News - IGT Merger with NTB Neurotrophic Bioscience Inc.
To Combine with NTB Neurotrophic Bioscience Inc. To Form a New Neuroprotection Company
10/26/2000 11:19:00 / IGT PHARMA INC
IGT PHARMA INC. ("IGT-V")
- To Combine with NTB Neurotrophic Bioscience Inc.
- To Form a New Neuroprotection Company
IGT Pharma is pleased to announce that it has entered into a Letter of Intent with NTB Neurotrophic Bioscience Inc. ("NTB") relating to
the combination of the two companies in a "merger of equals" transaction whereby IGT Pharma will acquire all of the issued and
outstanding shares of NTB to create a new entity, to be renamed in a name to be determined, for purposes herein, "CombinationCo",
subject to approval by the shareholders of both IGT Pharma and NTB, and acceptance by the Canadian Venture Exchange ("CDNX").
NTB is a Toronto based, private neuroscience company focused on the discovery and development of human therapeutics that will
rescue brain cells from neuro-degenerative diseases such as Parkinson's. IGT Pharma and NTB are companies with highly
complementary technology, products and corporate development priorities specifically relating to neuroprotection and neuronal subtype
specificity. NTB is developing a highly sophisticated approach to the treatment of Parkinson's Disease (PD), Alzheimer's Disease (AD)
and Amyotrophic Lateral Sclerosis (ALS). In these neuro-degenerative diseases, researchers are aware that specific types of brain cells
(neurons) die in specific areas of the brain. Neurotrophic factors are known to promote the survival and development of these neurons. It
is for these reasons that NTB has developed technology to isolate neuron-specific neurotrophic factors that selectively protect the type of
neurons that are dying in each of these diseases. This approach is substantially different from current competitive efforts, which
introduce factors to a broad spectrum of different neurons in the brain thus producing non-specific and non-selective actions.
The combination of the two companies launches CombinationCo with a globally competitive position in the field of neuroprotection.
CombinationCo will be engaged in the discovery and development of novel protein and small molecule based therapeutics for the
treatment of neurodegenerative and neurological disorders, which are unmet medical needs with substantial patient populations.
CombinationCo will be a leader in the development of proprietary drug discovery platforms that combine leading edge tools necessary
for effective drug discovery, including chiral chemistry, primary cell based screening, genomics and proteomics. These platforms are
based on two programs in which CombinationCo will have established a leading scientific and proprietary position: neuron-specific
neurotrophic factors and amino acid type drugs targeted at specific metabotropic glutamate receptors in the brain.
The initial scientific platform that will drive shareholder value is expected to include:
- a pre-clinical small molecule based on the metabotropic glutamate receptor program, capable of attracting a corporate research and
development partnership, based on a specific neuronal rescue application;
- the identification of a dopaminergic specific neurotrophic factor candidate protein targeted at Parkinson's Disease in pre-clinical
development;
- a library of proprietary amino acid type metabotropic glutamate receptor subtype specific molecules for neuronal dysfunction and
rescue; - a library of proprietary naturally immortalized astrocytes from different regions of the brain, which are potential sources of
cell-type specific neurotrophic factors; and
- a discovery engine that combines: medicinal chemistry focused on rational chiral drug design, functional genomics and developmental
biology.
NTB was federally incorporated in 1998 and subsequently has raised $6 million through institutional private placements. The list of NTB
shareholders, none of whom holds a controlling interest in NTB, include:
Business Development Bank of Canada Toronto, Ontario
Sofinov Societe Financiere d'Innovation Inc. Montreal, Quebec
GeneChem Technologies Venture Fund, L.P. Montreal, Quebec
Mr. Anthony Giovinazzo Toronto, Ontario
Dr. John Commissiong Toronto, Ontario
Dr. James Hawkins Ijamsville, Maryland
In addition to the above, an arms length pharmaceutical corporation holds a minority interest of less than 0.3%.
IGT Pharma has reviewed the financial statements of NTB as of December 31, 1999 audited by Ernst & Young as well as subsequent
non-audited financial statements of NTB as at August 31, 2000 which show that NTB had, at that date, working capital of $3,282,061,
long-term debt of $382,713 and shareholders' equity of $3,378,212.
