The board of directors of Follicum AB ("Follicum" or the "Company") has, pursuant to the authorisation granted by the annual general meeting on 4 June 2020, resolved on a directed issue of approximately SEK 36.6 million, before issuing costs, consisting of 14,091,335 new shares at a subscription price of SEK 2.60 per share (the "Directed Issue"). The Directed Issue is made to a number of selected investors. The subscription price in the Directed Issue corresponds to a discount of approximately 8.8 per cent in relation to the volume weighted average price for the Company's shares during the last six months. The Directed issue entails a dilution of approximately 17.2 percent of the number of shares and votes in the Company.

Follicum intends to use the issue proceeds primarily for the finalization of the ongoing clinical Phase 2 trial for its drug candidate FOL-005 for patients with hair loss, remaining pre-clinical work and other preparations for the clinical phase of the diabetes project, as well as to strenghten the Company's financial position.

"The successful directed issue has been made possible by significant interest among investors for Follicum's drug candidate for stimulation of hair growth and the company's pre-clinical project in diabetes. With strenghtend financial muscles and a broader shareholder base, we continue to work towards upcoming and important milestones in both projects", says CEO Jan Alenfall.

The Directed Issue comprises 14,091,335 new shares at a subscription price of SEK 2.60, which means that the Company will receive gross proceeds of approximately SEK 36.6 million prior to issue costs, which amount to approximately SEK 3 million. The subscription price of SEK 2.60 has been determined by the Company's board of directors following negotiation with selected investors and corresponds to a discount of approximately 8.8 per cent in relation to the volume weighted average price for the Company's shares during the last six months. The assessment by the board of directors is that the subscription price is on market terms under current industry and market conditions.

The reason for the deviation from the shareholders' preferential rights is to carry out a capital raise in a time and cost efficient way, as well as to broaden the shareholder base. At the same time, the Company is provided with working capital at a lower cost and through a quicker process compared to a rights issue, which collectively and with sufficient strength indicate that it is in the Company's and the shareholders' interest to carry out an new issue with deviation from the shareholders' preferential rights.The following subscribers are participating in the Directed Issue:

Subscriber Number of shares Subscription amount
Kudu AB 273,269 710,499.40 SEK
Ulf Andersson 107,692 279,999.20 SEK
Tibia Konsult Aktiebolag 459,038 1,193,498.80 SEK
Pontus Dunér 76,923 199,999.80 SEK
Nordic Cross Asset 250,000 650,000.00 SEK
Management AB
Mats Invest AB 362,115 941,499.00 SEK
Bernt Lundberg 384,615 999,999.00 SEK
Fastigheter Lund AB
Recipharm Venture Fund 724,230 1,882,998.00 SEK
AB
Bo Uddenäs 67,307 174,998.20 SEK
Adrigo Small & Midcap 1,923,076 4,999,997.60 SEK
L/S
Roxette Photo NV 384,615 999,999.00 SEK
Strand 1,000,000 2,600,000.00 SEK
Kapitalförvaltning AB
för kunders räkning
Daniel Johnsson 1,923,076 4,999,997.60 SEK
Gerhard Dal 192,307 499,998.20 SEK
Fårö Capital AB 769,230 1,999,998.00 SEK
Bengt Halse 384,615 999,999.00 SEK
Niclas Löwgren 192,307 499,998.20 SEK
Råsunda förvaltning 192,307 499,998.20 SEK
aktiebolag
Thomas Gidlund 192,307 499,998.20 SEK
Fredrik Lundgren 1,153,846 2,999,999.60 SEK
LUSAM Invest AB 769,230 1,999,998.00 SEK
Mattias Molvidson 116,923 303,999.80 SEK
Rothesay Limited 2,000,000 5,200,000.00 SEK
Jens Miöen 192,307 499,998.20 SEK
14,091,335 36,637,471.00 SEK

Through the Directed Issue, the number of outstanding shares and votes will increase with 14,091,335 from 67,606,769 to 81,698,104. The share capital will increase by SEK 1,690,960.20 from SEK 8,112,812.28 to SEK 9,803,772.48. Payment for the newly issued shares shall be made cash no later than 5 November 2020. For technical reasons, the Directed Issue will be subscribed for by Nordic Issuing (acting as issuing agent for the Directed Issue) at the quota value of the shares, for subsequnt transfer to the investors who have applied to subscribe for shares at SEK 2.60 per share. The Directed Issue entails a dilution of approximately 17.2 percent of the number of shares and votes in the Company for shareholders who are not participating in the Directed Issue.

