Cytos to raise up to CHF 37 million

The new funds will recapitalize Cytos and enable it to further advance its programs and specifically to conduct a global multi-center Phase IIb clinical trial with its lead product CYT003-QbG10 (“CYT003”) in patients suffering from allergic asthma. CYT003 is a novel allergen-independent immunotherapy with disease-modifying potential that could be used to treat a broad range of different allergies. Cytos will also use the funds to develop additional pipeline programs and to progress its novel Immunodrug™ platform on which CYT003 is based.

This transaction completes the financial restructuring announced in 2011 which, as previously announced, also included the restructuring of the Company’s outstanding convertible bonds.

Thomas Hecht, Executive Chairman of Cytos, said: “The Board of Directors and the Management are excited that such a prestigious syndicate of renowned investors have decided to recapitalize Cytos in one of Europe’s largest biotech financings so far this year. This recapitalization will enable us to conduct a Phase IIb clinical trial with CYT003, which, if successful, would be a very significant value-inflection point for the Company and which would also be important for Cytos’ ability to repay its restructured convertible bonds on February 20, 2015.”

The financing of up to CHF 37 million committed by the investment syndicate will be a combination of CHF 23.75 million of equity (priced at CHF 1.87 per share, representing the 60 day average closing price prior to March 20, 2012) and CHF 13.25 million in secured convertible loan notes (with a conversion price of CHF 2.244 per share) payable in two tranches of CHF 6.625 million each (the “Convertible Loan Notes”), whereby the second tranche of CHF 6.625 million is subject to Cytos achieving certain milestones in connection with a proposed Phase IIb study of CYT003. Each investor of the investment syndicate will also receive one warrant (exercise price of CHF 2.244) for each new share subscribed for and issued to such investor (the “Warrants”). Furthermore, existing shareholders will be able to participate in this financing by way of a rights offering of up to additional CHF 5 million (i.e. up to 2’673’796 shares of Cytos with a nominal amount of CHF 0.10 each for a price of CHF 1.87 per share, whereby 15 shares held entitle its holder to subscribe for 7 new shares). The capital increase mentioned above in the total amount of up to CHF 28.75 million will result in the issuance of up to 15’374’328 new shares of Cytos with a nominal value of CHF 0.10 each.