In the transaction, NTB shareholders will receive shares of CombinationCo based on an exchange ratio of 1.555 CombinationCo
shares for each NTB share. This will result in the issuance of 10,734,165 common shares of CombinationCo to existing NTB
shareholders as well as 256,575 warrants to replace existing NTB warrants and 1,068,090 options to be added to IGT Pharma's existing
stock option plan (which will be replaced), to replace existing NTB options. Of the replacement warrants, 155,500 will be at an exercise
price of $0.73955 per share expiring on Feb 18, 2005 and 101,075 will be at an exercise price of $1.109 per share expiring five years
from the date of the closing of the combination transaction. The replacement options will be exercisable at $0.64308 per share expiring
five years from the date of the closing of the combination transaction. There will be no change to the shareholdings of IGT Pharma
shareholders, warrant holders and option holders. It is anticipated that CombinationCo will have 21,484,441 shares issued and
outstanding after the merger of NTB and IGT Pharma, excluding shares to be issued to new investors in either entity in new financing
transactions, or upon the exercise of outstanding options or warrants. CombinationCo will have a further 2,810,379 shares allotted to
issue on the exercise of the outstanding options and warrants of IGT Pharma and on the exercise of outstanding options and warrants of
NTB which will be replaced by options and warrants of CombinationCo.
Proposed directors of CombinationCo include:
Bill T. Comer, Ph.D. Chairman of the Board and Director
William T. Comer, Ph.D., is an experienced scientist and commercial executive. From 1991 to 1999 he was President & CEO of SIBIA
Neuroscience, Inc. Under his leadership the company grew to 125 people, 4 pharmaceutical partnerships, went public and was sold to
Merck at a substantial premium to its market value. Prior to this, he spent 30 years at Mead Johnson & Co. and Bristol-Myers, most
recently as President Pharmaceutical Research & Licensing. He has led or managed the commercialization of several major drugs in
the CNS, cardiovascular and anticancer areas and currently serves as a Director on several boards including Epimmune.
Michael Ross, Ph.D. Director
Dr. Ross is a managing partner in Didyma LLC, a management consulting firm specializing in management of startup companies. Dr.
Ross was the founding CEO of Axys Pharmaceutical (formerly Arris Pharmaceuticals), a public biopharmaceutical company, and
MetaXen, a company which was recently sold to Exelixis Pharmaceuticals Inc. Prior to that he worked at Genentech for 13 years where
he was Vice President of Development and later Vice President of Medicinal and Biomolecular Chemistry. Dr. Ross has served on a
number of Boards of Directors and been involved in a number of biotech/pharmaceutical partnerships.
Anthony Giovinazzo, MBA Director
Mr. Giovinazzo is a founder of Neurotrophic Bioscience Inc. (NTB). He has a total of 20 years of experience in investment and operating
management. Since 1994, he has focused on developmental companies in the neuroscience field. Prior to establishing NTB with Dr.
John Commissiong, he was Executive Vice President of Nova Molecular Inc., a pioneer in the pharmacogenomics of CNS disease. Prior
to this, he was President of the Neuroscience Partners Fund and a Vice President and Partner at MDS Capital Corp. In addition, while at
MDS he was a Board member on several investments, and specialized in genetics, transgenics and nutraceuticals. Prior to MDS, he
lived in Europe and the United States where he focused on merchant banking and venture capital investing. Mr. Giovinazzo has been an
interim C.O.O. in two turnarounds and one IPO. He holds an MBA from IMD in Switzerland (1986) and a CSCL from Osgoode Hall Law
School in Toronto, Canada (1984).
Adele Sommerfeld, MBA Director
Adele graduated from the University of Toronto with a B.Sc. in Biology an M.Sc. in Molecular Genetics and an MBA in Marketing and
Finance and, upon graduation, launched and directed the growth of a biodiagnostic company. Following the acquisition of the company
in 1994 by Editek Inc., she stayed on to serve as Vice President until 1996. She then joined the equity investment community as a
specialist in genomics and biotechnology with an angel investor. In 1997 she was recruited by the Business Development Bank of
Canada as a biotechnology specialist. She is dedicated to the BDC's Venture Capital main fund, predominantly for
Medical/Biotechnology deals.
