Tuesday October 22 8:15 AM EDT
Genta announces resignations, downsizing and proposed restructuring
SAN DIEGO--(BUSINESS WIRE)--Oct. 22, 1996-- Genta Inc Tuesday announced that it intends to divide itself into two entities.
Genta hopes to evolve into a focused drug delivery company while a new separately funded antisense cancer company, based on the company's proprietary Anticode technology, would be created. Genta is working with Forward Ventures, a San Diego-based venture capital firm, to seek funding for the proposed new cancer company.
The partners of Forward Ventures have been involved in the creation of a number of cancer-related companies including: Hybritech, IDEC, Corixa, Somatix and Triangle Pharmaceuticals.
Genta intends to have significant ownership interest in the new company when it is formed. As part of the restructuring process, nine current Genta employees assigned to antisense projects have been terminated from their employment effective Oct. 16, 1996. If formation of the new antisense company is successful, it is intended that it will offer employment to all nine of those individuals.
Genta's European operation will also be downsized and its dermatology business offered for sale. In addition, the company intends to sell its JBL subsidiary, a producer of diagnostic and pharmaceutical intermediates.
Genta is in contract negotiations with a potential buyer at this time. If a sale of JBL is consummated, Genta intends to use the funds received from such a sale to help implement its restructuring plan.
The restructuring has also included a reduction in the general and administrative functions. In addition, Genta announced that its
chief financial officer (CFO) and vice president of corporate development have resigned.
The company also intends to begin restructuring its board of directors, seeking to add more members with expertise in the
pharmaceutical and drug delivery businesses. Sam Colella, a company director, announced his resignation effective Oct. 21, 1996.
Genta is currently seeking additional capital to strengthen its balance sheet and to cover public company expenses. Various aspects of the proposed restructuring will require approval of Genta's Series A and/or common shareholders.
The company has been in discussions with representatives of the holders of Series A Preferred Stock for a number of months concerning the proposed restructuring and have been unable to reach agreement on any proposed course of action.
There can be no assurance that the required approvals of the Series A Preferred holders, or others, can be obtained for the proposed restructuring. Further, there can be no assurance that any additional funding can be obtained or, even if necessary approvals and funding are obtained, that this proposed restructuring will be successful. The company has sufficient cash resources to maintain operations through Nov. 30, 1996.
Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements that involve risks and uncertainties, including the ability of the company to obtain sufficient financing to maintain the company's operations, the timely development and receipt of necessary regulatory approvals for the company's potential products, and other risks detailed from time to time in Genta's Securities and Exchange Commission (SEC) reports and filings, including the company's Annual Report on Form 10-K for the year ended Dec. 31, 1995.
There can be no assurance that the company will successfully secure collaborative funding or other sources of financing on favorable terms, if at all. Actual results may differ materially from those projected. These forward-looking statements represent Genta's judgment as of the date of this release. The company disclaims, however, any intent or obligation to update these forward-looking statements.
Genta Inc. is an integrated biopharmaceutical company with a diversified product development pipeline. In the near term, the
company is seeking funding to develop, through Genta Jago Technologies, B.V., oral controlled-release drugs utilizing the
patented GEOMATRIX drug delivery technology.
Longer term, Genta is seeking funding to develop proprietary Anticode technologies to treat diseases at their genetic source.
CONTACT: Genta Inc., San Diego
Thomas H. Adams, 619/455-2700 |
