Alteon and HaptoGuard Announce Merger Agreement; Alteon Signs Agreements for Sale of Approximately $2.6 Million in Common Stock PIPE Transaction; Conference Call Scheduled for 5:00 PM Today
- Genentech Converts Portion of Alteon Preferred Stock, Transfers Portion
of Preferred Stock to HaptoGuard and Cancels Remaining Preferred Stock,
Acquires Right of First Negotiation for HaptoGuard Cardiovascular Compound
and Future Royalties on Alteon's Alagebrium -
PARSIPPANY, N.J., April 19 /PRNewswire-FirstCall/ -- Alteon Inc. (Amex:
ALT) and HaptoGuard, Inc., a privately-held biotechnology company,
announced today the signing of a definitive merger agreement whereby the
two companies will combine operations in a stock transaction valued at $8.8
million. The companies have complementary product platforms in
cardiovascular diseases, diabetes and other inflammatory diseases,
including two Phase 2 clinical-stage compounds focused on cardiovascular
diseases in diabetic patients. In addition, Alteon has signed definitive
agreements for an equity financing, which will result in proceeds to Alteon
of approximately $2.6 million. The new financing will be used to help fund
future clinical development efforts of the combined companies.
The merger of the two companies is structured as an acquisition by
Alteon. Under the terms of the merger agreement, HaptoGuard shareholders
will receive approximately 37.4 million shares of ALT common stock
(approximately 31 percent of total shares after completion of the merger.)
As part of the merger, a portion of existing shares of Alteon preferred
stock held by Genentech, Inc. (NYSE: DNA) will be converted into common
stock, among other transactions. The merger and stock conversion
transactions are subject to the approval of Alteon and HaptoGuard
shareholders and are expected to close in the third quarter of 2006.
The PIPE financing includes new and existing institutional investors,
in which Alteon will sell approximately 10.3 million Units, consisting of
common stock and warrants, for net proceeds after expenses and fees of
approximately $2.5 million. Each Unit consists of one share of Alteon
common stock and one warrant to purchase one share of Alteon common stock.
The Units are being sold at a price of $0.25 per Unit and the warrants are
exercisable, commencing 6 months from the date of issuance, for a period of
5 years at an exercise price of $0.30 per share. The shares of common stock
and warrants to be offered and sold in the financing have not been
registered under the Securities Act of 1933, as amended (the "Securities
Act"), or state securities laws, and may not be offered or sold in the
United States without registration under or exemption from the Securities
Act, or any applicable securities laws. The Company has agreed to file a
registration statement with the SEC for the resale of the shares of common
stock and the shares of common stock underlying the warrants sold in the
PIPE transaction. Rodman & Renshaw, LLC served as placement agent in this
transaction.
The newly combined company will have two products in Phase 2 clinical
development:
* BXT-51072, HaptoGuard's licensed lead compound, is a glutathione
peroxidase mimetic in development for reduction of mortality in post-
myocardial infarction patients with diabetes. The compound has
demonstrated the ability to reduce infarct size by approximately 85
percent in a mouse model of heart attack called ischemia reperfusion
injury. Additionally, HaptoGuard owns a license to a proprietary
genetic biomarker that has shown the potential to identify patients who
are most responsive to the HaptoGuard compound.
* Alagebrium chloride (formally ALT-711), Alteon's lead compound, is an
Advanced Glycation End-product Crosslink Breaker being developed for
heart failure. Recent data, presented from two Phase 2 clinical
studies at the American Heart Association meeting in November 2005,
demonstrated the ability of alagebrium to improve overall cardiac
function, including measures of diastolic and endothelial function. In
these studies, alagebrium also demonstrated the ability to
significantly reduce left ventricular mass. The compound has been
tested in approximately 1000 patients, which represents a sizeable
human safety database, in a number of Phase 2 clinical trials.
