DNAPrint(TM) genomics, Inc. Agrees to Acquire Majority Ownership in German Pharmaceutical Company Biofrontera AG; Secures $35 Million Equity Commitment from Dutchess Private Equities Fund, L.P.
SARASOTA, Fla., Sep 28, 2004 /PRNewswire-FirstCall via COMTEX/ -- DNAPrint(TM)
genomics, Inc. (OTC Bulletin Board: DNAP) today announced that it has agreed to
acquire a 51.77% stake in German pharmaceutical company Biofrontera AG. DNAPrint
simultaneously announced that it has received a commitment from Dutchess Private
Equities Fund, L.P. to purchase up to $35 million in DNAPrint common stock over
the next two years.
DNAPrint has agreed to invest 20 million euro (approximately $25.00 million)
over 24 months in Biofrontera Series B preferred shares (68% of B shares)
representing a 51.77% equity interest. Biofrontera will use the proceeds of the
investment to advance its clinical and preclinical drug pipeline. DNAPrint is
only obligated to close the transaction and to begin paying the purchase price
for the Biofrontera shares after it begins making sales of common stock under
its arrangement with Dutchess.
DNAPrint will participate in a clinical pipeline of novel drugs, as well as an
extensive pre-clinical compound portfolio and a broad technology base. This
strategic investment will form the basis of future joint ventures between the
two companies, expanding DNAPrint's presence in Europe and giving Biofrontera a
presence in North America. DNAPrint and Biofrontera have signed a joint venture
framework agreement designed to integrate the companies' technologies in a
mutually beneficial way.
The acquisition will transform DNAPrint from a population genomics company into
a genomics based pharmaceutical company devoted to the development of 21st
century "Theranostics" products. "Theranostics" blend genomics-based tests with
drugs as products to target segments of the patient population for enhanced
efficacy and reduced side effects. Management expects the use of genome-based
testing to facilitate the drug development process and accelerate selected drugs
through the clinical trial process. Both DNAPrint and Biofrontera believe that
Theranostics will form the foundation for post- genome, 21st century medical
care.
Biofrontera's lead product candidate, BF-Derm1, is currently in phase II
clinical trials for the treatment of severe, antihistamine-refractory chronic
Urticaria or chronic itching and scratching. The first interim report of a
European adaptive phase II clinical trial recently indicated that the compound
exhibited a 40% improvement above placebo in clinical symptoms. Biofrontera has
also advanced a novel prophylactic migraine treatment to pre-clinical
development, and has a series of other compounds at the pre-clinical stage.
Professor Doctor Hermann Luebbert, CEO of Biofrontera AG, will join the DNAPrint
board of directors.
DNAPrint also has entered into an Investment Agreement with Dutchess Private
Equities Fund. Dutchess will purchase common stock from DNAPrint, at times and
in amounts selected by DNAPrint, up to a total investment of $35 million over
the next two years. The purchase price at which Dutchess will purchase
DNAPrint's stock is based on the trading price of the stock, and the funding
will begin after DNAPrint registers the common stock that it will issue in the
transaction. DNAPrint anticipates that the transaction will provide it with
equity to build the business of the two companies. The commitment was arranged
by Athena Capital Partners.
"We are extremely excited about the alliance between DNAPrint(TM) and
Biofrontera, and we believe we have established a reliable and trustworthy
source of capital for development of both companies," said Richard Gabriel, CEO
and President of DNAPrint. "Our goal for this financing, once it is completed
through the registration process, is to build shareholder value beyond the
inherent investment value that Biofrontera brings to the relationship. The
investment brings Biofrontera's value to over $51 million, and we fully expect
that value to increase for our shareholders if Biofrontera strikes its
milestones. We hope to increase our revenues by combining the distinct
businesses of the two companies and by offering services that address many of
the problems in drug discovery and development. By paying for the Biofrontera
shares over time we have a unique opportunity to achieve our mutual goals and
objectives."
