Sementis IM June 2011
Sementis IM June 2011
Sementis IM June 2011
INFORMATION MEMORANDUM
FOR THE CAPITAL RAISING OF UP TO 37.5 MILLION SHARES AT 8 CENTS PER SHARE TO RAISE 3 MILLION DOLLARS THE SEMENTIS INFORMATION MEMORANDUM IS ISSUED BY SEMENTIS PTY LTD ACN 138 550 811 FOR FURTHER INFORMATION PLEASE CONTACT: DAMIAN GILL MANAGER CORPORATE AFFAIRS TEL +61 (0)414 630 255 EMAIL DAMIAN.GILL@SEMENTIS.COM.AU
SEMENTIS GROUND BREAKING VACCINE TECHNOLOGY COULD RESULT IN AN EXTRAORDINARY RANGE OF VACCINE PROTOTYPES.
IMPORTANT INFORMATION INVESTMENT PROFILE AND KEY FEATURES SEMENTIS: IMMUNE PAYLOAD THE PLATFORM TECHNOLOGY THE PEANUT ALLERGY OPPORTUNITY THE Q FEVER OPPORTUNITY THE CHIKUNGUNYA OPPORTUNITY INVESTMENT RISKS ADDITIONAL INFORMATION
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CONTENTS
CONFIDENTIAL
This document and its attachments are the property of Sementis Pty Ltd and may not be used or reproduced in any form by parties other than those authorised, without prior written approval.
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IMPORTANT INFORMATION
This is an Information memorandum and is dated June 2011. This document has been issued by Sementis Pty Ltd ACN 138 550 811 (Sementis) to provide investors with general information to assist them in making their own independent evaluation of whether they wish to proceed with a possible investment in Sementis by subscribing for shares in the capital of Sementis as described in the Information Memorandum (Offer). RISKS Prospective investors should be aware that investment in the shares does carry various risks, both specific to Sementis and general investment risks. Sementis is subject to all the usual risks associated with new emerging companies involved in developing biotechnology. Accordingly, investment in the shares offered pursuant to this Information Memorandum (shares) should be considered highly speculative. Prospective investors should note that, as it is not possible to identify all risks, the risks identified in this Information Memorandum are not exhaustive. Investors should have regard to their own investment objectives and the advice of their accountant, financial adviser, stockbroker, lawyer or other independent professional adviser before deciding whether to invest. The Shares to be issued pursuant to this Information Memorandum carry no assurance with respect to the payment of dividends, return of capital or the value of the Shares. The immediate success of Sementis is largely dependent on the successful development, commercialisation and launch of the SCV technology and Sementis lead product, PHAV. The key business risks associated with Sementis are listed in pages 36 to 38. Please refer to page 36 for further details in relation to Investment Risks. UNDERWRITING The Offer is not underwritten. FORWARD LOOKING INFORMATION This Information Memorandum contains forward looking and other subjective information. Such forecasts, projections and information are not a guarantee of future performance and involve unknown risks and uncertainties. Actual results and developments will almost certainly differ from those expressed or implied and you should make your own assessment of the opinions, estimates, projections and the relevant assumptions and calculations upon which the opinions, estimates and projections are based. No representation or warranty, express or implied, is given as to the accuracy of the information or opinions contained in this document and no liability is accepted by Sementis or its directors, members, officers, employees, agents or advisers for any such information or opinions. PRIVACY DISCLOSURE The Company collects information in relation to each Applicant as provided on an Application Form (Information) for the purposes of processing the Application Form and, should the Application be successful, to administer the Applicants security holding in the Company (Purposes). The Company may use the Information for the Purposes and the Company may disclose the Information for the Purposes to the Share Registrar, the Companys related bodies corporate, agents, contractors and third party service providers, and to ASX, ASIC and other regulatory authorities. The Information may also be used and disclosed to persons inspecting the register, including bidders for your shares in the context of take-overs, licensed securities dealers, mail houses, and regulatory bodies including the Australian Taxation Office.
