To All:
VIMRX and Baxter Complete Formation of New Cell Therapy Company
WILMINGTON, Del. and DEERFIELD, Ill.--(BW Healthwire)--Dec. 18, 1997--
VIMRX shareholders approve transaction; Owners contribute $40 million to fund new business
VIMRX Pharmaceuticals Inc. (NASDAQ:VMRX) and Baxter Healthcare Corporation have finalized the formation of a new cell therapy company that will develop and market innovative treatments for cancer and other life-threatening diseases. At a special meeting Tuesday, VIMRX shareholders approved the acquisition of Baxter's Immunotherapy Division and the transfer of those assets into a new company. As part of the transaction and creation of the new VIMRX subsidiary, Baxter and VIMRX contributed a total of $40 million to provide working capital for the new venture's operation.
The assets acquired by the new company, headquartered in Irvine, California, include the Immunotherapy Division's global patented cell selection, expansion and storage technologies. The company is awaiting clearance on a new name from worldwide trademark authorities, and expects to announce it in early 1998.
"The new company is well-positioned to be a global leader in cell therapies," said Richard L. Dunning, VIMRX president and chief executive officer. "The close of this transaction with Baxter signals significant business progress for VIMRX as we continue to develop a diverse portfolio of businesses and technologies with outstanding growth potential."
The new cell therapy company's flagship product, the Isolex(R) 300 Magnetic Cell Selection System, was submitted earlier this year with the U.S. Food and Drug Administration (FDA) and the new company plans to file a supplemental application for the fully automated Isolex(R) 300i System with the FDA in 1998. The Isolex(R) cell selection systems are currently marketed in Europe and other numerous countries, including Argentina, Hong Kong, Israel, New Zealand and Singapore. In addition, regulatory filings have been submitted in Japan, Australia and Canada. Baxter will continue the manufacturing, sales and distribution of cancer-related cell therapy products for the new company.
VIMRX estimates that 1997 product sales from the division will be in excess of $15 million. Based on the strength of sales of the Isolex(R) in Europe, VIMRX also projects that product sales for the new company will more than double within the next two years.
"The entrepreneurial structure of the new company offers us the flexibility to rapidly grow the business, establish partnerships to expand the applications of our cell selection technology, and fund expanded areas of research," said John Osth, president and chief executive officer of the new company. "By expanding the applications of our technology, we will move the business from strictly a device oriented company to a business which develops novel therapeutic cell products. These products will enable clinicians to create unique therapeutic approaches to treating cancer patients and patients with other life threatening diseases."
Research and Development Focus
The new company's research and development programs will focus on the development of automated cell processing systems and procedures which generate therapeutic cell products requiring cell expansion and modification. The new company is seeking partners to develop the cell selection platform technology for other disease areas and potential uses outside the current cancer indications. The new company may explore expansion of the current use of the Isolex(R) products beyond the current applications, including other areas such as HIV/AIDS and other infectious diseases, blood disorders, genetic diseases, autoimmune and inflammatory diseases, solid organ transplantation, metabolic disorders, central nervous system disorders, and burns, as well as bone and cartilage repair.
Transaction Details
In consideration for the sale of the assets of Baxter's Immunotherapy Division, Baxter received 11,000,000 shares of VIMRX common stock; 66,304 shares of VIMRX's newly-authorized convertible preferred stock with a principal value of $66,304,000; 19.5% of the outstanding capital stock of the new company; and a warrant to purchase an additional 6% of the new company's common stock for $6 million. Baxter and VIMRX also contributed an additional $30 million and $10 million, respectively, to the new company in the form of 6.5% convertible debt. The $40 million is intended to provide operating funds for the new company.
The VIMRX convertible preferred stock carries a coupon of 6% payable in kind and is convertible into VIMRX common stock upon certain circumstances at a conversion price to be determined by the trading prices of the VIMRX common stock for a 60-day period within the 18 months following the issuance of such convertible preferred stock. The conversion price is subject to a floor of $5.50 per share and a ceiling of $7.50 per share. VIMRX Pharmaceuticals Inc.
VIMRX Pharmaceuticals Inc. (NASDAQ: VMRX), a biotechnology company based in Wilmington, Delaware, is comprised of a diverse portfolio of companies, technologies and compounds. Through its majority-owned affiliate, Innovir Laboratories, Inc. (NASDAQ: INVR), VIMRX is developing oligozymes which control disease- triggering flaws in individuals' genetic chemistry for potential use as both therapeutic agents and as pharmaceutical research tools. A collaborative partnership with Columbia University's Genome Center, VIMRX Genomics Inc. is focused on the commercialization of gene discoveries in cancer and other genetically based diseases. Three VIMRX compounds are in development: VIMRXyn(R), chemically synthesized hypericin, an antiviral and anticancer agent; VM201, a Factor IXa inhibitor for selective inhibition of blood clotting to manage the bleeding risk associated with anti-coagulation; and VM301, a dermatological agent with wound healing potential. Baxter Healthcare Corporation
Baxter Healthcare Corporation is the principal domestic operating subsidiary of Baxter International Inc. (NYSE:BAX). Baxter is a global medical-products and services company that is a leader in technologies related to the blood and circulatory system. Through its subsidiaries, Baxter has market-leading positions in four businesses: biotechnology, cardiovascular medicine, renal therapy and intravenous systems/medical products.
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for certain forward-looking statements. The forward-looking statements contained in this release are subject to certain risks and uncertainties. Actual results could differ materially from current expectations. Among the factors which could affect the new company's actual results and cause results to differ from those contained in the forward-looking statements are the success of the new company's clinical trials, its ability to increase sales in its existing markets, ability to develop new applications for its products as well as new products, delays in receiving FDA or other regulatory approvals, and the development of competing therapies and/or technologies by other companies. -0- NOTE TO INVESTORS AND EDITORS: VIMRX's press releases are available on the Internet through www.vimrx.com and through BusinessWire's web site at businesswire.com. The releases also are available at no charge through BusinessWire's fax-on-demand service at 800-411-8792.
CONTACT:
VIMRX Contacts:
Media Contacts:
Laura A. Mastrangelo
VIMRX Pharmaceuticals
302-998-1734
or
Investor Contacts:
Dian Griesel, Ph.D.
The Investor Relations Group
212-664-8489
or
Baxter Contacts:
Investor Contacts:
Deborah Spak
Baxter International
847-948-2349
or
Neville Jeharajah
Baxter International
847-948-2875 |
