Valentis Provides Corporate Update
Tuesday February 18, 12:00 pm ET
BURLINGAME, Calif., Feb. 18 /PRNewswire-FirstCall/ -- Valentis, Inc. (Nasdaq: VLTSD - News) today provided a corporate update regarding the operations of the Company. Since September 30, 2002, the Company has made significant progress in regard to several corporate initiatives, including achieving a major milestone in the development of its proprietary del-1 angiogenesis product, signing several new licensing agreements for use of the Company's proprietary technologies for product development and restructuring its capital stock. Specifically, during the last several months, the Company has achieved the following:
Advanced the Company's proprietary del-1 product through its Phase I safety trial;
Signed licensing agreements with Schering A.G., Prolong Pharmaceuticals, Epimmune, and GlaxoSmithKline that, resulted in aggregate proceeds of $2.2 million;
Continued to pursue a patent infringement lawsuit with Alza Corporation;
Completed a significant capital restructuring, which improved the Company's stockholders' equity position on its balance sheet;
Preserved the Company's Nasdaq listing, which included a move to the Nasdaq SmallCap exchange;
Changed the composition of its Board of Directors; and
Focused development efforts on the Company's proprietary del-1 angiogenesis product and substantially reduced the Company's cash burn rate.
Del-1 Product Development
On February 17, 2003, the Company achieved a major corporate milestone by completing the initial follow-up of the last patient in the final cohort of the Phase I clinical trial for its lead product, del-1. Twenty patients with peripheral arterial disease (PAD) have been enrolled and treated in this trial with no severe adverse events reported related to the drug or method of administration. The results of this trial allowed the Company to choose a dose and dosing pattern for the Phase II safety and efficacy trial scheduled to start in the second quarter of 2003.
Del-1 is a protein involved in the early growth and development of blood vessels. It is a unique angiogenic factor that promotes vascular growth and inhibits endothelial cell death. It is believed that del-1 has a distinct mechanism of action from other known angiogenic factors such as members of the VEGF and FGF families. By stimulating angiogenesis, del-1 has demonstrated the potential to be effective in the treatment of a variety of vascular diseases, including peripheral arterial disease (PAD) and ischemic heart disease (IHD).
Collaboration with Schering AG
In December 2002, the Company announced the formation of a multi-product license and option agreement to develop and commercialize gene-based therapeutic products with Schering AG of Germany (FSE: SCH; NYSE: SHR). Under terms of the agreement, Schering obtained exclusive, world-wide rights to Valentis' PINC polymer based synthetic gene delivery and the GeneSwitch gene regulation technologies for use with up to two genes proprietary to Schering, and an option for non-exclusive rights to the PINC technology for a third gene. Schering made an initial payment of $1.1 million in cash to Valentis in license and option fees.
Expansion of GeneSwitch License with GlaxoSmithKline
In December 2002, the Company announced that it expanded its April 2001 license agreement with GlaxoSmithKline for use of the Company's GeneSwitch gene regulation technology. Under the terms of the amended non-exclusive license, GlaxoSmithKline has the ability to use the GeneSwitch technology for research purposes in all of its facilities for a period of up to 10 years. In consideration of this expansion, Valentis received a $1 million payment.
Vaccines Collaboration with Epimmune Inc.
In October 2002, the Company announced that Epimmune Inc. signed a non-exclusive license for Valentis' proprietary DNA Vaccine delivery technology for use in developing treatments for cancer. Under the terms of the agreement, Epimmune has rights to use Valentis' proprietary PINC polymer DNA delivery technology for use in up to four preventive and therapeutic DNA cancer vaccine products. In return, Valentis received an upfront license fee and will be eligible to receive product development milestones and royalties on future product sales. Epimmune and its collaborators will fund product development. This is the second licensing agreement with Epimmune around the creation of therapeutics vaccines. In September 2000, Epimmune, Inc. and Valentis had announced that Epimmune licensed Valentis' proprietary PINC gene delivery technology for Epimmune's preventive and therapeutic DNA vaccines in development against the human immunodeficiency virus (HIV) and the hepatitis C virus (HCV).
OptiPEG License to Prolong Pharmaceuticals
On February 10, 2003, the Company announced that, through its wholly-owned subsidiary, PolyMASC Pharmaceuticals Plc, it entered into a broad licensing agreement with Prolong Pharmaceuticals for use of its proprietary OptiPEG PEGylation platform in the development and commercialization of PEGylated protein therapeutics. Under terms of the agreement, Valentis will receive an initial cash payment from Prolong and be eligible for future product development milestones and royalties on sales. Prolong will be responsible for the development, manufacturing and commercialization of products and will bear all related program expenses.
Alza Patent Litigation
In January 2003, the Company announced that the Japanese Patent Office has dismissed a demand for invalidation brought by ALZA Corporation, a unit of Johnson & Johnson, on August 20, 2001, relating to claim five of Japanese Patent No. 2948246. ALZA was seeking to overturn the previous finding of the Opposition Division of the Japanese Patent Office in favor of PolyMASC's patent.