DISCLAIMER NOTICE The purpose of this Information Memorandum is to provide selected parties (Recipients) with certain information regarding the Company on a private and confidential basis for use solely in connection with their consideration of investing in shares in the Company. The offer of Shares under this Information Memorandum is only available to sophisticated or professional investors as described under section 708 (8) and 708 (11) of the Corporations Act (Cth) (Corporations Act) or to whom an offer can be made without the need for a disclosure document to be provided under the Corporations Act. Accordingly, the Information Memorandum may not be copied or reproduced, in whole or part, for any purposes other than that for which it is intended and none of its contents may be divulged to third parties without the prior written consent of the Company. This Information Memorandum is not a product disclosure statement, or prospectus and has not been lodged with or registered by the ASIC, and is not regulated by Part 6.2D or Part 7.9 of the Corporations Act. As such there is a lower level of disclosure required than would be required in a Product Disclosure Statement or any such other disclosure document. The information contained in this Information Memorandum or subsequently provided to the Recipient whether orally, electronically or in writing by or on behalf of Sementis or its respective employees, agents, or consultants is provided on the terms and conditions of this notice. The Information Memorandum does not purport to be all inclusive or contain all of the information which its recipients may require in order to make an informed assessment about whether to invest in shares in Sementis. Accordingly, the Information Memorandum does not take into account the investment objectives, financial situation and particular needs of the individual investor. Before making an investment in the Company, the investor, or proposed investor, should consider whether such an investment is appropriate to their particular investment needs, objectives and financial circumstances and consult an investment advisor if necessary. Recipients should not rely on any statement contained in this Information Memorandum and instead determine their interest in the Offer on the basis of independent investigation that they consider necessary or desirable. The Company and each of its agents, directors, officers and employees: (a) does not warrant or represent the origin, validity, accuracy, completeness or reliability of, or accept any responsibility for errors or omissions in this Information Memorandum; (b) disclaims and excludes all liability for all claims whatever nature (including any claim of negligence) that may arise in any way from or in connection with the provision of this Information Memorandum and any inaccuracy or incompleteness, or any reliance by any person on it; and (c) does not, by this Information Memorandum, provide any recommendation, service or advice. The Company may in its absolute discretion, but without being under an obligation to do so, update, amend or supplement this Information Memorandum or any other information provided to the Recipient. NOTICE TO PROSPECTIVE INVESTORS OUTSIDE AUSTRALIA It is the responsibility of any person wishing to purchase shares in the Company to satisfy himself or herself as to full observance of the laws of any relevant territory outside of Australia in connection with any such purchase, including obtaining any required governmental or other consents or observing any other applicable formalities. No action has been or will be taken to register or qualify the Information Memorandum or otherwise permit the offering or registration of securities in any place outside of Australia.
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INDICATIVE OFFER TIMETABLE POST PRE IPO Opens Closes Project Commencement Proof of Concept Contact June 2011 Will close once fully subscribed June 2011 July 2011 to April 2012 Mr Damian Gill +61 (0)414 630 255 damian.gill@sementis.com.au
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INTRODUCTION
Sementis groundbreaking vaccine technology has the potential to revolutionise the way we look at modern vaccine production. Sementis Copenhagen Vector (SCV) - the new vaccine delivery technology developed by Sementis Pty Ltd promises to help in the development of vaccines that will alleviate the suffering and fear of potentially tens of millions of people in years to come. SCV technology is a unique system engineered to overcome the shortfalls of existing vaccine delivery technologies. The SCV system is in essence a turbocharged bio-vehicle, carrying vaccine antigen payloads to be delivered efficiently and precisely to the immune system. The result opens the door to an extraordinary range of vaccine prototypes. The technology is a package for delivering antigens (genes) from different disease-causing agents directly to the body where the immune system will initiate immunity against the disease-causing agent from which the antigen was taken from. It is a universal backbone technology for delivering vaccines aimed at numerous different disease-causing agents. The initial vaccine development program includes 3 unique vaccines. The first of these developed by Sementis is PHAV (Peanut Hypo-Allergy Vaccine). The SCV technology will deliver a novel peanut antigen to the immune system, encouraging it to switch off the allergic reaction to peanut allergens. This product has the potential to save thousands of lives a year, and eliminate the need for concern in millions of sufferers. PHAV will re-educate the immune system to curtail an allergic response upon exposure to peanuts. For millions of people around the globe a Snickers bar is the equivalent of an unpinned grenade. The reason is, simply, peanuts, a protein source that is utilised in a stunning variety and array of foods and can be deadly, leading to fatal peanut anaphylaxis in children and affected individuals. A peanut allergy vaccine that can cure the allergy is needed even more so now due to the wide spread use of peanut protein in health foods, fast healthy foods, baby milk powder formulations and numerous other food types. Consumption of food that was prepared in proximity to dishes containing trace amounts of peanut protein can be life threatening for those that are allergic, where it can lead to fatal anaphylaxis. Awareness of this condition has grown exponentially over recent years, and features regularly in the media. It is, understandably, a constant source of anxiety for parents, teachers and friends, and those affected by the condition. To date it is estimated that, at the very least, over one per cent of individuals suffer from this allergy; the highest reputable (but still conservative) figure that has been referenced is over five per cent. In practical terms 1.1 per cent prevalence translates into an estimated 7.3 to 10.5 million existing sufferers in the Western world. The second vaccine product in development is for the increasingly prevalent disease Chickungunya, which has potential for global out-reach and that causes a severe form of fever requiring hospitalisation. Also in development is a third vaccine for Q-Fever, a painful bacterial infection carried in livestock, that can be passed onto humans and can be life threatening in the at risk group. Q-Fever is becoming an increasingly important agricultural disease in need of control. For those affected by Q-Fever, the result can be deadly. In summary, Sementis vaccine technology is the use of their proprietary vaccine delivery technology to deliver antigens from different disease-causing agents directly to the bodys immune system to elicit an immunity against the disease-causing agent the antigen was taken from.