Key components of the proposed transactions between Alteon, HaptoGuard
and stockholder Genentech are as follows:
* Alteon will acquire all outstanding equity of HaptoGuard. In exchange,
HaptoGuard shareholders will receive from Alteon $5.3 million in Alteon
common stock, or approximately 22.5 million shares.
* Genentech will convert a portion of its existing preferred Alteon stock
to Alteon common stock. A portion of Genentech's preferred stock,
which when converted to common stock equals approximately $3.5 million
in Alteon common stock, will be transferred to HaptoGuard shareholders.
* The remaining Alteon preferred stock held by Genentech will be
cancelled.
* Genentech will receive milestone payments and royalties on net sales of
alagebrium, as well as a right of first negotiation on BXT-51072.
"We believe that this transaction will truly benefit the shareholders
of Alteon by bringing to the Company a promising clinical-stage product,
additional proprietary technologies as well as additional management and
Board expertise," said Kenneth I. Moch, Chairman and CEO of Alteon.
"By combining our operations we will become a new company with a
promising product pipeline focused on cardiovascular disease and diabetes,"
said Noah Berkowitz, M.D., Ph.D., President and CEO of HaptoGuard. "We look
forward to potentially initiating new Phase 2 clinical trials for both
alagebrium and BXT-51072."
Upon shareholder approval, Alteon's new management team will be as
follows:
* Kenneth I. Moch, Chairman - Currently Chairman, President & CEO of
Alteon
* Noah Berkowitz, M.D., Ph.D., President & CEO - Currently President &
CEO of HaptoGuard
* Malcolm MacNab, M.D., Ph.D., Vice President of Clinical Development -
Currently Chief Medical Officer of HaptoGuard
* Mary T. Phelan, Director of Finance and Financial Reporting - Currently
Director of Finance and Financial Reporting of Alteon
Additionally, the Board of Directors of the combined company will be
composed of four current members of the Alteon Board of Directors and three
current members of the HaptoGuard Board:
* Kenneth I. Moch, Chairman - Director of Alteon since December 1998
* Noah Berkowitz, M.D., Ph.D. - Director of HaptoGuard since
November 2003
* Marilyn G. Breslow - Director of Alteon since June 1988
* Thomas A. Moore - Director of Alteon since October 2001
* George M. Naimark - Director of Alteon since June 1999
* Mary Tanner - Director of HaptoGuard since January 2004
* Wayne P. Yetter - Director of HaptoGuard since August 2004
(For additional information on the management team and Board of
Directors, please refer to the press release section of the Alteon website,
alteon.com)
Assuming completion of the merger, there will be approximately 119.2
million outstanding shares of Alteon common stock.
A conference call will be held today at 5:00 p.m. ET to discuss this
definitive merger agreement. The dial-in telephone number for the
conference call will be 1-877-704-5381. International participants may call
+913-312-1295. Participants should call approximately 5-10 minutes before
5:00 p.m. In addition, the conference call will be accessible through a
webcast on the company website, alteon.com in the Investor
Relations section, and a digital rebroadcast will be available through
April 26, 2006 at 11:59 p.m. by dialing 1-888-203-1112, pass code 4603660
for domestic callers and +719-457-0820, pass code 4603660 for international
callers.
About Alteon
Alteon is a product-based biopharmaceutical company engaged in the
development of small molecule drugs to treat and prevent the inflammatory
aspects of cardiovascular disease and diabetes. The Company has identified
several promising product candidates that it believes represent novel
approaches to some of the largest pharmaceutical markets.
The Company's lead drug candidate, alagebrium chloride or alagebrium
(formerly ALT-711), is a product of its drug discovery and development
program. Alagebrium has demonstrated potential efficacy in two clinical
trials in heart failure, as well as in animal models of heart failure and
nephropathy, among others. It has been tested in approximately 1,000
patients in a number of Phase 1 and Phase 2 clinical trials. The Company's
goal is to develop alagebrium in diastolic heart failure. This disease
represents a rapidly growing market of unmet medical need, particularly
common among diabetic patients, and alagebrium has demonstrated relevant
clinical activity in two Phase 2 clinical trials. For more detailed
information about alagebrium, please visit the scientific publications
section of the Alteon website, alteon.com.
