The Rights Issue in brief

• The subscription price has been set to SEK 4.90 per Unit, which corresponds to SEK 4.90 per share. The warrants of series TO 8 are issued free of charge. Upon full subscription in the Rights Issue, the Company will receive initial proceeds of approximately SEK 102.4 million before deduction of issue costs. If all warrants of series TO 8 issued in the Rights Issue are exercised for the subscription of shares at an exercise price corresponding to the subscription price in the Rights Issue, the Company will receive additional proceeds of approximately SEK 102.4 million before deduction of issue costs.
• Upon full subscription in the Rights Issue, the net proceeds from the Rights Issue will be used to (i) advance the breast cancer vaccine candidate ES2B-C001, (ii) internal technology development and (iii) pipeline expansion, incl. exploration of value-added vaccine partnerships.
• Existing shareholders in ExpreS[2]ion as of the record date, 27 March 2023, will receive one (1) unit right for each existing share. Nine (9) unit rights entitle to subscription of five (5) Units in the Rights Issue.
• In total, a maximum of 20,892,660 Units will be issued. Each Unit consists of one (1) share and one (1) warrant of series TO 8, which means that a maximum of 20,892,660 shares and 20,892,660 warrants of series TO 8 will be issued.
• The subscription period runs from and including 29 March 2023 up until and including 12 April 2023.
• In connection with the Rights Issue, the Company has received subscription commitments amounting to approximately SEK 0.8 million, corresponding to approximately 0.8 percent of the Rights Issue, from several members of the Company's Board of Directors and management, among others the Company's CEO Bent U. Frandsen. In addition, external investors have provided guarantee commitments in accordance with customary terms for a total of approximately SEK 50.5 million, corresponding to approximately 49.3 percent of the Rights Issue. Thus, the Company has obtained subscription and guarantee commitments of up to a total of approximately SEK 51.3 million, corresponding to approximately 50 percent of the Rights Issue.
• In connection with the Rights Issue, all members of the Company's Board of Directors and management with shareholdings in ExpreS[2]ion have undertaken towards Vator Securities AB, subject to customary exceptions, not to sell or otherwise transfer financial instruments (does not include financial instruments subscribed within the scope of the Rights Issue or thereafter) without first, in each separate case, ascertain a written approval from Vator Securities AB. The lock-up period lasts for a period of 90 days following the announcement of the outcome of the Rights Issue.
• The Board of Directors' resolution on the Rights Issue is subject to subsequent approval at an extraordinary general meeting in the Company on 23 March 2023. Notice to the extraordinary general meeting will be published through a separate press release. The Company intends to publish the prospectus regarding the Rights Issue on or around 27 March 2023.

Bent U. Frandsen, CEO in ExpreS[2]ion comments:

"In 2020, we transformed the Company into a pipeline driven biotech company and have since embarked on a novel COVID-19 vaccine and a unique HER2 focused therapeutic breast cancer vaccine. The Company has proven its capability in advancing high value assets through development, currently best evidenced by the COVID-19 vaccine in Phase III clinical phase sponsored by the exclusive licensee Bavarian Nordic. To be able to continue building value in the pipeline by completing the preclinical development phase for the HER2 breast cancer vaccine all through the preclinical phase, continuing to build on our technological advantages, and securing working capital to explore value-added vaccine partnerships, we now aim to raise new equity through a rights issue. Looking forward, we are excited to further de-risk the pipeline portfolio and thus build value for our shareholders. On behalf of the board, management and our employees, I am grateful for our investors who support us on these endeavours to create novel vaccines to combat devastating diseases."

Background and rationale

ExpreS[2]ion is a biotechnology company that develops vaccines based on complex proteins targeting infectious diseases and cancer. The Company was founded on the realisation that to produce the complex proteins needed for the biological drugs and vaccines of the future, a new protein expression system would be needed. The Company thereby developed the ExpreS2 recombinant protein expression platform to support all phases of drug discovery and research & development (R&D) as well as GMP manufacturing for clinical studies. The ExpreS2 platform is primarily used for developing the Company's pipeline of preventive and therapeutic vaccine products, which currently consists of vaccine candidates in five disease areas developed by ExpreS[2]ion and/or in collaboration with partners. Additionally, ExpreS[2]ion outlicenses the platform to research institutes and pharmaceutical companies, which by their own or in cooperation with the Company, develop biopharmaceutical drugs and vaccines.