OVERVIEW
Sementis is currently looking to raise Au$3,000,000 of seed capital in order to fund the Proof of Concept and Project Preparation. This phase is expected to result in a number of key milestones completed preparing for the initiation of three of its vaccine pipeline items into human clinical trials over a 15-18 month period. Specifically the funding is anticipated to cover the cost of prototype vaccine construction, animal trials and patent protection for the Peanut Hypo-allergy Vaccine (PHAV), the Chikungunya Vaccine (CHIKV), and Q-Fever (QFEV). It will also enable the Sementis Executive Directors to work on the project full time to manage the current project work and prepare for subsequent stages. Sementis will require additional funding in the future for further development, expansion or for capital investment. Both the PHAV and CHIKV prototype gene constructs have now been completed and are ready for prototype vaccine construction. The PHAV and CHIKV form the pilot vaccines for a larger pipeline, alongside QFEV. Other diseases of interest include but are not limited to Alzheimers disease, bee venom, and other allergies including other nuts and shellfish.
THE OFFER
This summary is not intended to provide full information on the shares described in this Information Memorandum. Before deciding to apply for Shares this Information Memorandum and the Constitution of Sementis should be read in their entirety. BACKGROUND Sementis is a start-up company based in Melbourne, Australia, which is developing products as described in this Information Memorandum. Sementis was formed in August 2009 by its co-founders Dr Paul Howley, Travis Molloy and Troy Neilson. CORPORATE STRUCTURE Sementis is an unlisted proprietary limited Australian company Sementis Pty Ltd. The current directors are the founders. It is anticipated that prior to the completion of this capital raising a non-executive director, independent of the founders will join the board of Sementis. DESCRIPTION OF THE OFFER Sementis proposes to raise $3 million through the issue of 37.5 million fully paid ordinary shares in the capital of Sementis at a price per share of $0.08. If there is a shortfall in equity raising, Sementis may seek debt funding to make up the shortfall and payments on that debt will most likely need to be made ahead of any return of equity or profit distributions on ordinary shares. OFFER PERIOD The Offer is open as and from 8:00 am on the date of this Information Memorandum and will close once fully subscribed. These dates are indicative only and Sementis reserves the right to change the dates and times, including to close the offer early without prior notice or to accept applications after the closing date. HOW TO APPLY FOR SHARES The Offer is made only to the addressee of the offer and the addressee may complete the Application Form and subscribe for the Shares offered pursuant to this Offer. To that extent, neither the Information Memorandum nor the Application Form may be handed to any member of the public. To apply for Shares, the Application Form accompanying this Memorandum must be completed and lodged with Sementis. Applications must be for at least 1.25 million Shares ($100,000.00).
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AN APPLICATION FORM OF A 1. Sophisticated investor must be accompanied by a certificate issued by a qualified accountant no more than 6 months ago certifying that the applicant: The applicant has net assets of at least $2.5 million; or Has received gross income for each of the last 2 financial years of at least $250,000 per year. Where the sophisticated investor applicant is a company or a trust, such certificate must be issued and relate to the individual controlling such company/trust. 2. Investor located outside of Australia, must be accompanied by written advice from its professional legal advisors (to Sementis absolute satisfaction) that confirms that it is lawful in the place in which the intending investor resides and comes into possession of this document: or Sementis to make an invitation and an offer pursuant to this Information Memorandum and that the securities offered pursuant F to this Information Memorandum are done so in compliance with the applicable laws (including securities laws) of such place; For such intending investor to receive the Information Memorandum and securities offered pursuant to this Information Memorandum; either the Information Memorandum nor securities offered pursuant to this Information Memorandum need to be registered in the N place in which they are to be received; and o clearances are required from any securities commission or any other governmental or regulatory body for the purposes of making N or receiving the Information Memorandum or the securities offered pursuant to this Information Memorandum.
