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Diurnal Group plc (AIM: DNL), the specialty pharmaceutical company targeting patient needs in chronic endocrine (hormonal) diseases, today announces a proposed conditional Placing of Placing Shares with institutional investors and a Subscription of Subscription Shares by certain Directors to raise up to approximately £ 20.0   million in aggregate before expenses at the Issue Price of 70 pence per New Ordinary Share and an Open Offer to raise up to a further £2.0 million. Funds raised will be used primarily to progress the Group's pivotal Phase 3 studies of Efmody® (development name Chronocort®) as a treatment for congenital adrenal hyperplasia (CAH) in the US through to registration.

Highlights

• The Placing to raise up to approximately £ 20.0 million will be conducted by way of an accelerated bookbuilding process (the "Bookbuild"), which will be launched immediately following this Announcement in accordance with the terms and conditions set out in Appendix II.
• Subject to successful closing of the Bookbuild, the Company is also making an Open Offer, for up to 2,852,317 Open Offer Shares, to raise up to approximately £2.0 million at the Issue Price, on the basis of 2   Open Offer Shares for every 97   Existing Ordinary Shares held by Qualifying Shareholders at the Record Date.   Any entitlements to Open Offer Shares not subscribed for by Qualifying Shareholders will be available to Qualifying Shareholders under the Excess Application Facility.
• The net proceeds of the Capital Raising will be used to progress the development and commercialisation of Diurnal's products, including, inter alia:
  • Progress pivotal Phase 3 studies of Efmody® in the US through to registration in CAH (including a long-term follow-on study); and
  • Continue to support evolution of the Group's earlier stage pipeline.
• Taking into account the expected net proceeds of the Placing and Subscription, the Group's existing and expected cash resources and marketing approval for Alkindi® in both Europe and the US and the positive opinion recently received from the European Medicines Agency (EMA) for the approval of Efmody®, and assuming Efmody® is ultimately commercialised by a third party in the US, the Board believes that Diurnal is funded to profitability for the Group's late-stage cortisol replacement franchise.
• The Issue Price represents a discount of approximately 1.4   per cent. to the mid-market closing price of the Company's Ordinary Shares on 20 April 2021, being the last practicable date prior to the date of this announcement.

The Board believes that the most expeditious route to commercialisation of Efmody® in the US is to carry out the pivotal US Phase 3 study in CAH itself. The Board believes this will increase the future value of the programme, as well as broadening the pool of potential commercialisation partners. The Group has had positive meetings with the US Food and Drug Administration (FDA) and expects to receive formal agreement of the Special Protocol Assessment (SPA) for the US Phase 3 study during Q2 2021.

As at 31 March 2021, the existing cash and cash equivalents (unaudited) held by the Group were £18.0 million. In addition to these cash resources, the Company currently holds 379,474 freely transferable shares in Eton Pharmaceuticals Inc ("Eton") that were received as part of the upfront consideration for the exclusive licence agreement of Alkindi®Sprinkle in the US. Diurnal and Eton are also awaiting confirmation of Orphan Drug Status of Alkindi®Sprinkle from the FDA, which will trigger a $2.5 million milestone payment to Diurnal.

The New Ordinary Shares are not being made available to the public. It is envisaged that the Bookbuild will be closed no later than 4.30 p.m. GMT today, 21 April 2021. Details of the number of New Ordinary Shares and the gross proceeds of the Placing and Subscription will be announced as soon as practicable after the closing of the Bookbuild. The Capital Raising will not be underwritten.

The Placing, Subscription and Open Offer are conditional upon, amongst other things, the passing of the Resolutions to be considered by Shareholders at the General Meeting to be held at 10.00 a.m. on 10 May 2021 at the Company's London offices at 16 Upper Woburn Place, London, WC1H 0BS, United Kingdom. The Placing and Subscription are not conditional on the Open Offer.

Set out below in Appendix I is an adapted extract from the draft Circular that is proposed to be sent to Shareholders after the closure of the Bookbuild and which provides further information on the Group, the Placing, the Subscription and Open Offer. The final Circular, containing the terms and conditions of the Open Offer and Notice of General Meeting will be sent to Shareholders and published on the Company's website on or around 22 April 2021.

The capitalised terms not otherwise defined in the text of this Announcement are defined in Appendix III and Appendix IV and the expected timetable of the principal events is set out in Appendix V.

Martin Whitaker, PhD, Chief Executive Officer of Diurnal, commented:  

"Having received a positive opinion for approval for Efmody® from the EMA in March 2021 and, with our European launch expected in Q3 2021, we are pleased to announce that this fundraise will enable us to progress Efmody® in the US, another key market for Diurnal. We have made excellent progress with our development plans for a pivotal Phase 3 clinical trial in the US for Efmody® and, with the proposed new funds, we expect to initiate the study during H2 2021. In addition, successful completion of the fundraise will allow us to continue to support the development of our earlier stage pipeline, and is expected to ensure our late-stage cortisol replacement franchise is funded through to profitability."  

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014 (MAR) as it forms part of the law of England and Wales by virtue of the European Union (Withdrawal) Act 2018.

This summary should be read in conjunction with the full text of the following announcement.

For further information, please visit www.diurnal.co.uk or contact:

Diurnal Group plc	+44 (0)20 3727 1000
Martin Whitaker, Chief Executive Officer Richard Bungay, Chief Financial Officer
Panmure Gordon (UK) Limited(Nominated Adviser and Sole Broker)	+44 (0) 20 7886 2500
Corporate Finance: Freddy Crossley, Emma Earl Corporate Broking: Rupert Dearden
FTI Consulting (Investor Relations)	+44 (0)20 3727 1000
Simon Conway Victoria Foster Mitchell

Notes to Editors

About Diurnal Group plc

Diurnal Group plc is a European, UK-headquartered, specialty pharmaceutical company dedicated to developing hormone therapeutics to aid lifelong treatment for rare and chronic endocrine conditions, including congenital adrenal hyperplasia, adrenal insufficiency, hypogonadism and hypothyroidism. Its expertise and innovative research activities focus on circadian-based endocrinology to yield novel product candidates in the rare and chronic endocrine disease arena

For further information about Diurnal, please visit www.diurnal.co.uk