21 September 2017 – Realm Therapeutics plc (AIM: RLM), a clinical stage biopharmaceutical company focused on leveraging its proprietary immunomodulatory technology, is pleased to announce today that it has successfully secured funding commitments to raise gross proceeds of approximately £19.3 million ($26 million) through a proposed placing (the “Placing”) with new and existing investors, including several healthcare specialist funds based in the US and UK. The Placing is conditional upon shareholder approval and a circular setting out details of the Placing (the “Circular”) and to convene a general meeting to seek approval for the transaction (the “General Meeting”) will be available on the Company’s website shortly and is expected to be posted to Shareholders later today.

Highlights

• Net proceeds of the Placing, approximately £17.6 million ($23.8 million) will be used primarily to advance the Company’s drug development programmes and for general corporate purposes including:
  • Further advancing our PR022 atopic dermatitis clinical programme beyond Phase IIa, but results of initial trials in PR022 and PR013 will drive prioritisation among these two lead indications
  • Conducting a Phase II proof of concept study in Acne Vulgaris, with PR023 a topical formulation in early development
  • Further evaluating the Company’s high concentration hypochlorous acid formulations for application in potential pipeline candidates, including psoriasis and dry eye
• Participating in the Placing are US and UK healthcare specialist funds, and new shareholders to Realm, including OrbiMed, BVF Partners LP, RA Capital Management, Abingworth BioEquities Master Fund Ltd and Polar Capital
• Charles Spicer, Non-Executive Chairman of the Company, and Alex Martin, CEO of the Company, will both participate in the Placing

Alex Martin, Chief Executive Officer of Realm Therapeutics, said:

“We are extremely pleased with the £19.3 million ($26 million) investment commitment from some of the world’s leading healthcare investors to advance our lead programmes in Atopic Dermatitis and Allergic Conjunctivitis and our additional pipeline. Their interest is a strong vote of confidence in our plans, our programmes, and our team, and we look forward to updating the market upon successfully closing the financing.”

Charles Spicer, Non-Executive Chairman of Realm Therapeutics added:

“The Board would like to thank both the proposed new and our existing shareholders for their support of Realm. This impressive syndicate of sector specialists in the financing attests to the potential value of our programmes. Realm remains focused on developing our two lead candidates while also seeking to prioritise further indications in which our proprietary technology may offer promising potential treatment to patients.”

The Placing, which was oversubscribed prior to allocation, will raise gross proceeds of approximately £19.3million ($26 million) through the issue of approximately 66.4 million Units at a price of 29 pence per Unit (each comprising one Placing Share and one Warrant to subscribe for 0.4 ordinary shares). The Placing Price represents the average closing bid price of an Ordinary Share during the five trading days to 19 September 2017, being the last practicable date prior to investors signing their binding Placing commitments. Each Warrant carries an exercise price per Warrant Share of 58 pence, being 200% of the Issue Price and a term of 2.5 years. The Placing Shares are expected to be admitted to trading on AIM at 8.00 am. on 10 October 2017 (with Warrant certificates delivered on or around 17 October 2017).

MTS Securities, LLC is acting as the US placement agent and N+1 Singer is acting as the UK broker and nominated adviser in connection with the Placing.

The Placing is conditional upon, amongst other things, approval by existing shareholders at the General Meeting expected to be held at 10.00 am on 9 October 2017 at the offices of CMS Cameron McKenna Nabarro Olswang LLP, Cannon Place, 78 Cannon Street, London EC4N 6AF. An extract from the Circular to Shareholders is set out below and the full Circular will be available at the Company’s website: www.realmtx.com shortly and is expected to be posted to Shareholders later today. This announcement should be read in conjunction with the Circular in its entirety, which will contain further details on the terms of the Placing and related matters.

Additionally, the Company is proposing to adopt new Articles to facilitate the potential issue of American Depositary Shares (ADSs), in the event that the Company pursues a US listing at some point in the future, and to reflect certain updates in applicable law and changes to best practice.

Enquiries:

Realm Therapeutics plc
+44 (0) 20 3727 1000
Alex Martin, Chief Executive Officer
Marella Thorell, Chief Financial Officer and Chief Operating Officer

FTI Consulting
+44 (0) 20 3727 1000
Simon Conway / Mo Noonan

N+1 Singer (Nominated Adviser & Broker)
+44 (0) 20 7496 3000
Aubrey Powell / Lauren Kettle

MTS Securities, LLC (US Placement Agent)
+1 212 887 2100
Ravi Mehrotra/Mark Epstein

This announcement is released by Realm Therapeutics plc and contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 (“MAR”), encompassing information relating to a proposed placing described herein, and is disclosed in accordance with the Company’s obligations under Article 17 of MAR.

For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is being made on behalf of the Company by Alex Martin, Chief Executive Officer, and Marella Thorell, Chief Financial Officer and Chief Operating Officer.

About Realm Therapeutics

Realm Therapeutics is a clinical-stage biopharmaceutical company focused on developing novel immunomodulatory therapies to protect and improve the lives of adults and children. The Company has initiated drug development programmes, based on its proprietary hypochlorous acid technology at high concentrations. The Company believes its formulations have novel immunomodulatory activity with potential application for the treatment of diseases in a number of therapeutic areas, including Dermatology and Ophthalmology.

About Atopic Dermatitis (AD)

AD, a serious form of eczema, is a chronic, relapsing, inflammatory disease characterised by itchy, inflamed skin, which poses a significant burden on patients’ quality of life and on the overall health care system. Patients with AD have impaired function of their skin barrier, and this, combined with skin damage as a result of the intense itching and scratching associated with the disease, makes them at risk for secondary infections due to colonisation with pathogenic bacteria (particularly Staphylococcus aureus) and changes in the skin microbiome. AD affects up to 20% of children and up to 3% of adults and prevalence numbers continue to increase.

About Allergic Conjunctivitis (AC)

AC is an inflammatory disease of the conjunctiva, the membrane covering the white part of the eye, caused primarily from a reaction to an allergen such as pollen, or pet dander, or other environmental antigens, and affects up to 40% of the United States population and up to 20% of the population of Europe and Japan, including children. This inflammation results in redness, acute itching, tearing and associated nasal symptoms. Approximately 30% of AC patients do not adequately respond to the current standard of care.

About Acne Vulgaris

Acne vulgaris is the most common chronic skin condition in the U.S., affecting approximately 45 million people, or 14% of the population. The disease can range from mild to severe cystic acne and is associated with significant physical and psychosocial effects on quality of life, including permanent scarring, depression and anxiety. The two main factors involved in the development of acne are clogged pores and/or the presence of bacteria, leading to irritation, lesions and inflammation.

Certain statements made in this announcement are forward-looking statements. These forward-looking statements are not historical facts but rather are based on the Company’s current expectations, estimates, and projections about its industry; its beliefs; and assumptions. Words such as ‘anticipates,’ ‘expects,’ ‘intends,’ ‘plans,’ ‘believes,’ ‘seeks,’ ‘estimates,’ and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties, and other factors, some of which are beyond the Company’s control, are difficult to predict, and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. The Company cautions shareholders and prospective shareholders not to place undue reliance on these forward-looking statements, which reflect the view of the Company only as of the date of this announcement. The forward-looking statements made in this announcement relate only to events as of the date on which the statements are made. The Company will not undertake any obligation to release publicly any revisions or updates to these forward-looking statements to reflect events, circumstances, or unanticipated events occurring after the date of this announcement except as required by law or by any appropriate regulatory authority.