The global licensee partner Bavarian Nordic, a fully integrated vaccines company, initiated a Phase III clinical trial with ABNCoV2 in the third quarter of 2022. Positive Phase II data were announced in the first quarter of 2022. Results confirmed the candidate's ability to boost neutralizing antibodies to levels reported to be highly efficacious against SARS-CoV-2. The data demonstrated positive results across the major COVID-19 virus variants. In October 2022, Bavarian Nordic announced 6-months durability data showing continued high level of antibodies (>90%) also against variants of concern. Compared to the data published for mRNA vaccines, the antibody decay appears less sharp, indicating a potentially longer duration of protection across variants of concern. Top-line data from the Phase III clinical trial of the ABNCoV2 is anticipated around mid-2023. ExpreS[2]ion is entitled to EUR 2 million in milestone payments and lower double-digit percentage of the 34-%-owned associated company AdaptVac ApS' royalties. AdaptVac is entitled to up to EUR 136 million in development and sales milestones and single- to double-digit-percentage of royalties of Bavarian Nordic's revenues from ABNCoV2. ExpreS[2]ion could potentially monetize its 34% stake in AdaptVac ApS to extract value from AdaptVac's proceeds from ABNCoV2 through e.g., dividend pay-out, subject to approval by appropriate parties, including AdaptVac's Board of Directors.

ExpreS[2]ion's vaccine candidate targeting HER2-positive breast cancer, ES2B-C001, is expected to file for clinical Phase I trials in the beginning of 2024 after preclinical safety study read-out towards the end of 2023, with first-in human trial envisioned to commence in 2024. Positive preclinical top-line data was announced in December 2021 and January 2022 demonstrating preclinical Proof-of-Concept (PoC). Further preclinical data were announced in May 2022. ExpreS[2]ion targets partnerships for further development, decreasing development costs while maintaining potential milestone and royalty payments.

ExpreS[2]ion's pipeline also includes vaccine candidates against influenza in preclinical phase and five malaria projects with the most advanced malaria vaccine candidate in Phase Ib/IIa. The influenza and malaria candidates are developed by collaboration partners where antigens are produced using the ExpreS2 platform. In December 2022, ExpreS[2]ion signed a Vaccine Discovery Collaboration Agreement with Evaxion Biotech A/S for joint development of a novel cytomegalovirus (CMV) vaccine candidate, which ExpreS[2]ion has first right to in-license in 2025. Collaboration is de-risked through a fifty-fifty cost sharing set-up.

The Company's Board of Directors believes that the existing working capital is insufficient to meet its current needs for the next 12-month period. The Board of Directors therefore decided on 3 March 2023 to carry out the Rights Issue, subject to a subsequent approval at an extraordinary general meeting in the Company on 23 March 2023, in order to strengthen the Company's financial position and to be able to implement the Company's business plan and strategy.

Upon full subscription in the Rights Issue, the Company will receive initial proceeds of approximately SEK 102.4 million before deduction of issue costs. Upon full subscription in the Rights Issue, the net proceeds from the Rights Issue will be used to:

• Advance the breast cancer vaccine candidate ES2B-C001
• Internal technology development, incl. exploration of CMV vaccine candidates
• Pipeline expansion, incl. exploration of value-added vaccine partnerships

If all warrants of series TO 8 issued in the Rights Issue are exercised for the subscription of shares at an exercise price corresponding to the subscription price in the Rights Issue, the Company will receive additional proceeds of approximately SEK 102.4 million before deduction of issue costs, which will be used for the same activities as above.

Terms of the Rights Issue

The Board of Directors of the Company has resolved, subject to a subsequent approval at an extraordinary general meeting in the Company on 23 March 2023, to carry out the Rights Issue. In total, a maximum of 20,892,660 Units will be issued. Each Unit consists of one (1) share and one (1) warrant series TO 8, which means that a maximum of 20,892,660 shares and 20,892,660 warrants of series TO 8 will be issued.

Existing shareholders in ExpreS[2]ion as of the record date, 27 March 2023, will receive one (1) unit right for each existing share. Nine (9) unit rights entitle to subscription of five (5) Units in the Rights Issue. The subscription price has been set to SEK 4.90 per Unit, which corresponds to SEK 4.90 per share. The warrants are issued free of charge.

In the event all Units in the Rights Issue are not subscribed for with the support of unit rights, the Board of Directors shall, within the framework of the Rights Issue's maximum amount, resolve on the allotment of Units subscribed for without the support of unit rights. In case of over-subscription, allotment shall be made in according to the following principles:

• Firstly, Units shall be allotted to those who have subscribed for Units with the support of unit rights (regardless of whether they were shareholders on the Record Date or not), pro rata in relation to how many Units each subscriber subscribed for with the support of unit rights, and to the extent that this is not possible, by drawing of lots.
• Secondly, if all Units are not allotted according to the above, allotment shall be made to those how have notified interest to subscribe for Units without preferential rights, and in case of oversubscription, in relation to the number of Units set out in the respective subscription notifications, and to the extent this is not possible, by drawing of lots.
• Thirdly and lastly, allotment of Units subscribed for without the support of unit rights shall be made to those who have entered into guarantee commitments in their capacity as guarantors for the Rights Issue. In the event allotment to these cannot be fully made, allotment shall be made in relation to the amount each of the guarantors have underwritten, and to the extent this is not possible, by drawing of lots.