CAPITAL STRUCTURE The likely capital structure after completion of the capital raising is as follows: Number of existing shares on issue (all held by related entities of the founders) Number of new shares offered under this Information Memorandum Number of shares on issue after placement Number of options on issue after placement REFUNDS Until Shares are allotted, application monies will be held on trust for the applicant. If you are not allocated any Shares or you are allocated fewer Shares than the number you applied for, you will be sent a refund cheque as soon as practicable after the conclusion of the offer. No interest will be payable on application monies. If the offer does not proceed for any reason at all applicants will have their application monies refunded to them (without interest). Successful applicants will be notified in writing of the number of Shares allocated to them as soon as possible following the allocation. RIGHTS ATTACHING TO SHARES Rights attaching to the Shares are determined by the Constitution of Sementis, the Corporations Act 2001 (Cth) and general law. The Constitution is available for inspection on request by prospective investors at Sementis registered office, during business hours. EXPENDITURE BREAK-DOWN It is anticipated that the seed capital raised will be sufficient in order to be used to: 1. Complete animal trials for the PHAV, QFEV, and CHIKV in order to enter Toxicollogy and Human Clinical Trials 2. Employ the Sementis Executive Directors (Dr Paul Howley, Travis Molloy and Troy Neilson) for 15-18 months in order to, amongst other things: Project manage the development of the SCV, PHAV, QFEV & CHIKV; Undertake detailed planning for the next round of funding; Make contact with Contract Research Organisations for subsequent project phases and obtain quotes and indicative timings; and Plan and prepare for the establishment of Sementis premises. 70,000,000 37,500,000 107,500,000 3,000,000
Application Forms and monies are to be collected by Sementis legal advisors, Gadens Lawyers Melbourne, on behalf of the company. Accordingly, a duly completed Acceptance Form, should be accompanied by a cheque in Australian dollars, crossed not negotiable and made payable to Gadens Lawyers Trust Account A completed Application Form (together with Investor Confirmation Letter and/or Qualified Accountant Form)) and accompanying cheques should be returned as soon as possible after the offer opens by mail to: Sementis Pty Ltd C/- Gadens Lawyers GPO Box 48 Melbourne VIC 3001, Australia ALLOCATION Sementis reserves the right to reject any application (including where an application has not been completed correctly) or to allocate to any applicant fewer Shares than the number of Shares that the applicant has applied for. If the total number of applications for Shares exceeds the total number of Shares on offer pursuant to this Information Memorandum, application may be scaled back by Sementis on a pro-rata basis. Successful applicants will be notified in writing of the number of Shares allocated to them as soon as possible following the allocation.
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THE SCV SYSTEM IS IN ESSENCE A TURBO CHARGED BIO-VEHICLE, CARRYING VACCINE ANTIGEN PAYLOADS TO BE DELIVERED EFFICIENTLY AND PRECISELY TO THE IMMUNE SYSTEM.
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COMPETITOR ANALYSIS
Current Competitors to the PHAV are virtually non-existent, in that there is no therapy on the market that offers any relief or preventative protection from peanut allergy. Currently management of peanut allergy is restricted to the following three approaches: 1. Avoidance of peanuts through often unrealistic dietary constraints. Sufferers must carefully scrutinise ingredient labels of food products and avoid high-risk foods. Despite a sufferers best efforts, it has been estimated that sufferers will have an allergic reaction from accidental ingestion of peanut contaminated food once every three years 2. Self Diagnosis, where the sufferer must learn to identify the early stages of an accidental ingestion and intervene. Clearly this presents problems for young children causing great anxiety for parents 3. Self Treatment and Hospitalisation; Sufferers carry self-injectable epinephrine based delivery devices called Epipens, which contain adrenaline, for use in the case of an unanticipated reaction due to an exposure to treat serious symptoms, such as attempting to keep the airways open. Regardless of any self treatment, allergic reactions will also require hospitalisation to prevent secondary reactions The primary weakness of current competing therapies is their reactionary nature; a sufferer must be actually experiencing an allergic reaction before treatment can begin. A preventative therapy such as the PHAV would undoubtedly be preferable to a peanut allergy sufferer if it were available. Future Competitors are currently under various degrees of development however, as with the current alternatives, they are likely to be out-classed by the PHAV: EPITOPE APPROACH This vaccination approach has featured recently in the media and in Sementis opinion represents what is effectively research phase into peanut allergy. The epitope approach involves searching for and administering specific and small sections of peanut proteins that even if successful wouldnt represent a holistic solution. A successful outcome would only address two of the eight possible peanut allergens. Furthermore the effectiveness would be restricted to a small population that the epitope is workable with. INCREMENTAL TOLERANCE APPROACH This approach involves administering minute and increasing doses of peanut protein, in order to induce tolerance in a sufferer. This method is dangerous and time-consuming as the tolerance produced is rarely more that for a small quantity of nuts and at the threshold an anaphylaxis event will still occur. ANTI-IgE THERAPY This therapy is under development by Genetech Inc, USA (www.gene.com) to specifically treat allergic conditions such as asthma or hayfever. They are also claiming that it is applicable to peanut allergy. An immune therapy designed to neutralise the antibody IgE which is a critical aspect of the TH2 (allergic) immune response. It is an ongoing therapy (comparable to life-long insulin injections for diabetics) which if discontinued would remove the protection from peanut allergy. This approach can be viewed as somewhat dangerous in that it completely disarms theTH2 component of the immune system which is still an important part of the bodys immune defenses. It is possible that antiIgE therapy would leave the patient open to other parasitic infections. Development of this treatment with respect to peanut allergy has been put on hold in Phase II trials due to adverse reactions in patients.
