SAN DIEGO and ATLANTA, Sept. 13 /PRNewswire-FirstCall/ -- GenStar Therapeutics (Amex: GNT - News) and privately held Vascular Genetics Inc. (VGI) jointly announced today that they have entered into a definitive merger agreement. The agreement is expected to result in the shareholders of each company owning approximately 50% of the newly combined company, which plans to change its name to Autus Genetics Corp.
Autus is being created to capitalize on the complementary strengths of GenStar and VGI to accelerate the development of a later stage genetic therapy for cardiovascular disease as well as other therapies targeting important, unmet needs in major pharmaceutical market sectors.
Major benefits of the merger are expected to include:
- Focused resources applied to late stage development of a gene-based
cardiovascular drug product.
- A portfolio of gene-based therapies targeted to unmet medical needs in
large markets worldwide.
- A senior management team focused on execution of the company's plan to
advance the clinical development of products in an efficient and timely
manner.
- Clinical laboratory, manufacturing facilities and personnel capable of
commercial production of the company's biopharmaceuticals.
When the transaction closes, which is expected to be as early as the fourth quarter of 2002, Autus shares will trade on the American Stock Exchange. Until the closing of the transaction, GenStar's shares will continue to trade on the American Stock Exchange under the symbol GNT.
Autus' development efforts will focus on:
- Severe Cardiovascular Disease - VGI's VEGF-2, a promising gene-based
therapy for the treatment of severe cardiovascular disease and angina,
will be the key focus of Autus' development efforts. Autus plans to
file a clinical protocol with the FDA to advance the product toward
late stage clinical testing in patients with refractory angina that is
inadequately treated by conventional therapies.
- Peripheral Vascular Disease - VEGF-2 also holds promise for the
treatment of peripheral vascular disease. Approximately
400,000 patients world-wide lose limbs each year to this incapacitating
disease. Autus plans to evaluate the application of its VEGF-2 product
for this disorder.
- Hemophilia A - GenStar's gene therapy for the delivery of Factor
VIII in the treatment of Hemophilia A is currently in a Phase I trial
and will also continue to be a key focus of the company's development
plan. Affecting as many as 50,000 patients worldwide, Hemophilia A can
be a debilitating disease to those individuals that suffer from its
effects.
Management Team
The new company's management team will be led by Richard E. Otto, chief executive officer and Robert E. Sobol, M.D., president.
Mr. Otto has held key positions at leading cardiac care companies, including Medtronic Inc. and Eli Lilly, and is a 30-year veteran of the cardiac therapy marketplace. He has been president and chief executive officer of VGI since January 2002 and has overseen a successful financial restructuring of the company. As chief executive of San Diego-based CardioDynamics International Corporation (Nasdaq: CDIC - News), Mr. Otto led a management team that revised the company's business plan, reengineered its products, secured additional funding and re-listed the company's stock on the NASDAQ.
Dr. Sobol founded or co-founded several biotech ventures prior to founding GenStar, including IDEC Pharmaceuticals Corporation and GeneSys Therapeutics, which became Cell Genesys Incorporated after merging with Somatix Therapy Corporation. Dr. Sobol also pioneered clinical applications of immune therapy and gene therapy for the treatment of cancer and is internationally recognized as an expert in the field of gene therapy.
The new company's initial chief financial officer will be Robert T. Atwood. Mr. Atwood joined Vascular Genetics in Jan. 2002 after serving 10 years as executive vice president and chief financial officer of First Union Corporation. Previously, Mr. Atwood was a partner and 28-year veteran of the international accounting firm Deloitte & Touche.
Complementary Assets
Mr. Otto said, "This is a merger of two companies with truly complementary assets and virtually no overlap. With Vascular Genetics' financial restructuring and renewed focus on continuing the VEGF-2 testing for cardiovascular disease, we welcome the clinical, scientific and regulatory expertise of the GenStar team as well as their manufacturing capabilities. This is a great fit, and I am especially pleased that we'll have Bob Sobol to lead our product development efforts and Bob Atwood to lead the financial team."
Dr. Sobol said, "This is an exciting time for everyone at GenStar. This merger significantly accelerates our clinical activities, as VEGF-2 has already achieved some significant milestones. We are looking forward to merging the two companies to form a new company with some very promising gene-based therapies. I look forward to working with Richard and Bob to build Autus into a world class drug development company."
Terms of Transaction, Shareholders and Alliances
The transaction has been structured as a merger of equals. The merger will be completed through a reverse triangular, stock-for-stock merger of a wholly-owned subsidiary of GenStar with and into VGI, with VGI surviving as a wholly-owned subsidiary of GenStar. Under the terms of the merger agreement, VGI's stockholders will receive, in exchange for all of the outstanding capital stock of VGI, newly issued shares of GenStar common stock equal to the fully-diluted outstanding capitalization of GenStar, which is expected to be approximately 38 million shares. The Board of Directors of each of GenStar and Vascular Genetics unanimously approved the definitive merger agreement. The transaction is subject to the GenStar and VGI shareholders' approval, as well as other closing conditions. VGI's largest shareholders, Human Genome Sciences, Inc. (Nasdaq: HGSI - News) and Cato Holding Company, have approved the transaction as part of VGI's restructuring plan, and have entered into voting agreements in this regard. GenStar and VGI expect the closing to occur as early as the fourth quarter of calendar 2002.
Under the definitive merger agreement, Baxter International, Inc. and Human Genome Sciences, Inc. each will hold approximately 15% of Autus on a fully-diluted basis. Human Genome Sciences, a founding investor in VGI, has provided the company with a worldwide exclusive license to develop the VEGF-2 gene for vascular therapeutics. Baxter International has been helping to fund development of the GenStar Factor VIII treatment for Hemophilia A. GenStar has research agreements with Baxter Healthcare and Centocor, a Johnson & Johnson company, which will continue in place with Autus after the merger.
About Vascular Genetics
Vascular Genetics Inc. was founded in 1997 in partnership with Human Genome Sciences, Inc., St. Elizabeth's Medical Center and Cato Holding Company to develop the pioneering research of the late Dr. Jeffery M. Isner, utilizing gene therapy for the treatment of severe cardiovascular disease. VGI believes that successful development of VEGF-2 applications to treat critical ischemic diseases of the heart and peripheral vascular systems will position the new company to become an industry leader in the cardiovascular therapeutics market.
About GenStar
GenStar Therapeutics is a biopharmaceutical company that since 1995 has been developing innovative gene therapy products for the treatment of serious medical disorders. The company's research and development efforts, utilizing advanced gene delivery technologies, have focused on hemophilia, cancer and vaccines. GenStar's hemophilia, prostate cancer and HIV/AIDS product development programs are supported, in part, by grants from the National Cancer Institute and the National Institute of Health. |