About HaptoGuard
HaptoGuard, Inc. is a biopharmaceutical company developing and
commercializing therapeutics for inflammatory diseases, particularly those
that are present as a consequence of elevated oxidized lipids in the blood.
The Company's portfolio includes orally bioavailable, organoselenium mimics
of glutathione peroxidase that metabolize lipid peroxides. Its lead
compound BXT-51072 is in Phase 2 clinical trials. The Company also controls
rights to a diagnostic assay that identifies the large subset of diabetic
patients at highest risk for cardiovascular complications, because of a
defect in oxidized lipid metabolism that results in increased
cardiovascular inflammation.
This news release shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of these
securities in any state in which such offer, solicitation or sale would be
unlawful prior to the registration or qualification under the securities
laws of any state.
Any statements contained in this press release that relate to future
plans, events or performance are forward-looking statements that involve
risks and uncertainties including, but not limited to, that Alteon may not
complete the acquisition of HaptoGuard, and if completed, that the combined
company's financial condition may not be as expected, and those relating to
Alteon's ability to obtain sufficient financing to allow it to continue as
a going concern and to continue the development of alagebrium, technology
and product development (including the possibility that early clinical
trial results may not be predictive of results that will be obtained in
large-scale testing or that any clinical trials will not demonstrate
sufficient safety and efficacy to obtain requisite approvals or will not
result in marketable products), regulatory approval processes, intellectual
property rights and litigation, competitive products, and other risks
identified in Alteon's filings with the Securities and Exchange Commission.
Further information on risks faced by Alteon are detailed under the caption
"Risk Factors" in Alteon's Annual Report on Form 10-K for the year ended
December 31, 2005 and in subsequent filings with the SEC. These filings are
available on a website maintained by the Securities and Exchange Commission
at sec.gov. The information contained in this press release is
accurate as of the date indicated. Actual results, events or performance
may differ materially. Alteon undertakes no obligation to publicly release
the result of any revision to these forward- looking statements that may be
made to reflect events or circumstances after the date hereof or to reflect
the occurrence of unanticipated events.
Participants in the Solicitation
In connection with the proposed merger, Alteon Inc. and HaptoGuard,
Inc. will be filing a joint proxy statement with the Securities and
Exchange Commission. Investors and security holders of Alteon Inc. and
HaptoGuard, Inc. are advised to read the joint proxy statement regarding
the proposed merger referred to in this communication when it becomes
available because it will contain important information. Alteon Inc. and
HaptoGuard, Inc. expect to mail the joint proxy statement about the
proposed merger to their respective stockholders. In addition to the proxy
statement, Alteon Inc. files annual, quarterly, and special reports, proxy
statements and other information with the Securities and Exchange
Commission. Investors and security holders may obtain a free copy of the
proxy statement and any other documents filed by Alteon Inc. at
sec.gov and directly from Alteon Inc.
Alteon Inc. and its officers and directors may be deemed to be
participants in the solicitation of proxies from stockholders of Alteon
Inc. with respect to the proposed merger. Information regarding such
officers and directors is included in Alteon Inc.'s Annual Report on Form
10-K for the fiscal year ended December 31, 2005 and in its proxy statement
for the 2006 annual meeting, which will be filed with the Securities and
Exchange Commission. Once filed, these documents are available free of
charge at the Securities and Exchange Commission's website at
sec.gov and directly from Alteon Inc.
HaptoGuard, Inc. and its officers and directors may be deemed to be
participants in the solicitation of proxies from stockholders of
HaptoGuard, Inc. HaptoGuard, Inc. is a private company and does not file
annual or quarterly reports with the SEC.
SOURCE Alteon Inc.
Web Site: alteon.com |