LUNG CANCER DIABETES PEANUT ALLERGY ALzHEIMERS GLOBAL HIV MULTIPLE SCLEROSIS 0% 1% 1.5% 2% 2.5% 3% 3.5%
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IMMUNOSTIMULATORY SEQUENCE THERAPY This is a peanut specific therapy under development by Dynavax Technologies, USA (www.dynavax.com). It is a vaccine consisting of a single peanut protein allergen linked to short synthetic DNA molecules named ISS (Immunostimulatory Sequences) designed to elicit a TH1(non allergic) immune response and therefore eliminate the TH2 (allergic) immune response. This peanut protein-ISS approach is not as direct nor effective as viral vector vaccines (such as the vaccine proposed in this information memorandum) at promoting TH1 (non-allergic) immune responses and could be mopped up by pre-existing IgE antibodies (prime mediators of allergic reactions). The approach addresses only one of several peanut proteins responsible for peanut allergy. PEANUT PROTEIN AND BACTERIA MIX VACCINE This is a vaccine treatment that is under development by Stanford University of Medicine, USA to specifically target peanut allergy. It is a vaccine consisting of heat killed bacteria (which would normally elicit a TH1 non-allergic immune response) and peanut protein. The concept is that the immune system will, by association, mount a TH1 (non-allergic) immune response on peanut protein encountered with the bacteria. This therapys technology can be considered a more basic version of the technology to be employed by Sementis. Positive results have been observed in animals, however it has yet to be tested in humans at this stage. The therapy is currently in pre-clinical development and if effective, would reach the market in 10 to 12 years.
REVENUE SCENARIO
MARKET OVERVIEW Studies by Kalorama and RNCOS have both stated that the vaccine segment is now one of the most lucrative pharmaceutical markets, and will emerge as one of the fastest growing therapy areas: tandard penetration figures regularly cite between 20% and 60% penetration, with new, novel products, in unmet markets, claiming S market shares between 50% and 80%, with products that dont have the prevalence of peanut allergy dvances in immunology, increasing emphasis on preventative medicine, and the shift from small-molecule drug research to discovering A novel and orphan biologics are contributing to the growth of the vaccine market The global vaccine market is expected to reach USD$34 billion by 2012, with compound growth expected to be 14%.
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THE GLOBAL VACCINE MARKET IS EXPECTED TO REACH USD$34 BILLION BY THE YEAR 2012
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PRICING MODEL
One of the best procedures to profile an appropriate pricing point for the PHAV product, is to look at the cost per cure/dose of similar vaccines currently on the market. Three products currently on the market are listed below: COMPARATIVE VACCINE COST PER DOSE Merck & Co GSK Alk-Abello Gardasil Cervarix Alutard SQ USD$450 per series of 3 doses which is expected to provide protection for up to 4 years. USD$402 per series of 3 which is expected to provide protection for up to 4 years USD$359 for a 3 month supply, with a life long dependency to avoid future exposure issues
The first therapeutic Peanut Allergy vaccine treatment will have virtually exclusive access to the pool of 7 to 8 million existing sufferers worldwide who would be able to purchase the vaccine. This will present a major barrier to entry for competing therapies which are trailing significantly in development. This secondary market situation would only have access to a severely diminshed sales base, meaning the chances of achieving a return on their own development costs would be significantly lower. Taking into consideration the information put forward, conservative figures to come to a valuation for the PHAV product. The valuation model proposed is laid out below: PRICING MODEL 7,755,000 people in the developed world currently suffer from peanut allergy Conservative one off, single dose price of USD$750 per dose Conservative market penetration of 50% - 3,877,500 sufferers Conservative market share of 50% in an unmet market - 1,938,750 sufferers Product revenue of USD$1.454 Billion in the first year Further gain of 25% market share over the following two years equating to USD$1.454 Billion Conservative 3 year sales of USD$2.908 Billion
7,755,000 PEOPLE IN THE DEVELOPED WORLD CURRENTLY SUFFER FROM PEANUT ALLERGY
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a dose, the first five market for Sementis QFEV could be in the billions.