Jean-Paul St.Pierre, M.D. Director
Dr. St. Pierre entered the pharmaceutical industry in 1986 with Sandoz Canada Inc. After rising to the position of Vice President, Scientific
Development, he went on in 1993 to join Hoechst-Roussel Canada Inc. in the role of Vice President, Medical Affairs. In 1995 Dr. St.
Pierre assumed the position of Executive Vice-President, Scientific Affairs, Hoechst Marion Roussel Canada Research Inc. and in 1997,
Dr. St. Pierre moved to Rhone-Poulenc Rorer Co. in the United States to take the position of Vice-President, Worldwide Clinical
Development. In 1999, Dr. St. Pierre became active in Vancouver's burgeoning biotechnology industry as President and Chief Executive
Officer of Synapse Technologies Inc.
Rashid Aziz, C.A. Director
Mr. Aziz obtained his Chartered Accountancy designation in the United Kingdom in 1976 and in Canada in 1982. He is a director of a
number of companies. Mr. Aziz has been self-employed since 1992 and offers financial and business consultancy services to public and
private companies. Principal areas of assistance include strategic and business negotiations, financial strategy and the management of
relations in an entrepreneurial environment. From 1988-1991 he was Vice-President and Chief Financial Officer of QLT Inc. Prior to that
he was a Senior Audit Manager with Deloitte & Touche, Chartered Accountants, from 1979-1988.
Leanne E. Bate, B.A., MBA Director
Leanne Bate is focused on high-tech and bio-tech strategic corporate development and finance, providing strategic planning and
corporate development services for early stage companies. In addition, she represents equity investors seeking investment
opportunities in the new economy. She has held executive positions in the broadcast and telecommunications industries in Europe and
Canada for over 10 years, most recently with Rogers Cablesystems where she was responsible for strategic development across the
Rogers' group of companies. Ms. Bates sits on the boards of a number of public and private companies. She holds a B.A. in English
Literature from the University of British Columbia and an MBA, specializing in marketing and finance, also from U.B.C.
Bruce Schmidt, the current President, C.E.O. and Director of IGT Pharma will leave those roles and will provide ongoing assistance and
advice as necessary to CombinationCo for an orderly and smooth transition.
Proposed officers of the new combined entity include:
Anthony Giovinazzo, M.B.A. President & CEO
(As above)
John Commissiong, Ph.D. Chief Scientific Officer - Biology
Dr. Commissiong is the scientific founder of Neurotrophic Bioscience Inc. He is an expert in the neurochemistry and physiology of
dopaminergic neurons. His earlier work on spinal cord injury and mechanisms of regeneration in the transected spinal cord was done
while he was a professor in the Department of Physiology, McGill University, Montreal. He then moved to the National Institute of
Neurological Disorders & Stroke (NINDS), National Institutes of Health (NIH), Bethesda, Maryland, where he focused on molecular
mechanisms of neurodegeneration, From 1989-94 he served as Chief: Unit of Neural Transplantation, Laboratory of Cellular &
Molecular Neurobiology, NINDS, and later (1994-96) was Head: Neurotrophic Factors Group, Laboratory of Molecular Biology, NINDS. In
1993, Dr. Commissiong received the Merit Award of the Neurology Institute for his work related to understanding the fundamental
mechanisms of degeneration of neurons in the central nervous system (CNS). Dr. Commissiong obtained M.Sc. and Ph.D. degrees in
Biochemical Pharmacology and Neurophysiology, respectively, from the University of Southampton, and subsequently did postdoctoral
work in the Laboratory of Preclinical Pharmacology, National Institute of Mental Health, NIH.