Professor Doctor Hermann Luebbert, CEO and founder of Biofrontera, commented:
"This investment is a significant milestone for us that provides us with
substantial resources we need to move our products ahead in clinical
development, and to establish the key clinical milestones which will form the
basis of the future value of Biofrontera. We are excited by the recent progress
in developing our lead product BF-Derm1 for the treatment of severe chronic
Urticaria, and the proceeds of this investment should enable us to bring this
promising product to the market sooner. Including DNAPrint's technology in our
clinical studies for the selection of patients will reduce the cost of our
studies and should allow more rapid development. We consider the ability to
predict the individual patient's response to our drugs an extremely valuable
addition to our effort in serving the patients' needs. Capital from this
investment will also fund the development of Biofrontera's other clinical and
preclinical projects and will us to move towards our goal of enhanced
shareholder value."
Athena Capital Partners, Inc. in Tampa, Florida was the private merchant bank
that brought Dutchess and DNAPrint together. "The chance to invest in a first
rate European pharmaceutical company like Biofrontera and to share technologies
and business operations makes this relationship one we had to forge. Dutchess
was the obvious choice because it allows management to obtain the funding on its
own timetable, dictated by the company's needs," said Kevin Cimino, Managing
Director and Principal at Athena.
"Biofrontera brings what DNAPrint has always wanted but few companies of its
size and status have ever been able to obtain -- a viable drug discovery and
development pipeline. I believe the value of population genomics lies in the
sale of highly targeted drug/test combinations. The new DNAPrint/Biofrontera
represents to me an example of the paradigm that most 21st century drug
development firms should adhere to -- using population genomics to develop and
obtain approval for 'smart' drugs targeting specific patient subpopulations with
highly predictable efficacy and minimal side effects," said Tony Frudakis,
DNAPrint's Founder and CSO. "As a scientist, I am delighted at the prospect of
working with Biofrontera scientists. I believe this is the deal all DNAPrint
shareholders have been waiting for - and we hope that it will put DNAPrint on
the map."
Timo Hercegfi, partner at Biofrontera's last lead-investor Heidelberg Innovation
commented: "We are very pleased to welcome DNAPrint as a new investor on board.
This agreement is mutually beneficial to both Biofrontera and DNAPrint and a
great endorsement of Biofrontera's development potential. It secures not only
the funding needed to create further substantial value from Biofrontera's
clinical projects but also gives us great access to DNAPrint management's highly
relevant network in the US biotech and pharmaceutical industry."
About Biofrontera
Biofrontera is aiming to become a specialty pharma business with a profound
internal research capacity to extend its drug pipeline. The company is located
in Leverkusen and Heidelberg, Germany. Biofrontera's existing major investor
group participated in this financing round as well, including Heidelberg
Innovation, 3i Group, TechnoMedia Kapitalbeteiligungsgesellschaft Kvln mbH, and
Prof. Dr. Riesner, founder of Quiagen AG. Since its first financing round in
1998 Biofrontera has raised approximately 38 million euro in venture capital and
strategic investments.
About DNAPrint genomics, Inc.
DNAPrint genomics Inc. was founded in 2000 by Dr. Tony Frukakis. Two products
currently marketed by DNAPrint(TM), DNAWitness(TM) and the ANCESTRYbyDNA(TM),
are a direct result of focused research by the DNAPrint(TM) research and
development team. DNAPrint uses proprietary human genome research methods, to
develop pharma-predictive tests for matching patients with drugs based on their
genetic constitution, and to discover disease genes for the development of new
drugs. DNAPrint will continue to develop new forensic genomics and consumer
genomics testing products. The Company is traded on the Nasdaq OTC Bulletin
Board under the ticker symbol: DNAP. For more information about the company,
please visit dnaprint.com.
Media and Press Contacts
Richard Gabriel
DNAPrint(TM) genomics, Inc.
CEO/President
(941) 366-3400
SOURCE DNAPrint genomics, Inc.
CONTACT: Richard Gabriel, CEO and President, DNAPrint(TM) genomics,
Inc., +1-941-366-3400
URL: dnaprint.com
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