The Japanese patent at issue in these proceedings is the counterpart to U.S. Patent Number 6,132,763 and European Patent Nos. EP572,049B1 and EP445,131B1.
In November 2002, the Company announced that its wholly-owned subsidiary, PolyMASC Pharmaceuticals Plc, received a U.S. ruling in its patent infringement litigation against ALZA Corporation. The ruling received followed a Markman hearing, in which the court decided the meaning of certain terms used in the patent claims at issue in the litigation. In the ruling, the district court adopted the claim interpretation proposed by ALZA. The Company intends to seek immediate disposition of the case at the district court level in order to bring the claim construction issues up for review by the Federal Circuit Court of Appeals. As a result of that ruling, the trial scheduled for the week of December 9, 2002, did not take place.
PolyMASC initiated infringement proceedings against ALZA in the United States in April 2001, for infringement of U.S. Patent Number 6,132,763, based on ALZA's manufacturing and selling of Doxil® and Caelyx®, PEGylated-liposome products encapsulating the drug doxorubicin. Doxil is currently approved and marketed in the United States for Kaposi's sarcoma and refractory ovarian cancer by Ortho Biotech, a subsidiary in the Johnson and Johnson family of companies. The same product, Caelyx is approved and marketed in Europe for the same indications by Schering Plough.
PolyMASC has asserted patent infringement in both the U.S. and Germany based on ALZA's manufacturing and selling of Doxil and Caelyx, PEGylated-liposome products encapsulating the drug doxorubicin. Doxil is currently approved and marketed in the United States for Kaposi's sarcoma and refractory ovarian cancer by Ortho Biotech, a subsidiary in the Johnson & Johnson family of companies. The same product, Caelyx, is approved and marketed in Europe for the same indications and breast cancer by Schering Plough.
Capital Restructuring
In January 2003, the Company received stockholder approval for, and completed, a proposed capital restructuring. Specifically, the Company effected the conversion of all outstanding shares of a Series A convertible redeemable preferred stock into common stock and, immediately thereafter, effected a reverse stock split of its common stock at a ratio of 1-for-30.
Move to The Nasdaq SmallCap Market
The Company's Common Stock began trading on The Nasdaq SmallCap Market on January 31, 2003. There was no change in the method by which the Company's Common Stock is traded, and the transfer to The Nasdaq SmallCap Market will be transparent to stockholders. The Nasdaq National Market and The Nasdaq SmallCap Market both operate under the same electronic, screen-based dealer market with trading executed through an advanced computer and telecommunications network. The decision of The Nasdaq Stock Market to grant the Company's request to transfer the Company's Common Stock from The Nasdaq National Market to The Nasdaq SmallCap Market was made by a panel established by Nasdaq to review the Company's ability to satisfy the continued listing requirements applicable to Nasdaq National Market issuers.
New members of Board of Directors
In January 2003, the Company also announced that Dennis J. Purcell and Reinaldo M. Diaz were elected to its Board of Directors.
Mr. Purcell joined the Perseus-Soros BioPharmaceutical Fund, L.P., in February 2000 as Senior Managing Partner. He is responsible for the overall management of the fund, which is dedicated to making private equity investments in the life sciences industry. Mr. Diaz, a founder of the Diaz & Altschul Group, LLC (D & A Group), a merchant bank focused on the healthcare industry also serves on the Board of Directors of Medrium, Inc., a provider of web-based medical practice management systems, and Berkeley Heart Labs, Inc., an advanced cardiovascular testing and e-healthcare company. Mr. Diaz has previously worked with a broad range of healthcare companies and has particular expertise in the funding of novel pharmaceutical compounds developed by emerging biopharmaceutical companies.
Messrs. Diaz and Purcell fill two of the vacancies created by the resignations of Drs. Raju Kucherlapati, Bert W. O'Malley and John S. Schroeder. Doctors Schroeder and O'Malley are remaining with the company as scientific advisors.
Valentis is converting biologic discoveries into innovative products. The Company's lead product is based on the del-1 angiogenesis gene, formulated with one of the Company's PINC proprietary polymer delivery systems. The Company is developing its other technologies, the GeneSwitch® and DNA vaccine delivery technologies, through partnerships with pharmaceutical and biotechnology companies. Additional information is available at valentis.com .
Statements in this press release that are not strictly historical are "forward-looking" statements as defined in the Private Securities Litigation Reform Act of 1995. The words "believes," "expects," "intends," "anticipates," variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Factors that could affect Valentis' actual results include the need for additional capital, the early stage of product development, uncertainties related to clinical trials, and uncertainties related to patent position. There can be no assurance that Valentis will be able to develop commercially viable gene-based therapeutics, that any of the Company's programs will be partnered with pharmaceutical companies, that necessary regulatory approvals will be obtained, or that any clinical trial will be successful. Actual results may differ from those projected in forward-looking statements due to risks and uncertainties that exist in the Company's operations and business environments. These are described more fully in the Valentis Annual Report on Form 10-K for the period ended June 30, 2002 and Quarterly Report on Form 10-Q for the period ended December 31, 2002, each as filed with the Securities and Exchange Commission.
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Source: Valentis, Inc. |