About FOL-005

FOL-005 is a modified, short version of the endogenous protein, osteopontin. In two completed clinical studies, treatment with FOL-005 has been shown to be effective and safe. The first study was done in healthy volunteers while the other one was conducted in alopecia patients, i.e. in men with incipient baldness. In both studies, patients were treated at the clinic with intradermal injections, 2 or 3 times a week.

About Alopeci

Unwanted hair loss (alopecia), which is commonly referred to as "baldness", affects about a third of all men between the ages of 20 and 50 in the Western world. For men over 50 years of age, the proportion with hair loss is even higher, about 50%. A significant proportion of women also suffer from unwanted hair loss. All in all, this translates to a huge market for an effective and safe hair-stimulating drug. Today, there are principally only two medicinal substances used for treatment. Sales of these drugs amount to more than USD 3 billion annually. Compared to existing preparations, FOL-005 is likely to offer several benefits, such as fewer side effects, easier dosage and higher proportion of responders.

For further information, please contact:

Jan Alenfall - CEO, Follicum AB
Telephone: +46 (0)709 31 51 15
Email: info@follicum.com

This information is information that Follicum is obliged to make public under the EU Market Abuse Regulation. The information was submitted, through the agency of the above contact person, for publication on 29 October  2020.

About Follicum AB

Follicum AB (publ) develops drug candidates based on tissue reparing peptides with potential use in several therapeutic areas. The company's primary candidate, FOL-005 for stimulating hair growth, is currently being evaluated in a phase IIa study in collaboration with internationally reputable specialist clinics. The company's project in diabetes aims at protecting insulin producing cells against damage and thereby reducing the risk of complications. Based on promising preclinical results preparations for entering a phase I study is ongoing, which expects to be initiated in 2021. Both projects have the potential to become so called first-in-class drugs. For more information, please visit www.follicum.com.

Important information

Publication, announcement or distribution of this press release may, in certain jurisdictions, be subject to legal restrictions and 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. This press release does not constitute an offer to acquire, subscribe or in any other way trade in shares or other securities in the Company in any jurisdiction.

This press release does not constitute or form part of an offer to acquire or subscribe for securities in the United States. The securities referred to herein may not be sold in the United States absent registration under the US Securities Act of 1933 or without applying an exemption from such registration. The information in this press release may not be announced, published, copied or distributed, directly or indirectly,  within or into the United States, Australia, Canada, New Zealand, Hong Kong, Japan, Switzerland, Singapore, South Africa, or in any other jurisdiction where such actions would not comply with applicable laws and regulations or would require registration or any other measures than those required by 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. Follicum has not authorized any offer to the public of shares or rights in any member state of the EEA and no offer prospectus has been or will be prepared in connection with the Directed Issue.

Forward looking statements

This press release contains certain forward-looking statements that reflect Follicum's current views on expectations of future events as well as financial and business development, including statements regarding the capitalisation and statements regarding guidance, planning, prospects and strategies. Words such as "referred", "estimated", "expected", "planned", "anticipated", "can", and other expressions that imply indications or predictions of future developments or trends, and which are not the basis of historical facts, are forward information. Although the Company believes that these statements are based on reasonable assumptions and expectations, Follicum cannot guarantee that such forward-looking statements will be implemented. As these forward-looking statements include both known and unknown risks and uncertainties, real outcomes can differ substantially from what is stated in forward-looking information. Forward-looking statements in the press release only apply at the time of the press release and may change without notice. The Company makes no commitment to publish updates or revisions of forward-looking statements as a result of new information, future events or the like beyond what is required by applicable laws or stock market regulation.