Ken Curry, Ph.D. Chief Scientific Officer - Chemistry
Dr. Curry brings over 20 years of expertise and experience in neuropharmacology and medicinal chemistry to the company. He obtained
both his undergraduate and Ph.D. degrees from the City of London Polytechnic in the United Kingdom. He is a recognized pioneer in the
field of CNS drug development, specifically involving the metabotropic glutamate receptors and holds a number of international patents
and has published 35 times in various scientific journals and texts. Dr. Curry holds a number of international patents for the products
that he has developed and many of his compounds have been instrumental in the determination of current knowledge into the structure
of neurotransmitter receptors in the mammalian Central Nervous System.
To finance the combined corporation, NTB and IGT Pharma have entered into an engagement letter with Canaccord Capital Corporation,
which, through its biotechnology corporate finance units in Toronto and Montreal, will sponsor the transaction as well as lead a financing
syndicate that is expected to include Goepel McDermid and BLC Securities (a subsidiary of Laurentian Bank of Canada) with respect to
a special warrants offering of NTB, to raise a minimum of $10 million and a maximum of $20 million to close before December 5, 2000.
Holders of special warrants will receive on exercise one common share of NTB and will ultimately be entitled to receive 1.555 shares of
CombinationCo for each special warrant. Pricing of the financing will be determined at a later time. Existing investors of NTB and IGT
Pharma have expressed an interest in subscribing for up to $6.0 million of the financing.
A cash commission of 7% will be paid on the proceeds of the financing. This commission will be reduced by 50% for a maximum of $6
million of proceeds from existing investors of NTB or IGT Pharma. The underwriters will also be granted Compensation Options in a
number equal to 6.5% of the special warrants sold. The Compensation Options can be exercised at a 15% premium to the special
warrant offering price. Once the Compensation Options have been exercised, one-half of the underlying common shares will become
saleable 12 months after the closing of the financing and the remaining one-half of the underlying common shares will become
saleable 18 months after the closing of the financing. However, if CombinationCo were to list its shares on the Toronto Stock Exchange
at any time within 18 months of the closing of the financing, all the underlying common shares would become immediately tradable.
IGT Pharma has arranged interim working capital and will receive proceeds of $300,000 from an existing investor net of a bonus of
$60,000 to be paid upon repayment of the loan. The loan carries a 12% interest rate with a 61 month term and is repayable earlier in
either cash or stock at the option of IGT Pharma, all terms subject to CDNX approval.
Completion of this combination of NTB and IGT Pharma is subject to a number of conditions, including but not limited to, the negotiation
and execution of a formal combination agreement, customary conditions to closing including the accuracy of representations and
warranties and the delivery of closing documents, receipt of CDNX acceptance and approval by the shareholders of IGT Pharma of the
resolution to issue additional shares, change the name of IGT Pharma, replace the IGT Pharma option plan and continue IGT Pharma
under the Canada Business Corporation Act. The transaction cannot close until all of the required approvals are obtained. IGT Pharma
has scheduled an Annual and Extraordinary General Meeting for December 20, 2000. If the combination agreement can be negotiated
and executed in time, this meeting will consider the combination.
At this time, IGT Pharma and NTB have entered into a letter of intent. Accordingly, there can be no assurance that the transaction will be
completed as proposed or at all. Investors are cautioned that, except as disclosed in the Management Information Circular to be
prepared in connection with the transaction, any information released or received with respect to the transaction may not be complete
and is subject to change and should not be relied upon. Trading in the securities of IGT Pharma should be considered highly
speculative.
Canaccord Capital Corporation, subject to completion of satisfactory due diligence, has agreed to act as sponsor to IGT Pharma in
connection with the transaction. An agreement to sponsor should not be construed as any assurance with respect to the merits of the
transaction or the likelihood of completion.
The Canadian Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor
disapproved the contents of this press release.
IGT Pharma is a Vancouver based biotechnology organization focused on the discovery and development of unique organic molecules
to treat Cancer and diseases of the Central Nervous System.
TEL: 1-800-743-7444 Bruce Schmidt, President
TEL: (604) 822-3503 IGT Pharma Inc.
TEL: 1-416-674-8047 Anthony Giovinazzo, President & C.E.O.
NTB Neurotrophic Bioscience Inc.
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