Terms and conditions for warrants of series TO 8

One (1) warrant of series TO 8 gives the holder the right to subscribe for one (1) new share in the Company against a cash payment amounting to 70 percent of the volume-weighted average price of the Company's share during the period from and including 21 August 2023 up to and including 1 September 2023, but not less than quota value of the share. Warrants of series TO 8 may be exercised during the period from and including 7 September 2023 up to and including 21 September. The warrants are intended to be admitted to trading on Nasdaq First North Growth Market after final registration of the Rights Issue with the Swedish Companies Registration Office.

Change of share capital and number of shares as well as dilution

Through the Rights Issue, the number of shares in ExpreS[2]ion will increase by a maximum of 20,892,660 shares, from 37,606,796 shares to 58,499,456 shares and the share capital will increase by a maximum of SEK 2,321,406.670878 from SEK 4,178,532.896470 to SEK 6,499,939.567348. This means that existing shareholders who choose not to participate in the Rights Issue will, if fully subscribed, experience a dilution corresponding to approximately 35.7 percent of the total number of shares and votes in the Company following the Rights Issue. If all warrants of series TO 8 are exercised in full for subscription of new shares in the Company, the number of shares will increase with an additional 20,892,660 shares to 79,392,116 shares in total and the share capital will increase with an additional SEK 2,321,406.670878 to SEK 8,821,346.238226. This corresponds to an additional dilution effect from the warrants of up to approximately 35.7 percent. The total dilution effect in the event the Rights Issue and the warrants are subscribed or exercised, respectively, in full, amounts to approximately 52.6 percent.

Subscription and guarantee commitments

In connection with the Rights Issue, the Company has received subscription commitments amounting to approximately SEK 0.8 million, corresponding to approximately 0.8 percent of the Rights Issue, from several members of the Company's Board of Directors and management, among others the Company's CEO Bent U. Frandsen. In addition, external investors have provided guarantee commitments in accordance with customary terms for a total of approximately SEK 50.5 million, corresponding to approximately 49.3 percent of the Rights Issue. Thus, the Company has obtained subscription and guarantee commitments of up to a total of approximately SEK 51.3 million, corresponding to approximately 50 percent of the Rights Issue.

No compensation is paid for submitted subscription commitments. For guarantee commitments, a guarantee compensation is paid in the form of cash amounting to twelve (12) percent of the guaranteed amount or alternatively fourteen (14) percent of the guaranteed amount in the form of newly issued Units in the Company. If the guarantee compensation is to be paid in Units, the new shares and warrants are intended to be issued following a board resolution based on the authorization to issue shares granted by the annual general meeting 2022 and at a subscription price corresponding to the volume-weighted average price of the Company's share on Nasdaq Stockholm during the subscription period for the Rights Issue, however not lower than the subscription price in the Rights Issue, and provided that the subscription price is deemed by the Company to correspond to market terms. The subscription and guarantee commitments are not secured through bank guarantees, restricted funds, pledged assets or similar arrangements.

Preliminary timetable for the Rights Issue

Last day of trading in shares 23 March 2023
including right to receive unit
rights
First day of trading in shares 24 March 2023
excluding right to receive unit
rights
Record date for participation in 27 March 2023
the Rights Issue
Prospectus is published On or around 27 March 2023
Subscription period 29 March - 12 April 2023
Trading in unit rights 29 March - 5 April 2023
Trading in BTUs (paid subscribed 29 March 2023 until the Rights
units) Issue is registered with SCRO
Announcement of final outcome in On or around 14 April 2023
the Rights Issue

Lock-up undertakings

In connection with the Rights Issue, all members of the Company's Board of Directors and management with shareholdings in ExpreS[2]ion have undertaken towards Vator Securities AB, subject to customary exceptions, not to sell or otherwise transfer financial instruments (does not include financial instruments subscribed within the scope of the Rights Issue or thereafter) without first, in each separate case, ascertain a written approval from Vator Securities AB. The lock-up period lasts for a period of 90 days following the announcement of the outcome of the Rights Issue.

Prospectus

Full terms and conditions and instructions for the Rights Issue, as well as other information about the Company and information about subscription and guarantee commitments will be presented in the prospectus that the Company is expected to publish on or around 27 March 2023, available on ExpreS[2]ion's website (www.expres2ionbio.com).

Advisors

Vator Securities acts as financial advisor and issuing agent to the Company in connection with the Rights Issue. Advokatfirman Schjødt is the Company's legal advisor in connection with the Rights Issue.