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73%
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ACCORDING TO THE AUSTRALIAN Q FEVER REGISTER OVER 77,000 Q FEVER VACCINATIONS HAVE BEEN DELIVERED IN AUSTRALIA ALONE SINCE 2001.
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QFEV CONSTRUCTION
CHIKV CONSTRUCTION
PHAV CONSTRUCTION
QFEV AC
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INVESTMENT RISKS
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TRADE SECRETS Sementis will rely heavily on the know how and expertise developed by Dr. Paul Howley and its other key personnel and the trade secrets that it develops before filing any respective patent applications. The protective measures that Sementis employs may not provide adequate protection for this know how, expertise and trade secrets. This could erode Sementis competitive advantage and materially harm its business. Sementis cannot be certain that its competitors will not independently develop the same or similar technologies or vaccines on their own, gain access to this know how, expertise and trade secrets or disclose such technologies, or that Sementis will be able to meaningfully protect its trade secrets and unpatented know-how and keep them secret. PATENTS Sementis will rely (in part only) for its success on its ability to obtain and maintain patent protection for its SCV technology and its intended vaccines. Sementis has provisional patents in place for both the SCV and PHAV products The prospect of attaining patent protection is highly complex and uncertain. Uncertainties include: atent applications may not proceed to issued patents and, if issued, those patents may not be of commercial benefit to Sementis, or P may not afford Sementis adequate protection from competing products; ementis cannot be certain that it is the first to make the inventions covered by the pending patent applications or that its patent S applications for such inventions were the first to be filed; ven if Sementis succeeds in obtaining patent protection, the nature of the patents is such that it remains open to competitors of E Sementis (which are numerous and well funded) to design competing products that do not infringe Sementis patents; and ven if Sementis succeeds in obtaining patent protection for its products, its patents could be partially or wholly invalidated following E challenges by third parties. Patent protection does not extend to any country in respect of which a patent has not been granted. Accordingly in those countries where a patent has not been applied for, or where a patent application does not mature to grant, Sementis ability to enforce its intellectual property rights will be reduced. INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY If a third party accuses Sementis of infringing its intellectual property rights, or if a third party commences litigation against Sementis for the infringement of patent or other intellectual property rights, Sementis may incur significant costs in defending such an action, regardless of whether it ultimately prevails. Patent litigation in the biotechnology industry is typically very expensive. Parties making claims against Sementis may be able to obtain injunctive or other equitable relief that could prevent Sementis from further developing its technology and vaccines or otherwise commercialising its products. A successful infringement claim against Sementis is likely to have a material adverse impact on Sementis. SUFFICIENCY OF FUNDING The funding proposal set forth in this Information Memorandum is based on Sementis estimated expenditures for approximately 12 months in order to complete animal trials for the PHAV, QFEV and CHIKV so as to enter toxicology and human clinical trials, and to also employ the three executive founding directors. These expenditures are best estimates only and it may be necessary for Sementis to raise additional funds to complete this stage of development. Sementis will need to raise additional funds to finance the complete development and commercialisation of its products, and to attain its other long-term objectives. In order to do so, it is highly likely that Sementis will need to issue additional securities which may rank ahead with, or equal with, or behind the Shares, as to dividends and return on capital, which is likely to also have a dilatory effect on existing shareholdings at that time. Sementis ability to raise additional funds will be subject to, among other things, factors beyond the control of Sementis and its directors. These include cyclical factors affecting the economy generally. Sementis can give no assurance that future funds can be raised by Sementis or on sufficiently favourable terms.
