I'm not thrilled with this transaction. 10% dilution for a 15% stake in an early-stage biotech.
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Oncolytics Biotech Inc - News Release
Oncolytics to acquire Transition Therapeutics shares
Oncolytics Biotech Inc ONC
Shares issued 19,191,395 Jun 13 2002 close $2.650
Friday Jun 14 2002 News Release
Mr. Wayne Schnarr of Oncolytics Biotech reports
ONCOLYTICS TO ACQUIRE INTEREST IN TRANSITION THERAPEUTICS
Oncolytics Biotech has agreed to acquire, subject to regulatory approval, a minority interest in Transition Therapeutics.
Under the terms of the purchase agreements entered into with two shareholders of Transition, Oncolytics will issue 1,913,889 common shares from treasury, which will be subject to a four-month hold provision, in consideration for 6.89 million common shares of Transition. Transition has approximately 45.9 million common shares issued and outstanding (assuming the 4.5 million Class B common shares have been converted into common shares). The transaction will provide Oncolytics with approximately 15 per cent of the total issued and outstanding shares of Transition.
"This transaction is the first step in executing our strategy to broaden our product pipeline," said Dr. Brad Thompson, president and chief executive officer of Oncolytics. "This investment in Transition allows us to expand our interests in new technologies while continuing to focus our resources on advancing Reolysin through the clinic. And while we have no present plans to acquire additional shares in Transition, we do intend to review our ownership position as progress warrants."
"This investment demonstrates confidence in our product pipeline and two lead products for multiple sclerosis and diabetes, which are expected to enter the clinic this summer," said Dr. Tony Cruz, chairman and chief executive officer of Transition.
WARNING: The company relies upon litigation protection for "forward-looking" statements.
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