subject to a stringent regulatory environment including extensive regulations for obtaining product registrations. Biotalys may not be able to obtain or maintain the necessary regulatory approvals for its product candidates, which will restrict its ability to sell the product candidates in some markets. Biotalys’ inability to obtain regulatory approvals, or to comply with ongoing and changing regulatory requirements, could delay or prevent sales of the product candidates Biotalys is developing and intends to commercialize.

• Biotalys uses animals in its research and development activities. Policy reform, including recent EU policy reforms, and the public perception regarding the use of animals for scientific purposes could delay or even prevent the development and commercialization of any potential product candidates.

• Biotalys’ success will depend significantly on its ability to protect its intellectual property and proprietary and licensed in rights, and any inability to fully protect and exploit Biotalys’ intellectual property and confidential know-how may adversely affect its financial performance and prospects.

• In Biotalys’ opinion, it does not currently have sufficient working capital to satisfy its present or anticipated future working capital requirements for at least the next 12 months following the date of the Prospectus.

• The market price of the Shares may fluctuate widely in response to various factors. Investors may not be able to resell their Shares at or above the Offering Price and may lose all or part of their investment.

• Certain significant shareholders of the Company after the Offering may have different interests from Biotalys and may be able to control the Company, including the outcome of shareholder votes.