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COMPETITION The biotechnology industry is highly competitive and include companies with significantly greater financial, technical, human, research and development and marketing resources than Sementis. Numerous entities around the world compete with Sementis in attempting to discover, validate and commercialise vaccines and vaccine delivery technology. Sementis competitors may discover and develop either products in advance of Sementis or products that are more effective than those developed by Sementis. As a consequence, Sementis future technologies and products may become obsolete or uncompetitive. REGULATORY The biotechnology industry is heavily regulated by domestic and foreign government organisations, such as the TGA in Australia and the FDA in the United States. Sementis technology platform and vaccines are subject to regulatory regimes and approvals that may change without notice. This could seriously affect Sementis ability to distribute the product in the relevant jurisdiction and adversely affect Sementis and could cause Sementis operations and product development to fluctuate significantly. CLINICAL DEVELOPMENT RISK Animal and human clinical trials are very expensive and difficult to design and implement, and are subject to strict regulatory requirements. Clinical trials of Sementis technology and vaccines could take several years to complete. Clinical development of the technology and/ or vaccines may fail for a number of reasons including lack of efficacy, toxicity or adverse side effects. Failure can occur at any stage of the trials, requiring Sementis to abandon or repeat clinical trials. Sementis or the relevant regulatory authorities may suspend Sementis clinical trials at any time if it appears that the trials are exposing participants to unacceptable health risks. SMALL COMPANY AND ILLIQUID TRADING Sementis has no track record of operations. Sementis current position results solely from the initial investment and contributions from its founders. At this point in time Sementis does not earn any revenue from operations. The ability to do so is dependent on the successful development and commercialisation of Sementis technology and vaccines. Shares will rank equally with other ordinary shares on issue in Sementis. Accordingly, their value will depend on the market price of the Shares at any given time. There is a risk that the value of Share will fall below their issue price. Investors who wish to sell their Shares may be unable to do so at an acceptable price, or at all, depending on the market for Shares (if any). Since Shares in Sementis are not traded on a recognised securities exchange, the Shares are illiquid and there is no guarantee that they could be traded. The Shares are, without limitation, also subject to pre-emptive rights and drag and tag along options pursuant to the Constitution of Sementis, which may limit the ability of a shareholder to freely dispose of or retain their Shares. GENERAL ECONOMIC CONDITIONS A deterioration in Australian and/or world economic conditions could be expected to adversely affect development by Sementis of its technology and vaccines, the value and price of Shares and Sementis ability to operate. FORCE MAjEURE Force majeure is a term that is used to refer to an event beyond the control of Sementis. These include acts of God, terrorism, fire, flood, earthquakes, war and strikes. To the extent that force majeure events occur, they may adversely affect Sementis development of its technology and vaccines, the value and price of Shares and Sementis ability to operate.
ADDITIONAL INFORMATION
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APPLICATION FORM
A INCORPORATION Sementis was incorporated on August 2009 and is an unlisted proprietary Australian company FEES A fee of 6% of money raised will be paid in cash as a success fee. LITIGATION To the best of the directors knowledge, there is no litigation of any nature or threatened which may affect Sementis or its activities. TAXATION Sementis has not sought tax advice in relation to the impact of the Offer on investors. This Information Memorandum is not intended to provide advice to individuals regarding the tax implications of becoming a holder of Shares. Intending investors should seek independent advice in relation to their individual taxation position before applying for Shares. ENQUIRIES IN RELATION TO THE OFFER This Information Memorandum provides information for potential investors in Sementis, and should be read in its entirety. If, after reading this Information Memorandum, you have any questions about any aspect of an investment in Sementis, please contact your stockbroker, accountant or independent financial adviser. HOW TO APPLY Applications for Shares under the Offer can only be made on the Application Form attached to this Information Memorandum. The Application Form must be completed in accordance with the instructions set out in the Information Memorandum. Payment must be by way of cheque or bank draft drawn and payable at an Australian bank. Cheques must be made payable to: Gadens Lawyers Trust Account and crossed not negotiable. All share applications together with the accompanying cheque and other requisite application documentation should be forwarded to: Sementis Pty Ltd, C/O Gadens Lawyers Gadens Lawyers GPO Box 48, Melbourne VIC 3001, Australia. DESPATCH OF SHARE CERTIFICATES Successful applicants will be forwarded their share certificates setting out their allotted shareholding as soon as possible after the allotment of shares. G
Email Address Telephone Number - Business Hours / After Hours (please circle) Mobile Numer Number of shares in Sementis Pty Ltd at $0.08 per share or such lesser number of shares that may be allocated to me/us.
Cheque details - please enter details of the cheque(s) that accompany this application
Drawer BSB Number Account Number Amount of cheque
Drawer
BSB Number
Account Number
Amount of cheque
Applicant Details
Title Given Name(s) Surname or Company Name
Postal Address
Unit Street Number Street Name or PO Box / Other Information
State
Postcode
Contact Details
Contact Name
Applicant Two
APPLICATION FORM
SEMENTIS PTY LTD ACN 138 550 811 This offer opens June 2011 and will close once fully subscribed or such other date the Companys Board decides. This application is lodged on and pursuant to the terms acknowledged on the Declaration which accompanies this form. By completing and returning this application form: he Applicant agrees to be bound by the constitution of the Company and requests that its name and address as shown below be T registered; and The Applicant warrants to the Company that the Applicant is a person: - To whom an offer of shares can be made without disclosure in accordance with the Corporations Act. - Who is otherwise satisfied that they may lawfully invest pursuant to the Offer.