Certified Adviser

Svensk Kapitalmarknadsgranskning AB

Telefon: +46 11 32 30 732

E-post: ca@skmg.se
 

IMPORTANT INFORMATION

The release, announcement or distribution of this press release may, in certain jurisdictions, be subject to restrictions. The recipients of this press release in jurisdictions where this press release has been published or distributed shall inform themselves of and follow such restrictions. The recipient of this press release is responsible for using this press release, and the information contained herein, in accordance with applicable rules in each jurisdiction. This press release does not constitute an offer, or a solicitation of any offer, to buy or subscribe for any securities in ExpreS[2]ion in any jurisdiction, neither from ExpreS[2]ion nor from someone else.

This announcement does not identify or suggest, or purport to identify or suggest, the risks (direct or indirect) that may be associated with an investment in the Company. The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. Vator Securities is acting for ExpreS[2]ion in connection with the Rights Issue and no one else and will not be responsible to anyone other than ExpreS[2]ion for providing the protections afforded to its clients nor for giving advice in relation to the Rights Issue or any other matter referred to herein.

This press release does not constitute or form part of an offer or solicitation to purchase or subscribe for securities in the United States. The securities referred to herein may not be sold in the United States absent registration or an exemption from registration under the US Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold within the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. There is no intention to register any securities referred to herein in the United States or to make a public Rights Issue of the securities in the United States. The information in this press release may not be announced, published, copied, reproduced or distributed, directly or indirectly, in whole or in part, within or into the Unites States, Australia, Canada, Hong Kong, Japan, New Zeeland, Singapore, South Africa or in any other jurisdiction where such announcement, publication or distribution of the information would not comply with applicable laws and regulations or where such actions are subject to legal restrictions or would require additional registration or other measures than what is required under Swedish law. Actions taken in violation of this instruction may constitute a crime against applicable securities laws and regulations.

This press release is not a prospectus for the purposes of Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 (the "Prospectus Regulation") and has not been approved by any regulatory authority in any jurisdiction. A prospectus, corresponding to an EU Growth Prospectus regarding the Rights Issue described in this press release will be prepared and published by the Company. The prospectus will be scrutinized and approved by the Swedish Financial Supervisory Authority (Sw. Finansinspektionen) being the national competent authority and be published and available on the Company's website thereafter.

In the United Kingdom, this document and any other materials in relation to the securities described herein is only being distributed to, and is only directed at, and any investment or investment activity to which this document relates is available only to, and will be engaged in only with, "qualified investors" who are (i) persons having professional experience in matters relating to investments who fall within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"); or (ii) high net worth entities falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). In the United Kingdom, any investment or investment activity to which this communication relates is available only to, and will be engaged in only with, relevant persons. Persons who are not relevant persons should not take any action on the basis of this press release and should not act or rely on it.

Forward-looking statements

This press release contains forward-looking statements that reflect the Company's intentions, beliefs, or current expectations about and targets for the Company's and the group's future results of operations, financial condition, liquidity, performance, prospects, anticipated growth, strategies and opportunities and the markets in which the Company and the group operates. Forward-looking statements are statements that are not historical facts and may be identified by words such as "believe", "expect", "anticipate", "intend", "may", "plan", "estimate", "will", "should", "could", "aim" or "might", or, in each case, their negative, or similar expressions. The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurances that they will materialize or prove to be correct. Because these statements are based on assumptions or estimates and are subject to risks and uncertainties, the actual results or outcome could differ materially from those set out in the forward-looking statements as a result of many factors. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. The Company does not guarantee that the assumptions underlying the forward-looking statements in this press release are free from errors and readers of this press release should not place undue reliance on the forward-looking statements in this press release. The information, opinions and forward-looking statements that are expressly or implicitly contained herein speak only as of its date and are subject to change without notice. Neither the Company nor anyone else undertake to review, update, confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this press release, unless it is not required by law or Nasdaq First North Growth Market rule book for issuers.

Information to distributors

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the shares in ExpreS[2]ion have been subject to a product approval process, which has determined that such shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, Distributors should note that: the price of the shares in ExpreS[2]ion may decline and investors could lose all or part of their investment; the shares in ExpreS[2]ion offer no guaranteed income and no capital protection; and an investment in the shares in ExpreS[2]ion is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Rights Issue.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the shares in ExpreS[2]ion.

Each distributor is responsible for undertaking its own target market assessment in respect of the shares in ExpreS[2]ion and determining appropriate distribution channels.

This press release constitutes inside information that ExpreS2ion Biotech Holding AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation 596/2014. The information was sent for publication, through the agency of the contact persons set out above, at the time stated by the Company's news distributor, Cision, at the publication of this press release.