DECLARATION
PLEASE TICK THE RELEVANT BOX(ES) BELOW AS THEY APPLY TO YOU.
You will not be issued with any shares under the Offer unless you tick at least one of the boxes below and provide the Company with any certificates, acknowledgments or other evidence that the Company needs in order to ensure that you do not require disclosure in respect of the Offer under Chapter 6D.2 of the Corporations Act.
AUSTRALIAN INVESTORS
I/we hereby confirm and warrant that: I/we have net assets of at least $2.5 million and attach a certificate(s) issued by a qualified accountant no more than six months ago certifying that this is the case or the Applicant is a company or trust which controls such a person. I/we have each had a gross income for each of the last two financial years of at least $250,000 per annum and attach a certificate(s) issued by a qualified accountant(s) no more than 6 months ago, certifying that this is the case or the Applicant is a company or trust which controls such a person. I/we qualify as a professional investor under section 708(11) of the Corporations Act. I am/we are each a person who controls gross assets of at least $10 million (including any assets held by an associate or under a trust that the person manages). I am/we are each a senior manager of the Company or related body or their spouse, parent, child, brother or sister or a body corporate controlled by any of these people/bodies.
FOREIGN INVESTORS
I am/we are foreign investors (ie. Ordinarily residing outside of Australia) and attach written legal advice from my/our professional legal advisors confirming the lawfulness of those matters described in page 5 of the Information Memorandum.
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FURTHER DECLARATIONS
1. All details in this Application Form are true and correct. 2. I/we have read the correspondence to which this Application Form was attached and have had the opportunity to consult my/our advisers on the Offer. 3. In the case of joint applicants: we agree that the shares will be held as joint tenants. 4. If this Application is signed under Power of Attorney: I have not received notice of revocation of that power (a certified copy of the Power of Attorney should be submitted with this Application Form). 5. If signing as sole signatory on behalf of a company: I am signing as sole director and sole secretary of the company. 6. If investing as a trustee: I/we are acting in accordance with the powers granted under the trust deed of the trust and all applicable laws. 7. I/we hereby apply for the number of shares shown in his Application Form on the terms and conditions set out in the Information Memorandum. 8. I/we agree to be bound by the terms and conditions of the constitution of the Company as may be amended from time to time. 9. I/we understand that this Application Form may not be processed if it is not completed fully (however, tax file number information is not compulsory). 10. I/we understand that the Company may reject this application at its discretion or may issue me/us some but not all of the shares applied. H Signature(s)
Applicant One / Director / Secretary Print Name Date (DD / MM / YYYY)
FOR MILLIONS OF PEOPLE AROUND THE GLOBE A SNICKERS BAR IS THE EQUIVALENT OF AN UNPINNED GRENADE.
Print Name
CORRECT FORM OF REGISTRATION Mr Andrew Brett Smith Mr Andrew Brett Smith & Ms Diane Elizabeth Smith ABC Pty Ltd Mrs Diane Elizabeth Smith <Diane Smith Family A/C> Mr Andrew Brett Smith & Ms Diane Elizabeth Smith <Est John Smith A/C> Mr Andrew Brett Smith <Brian Smith A/C> Mr Andrew Brett Smith & Mr John Michael Smith <Andrew Smith and Son A/C> Mr Andrew Brett Smith <ABC Tennis Association A/C> Jane Smith Pty Ltd <Super Fund A/C>
INCORRECT FORM OF REGISTRATION A B Smith Andrew Smith & Diane Smith ABC Pty Ltd or ABC Co Diane Smith Family Trust Estate of late John Smith or John Smith Deceased Master Andrew Smith
SEMENTIS
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FOR THE CAPITAL RAISING OF UP TO 37.5 MILLION SHARES AT 8 CENTS PER SHARE TO RAISE 3 MILLION DOLLARS THE SEMENTIS INFORMATION MEMORANDUM IS ISSUED BY SEMENTIS PTY LTD ACN 138 550 811 FOR FURTHER INFORMATION PLEASE CONTACT: DAMIAN GILL MANAGER CORPORATE AFFAIRS TEL +61 (0)414 630 255 EMAIL DAMIAN.GILL@SEMENTIS.COM.AU