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Biotech / Medical : CYPB - Cypress BioScience -- Ignore unavailable to you. Want to Upgrade?

To: John S. Baker who wrote (513)	4/27/1999 10:47:00 AM
From: muddphudd	Respond to of 586

Cypress Announces Fresenius AG To Purchase Prosorba Column Manufacturing Facility Approximately $5.2 Million in Proceeds to Cypress SAN DIEGO--(BW HealthWire)--April 27, 1999--Cypress Bioscience Inc. (Nasdaq:CYPB - news) announced today that Fresenius AG of Bad Homburg, Germany has exercised the option and acquired the Prosorba® column manufacturing function and related assets, located in Redmond, Washington. The acquisition was made by Fresenius's US subsidiary, Fresenius Hemotechnology Inc. of Concord, Calif. (FHI). As part of their partnering arrangements, which closed earlier this year, Cypress granted Fresenius the option to purchase the Prosorba® column manufacturing assets, located in Redmond, Washington, until the end of 2000. Associated with this purchase option, Fresenius made available to Cypress an interest-free line of credit to provide the company with the working capital required to fund its share of the market launch and to initiate the scale-up process. Cypress has drawn down to date approximately $4 million, which will be offset against the purchase price of the facility. Fresenius has paid an additional amount of approximately $1.2 million to exercise the purchase option. ''Fresenius's ownership of the manufacturing function will accelerate the commitment of their proven expertise toward the scale-up of the Prosorba® column to meet anticipated market demand,'' said Jay D. Kranzler, M.D., Ph.D., chairman of the board and chief executive officer of Cypress Bioscience Inc. ''This transaction also shortens the timeframe for Cypress to reach profitability by reducing our ongoing operating expenses and capital expenditures.'' ''Our further investment reflects Fresenius's view of the promising prospects for the Prosorba® column within the rheumatoid arthritis market place,'' commented Rainer Baule, president and chief operating officer, Fresenius Intensive Care and Hemotechnology. The companies jointly launched the product for the rheumatoid arthritis application on April 5, 1999. The agreement between Cypress and Fresenius AG of Bad Homburg, Germany and FHI provides Fresenius with an exclusive license to distribute the Prosorba® column, a treatment for rheumatoid arthritis, in the US, Europe and Latin America and, subject to certain conditions, Japan and select Asian countries. The terms of the agreement with Fresenius specify joint efforts to introduce and market the Prosorba® column in the U.S., with Fresenius having exclusive distribution rights and responsibility for clinical trials and registration overseas. The agreement includes a 50/50 profit split in countries other than the United States. The profit sharing is 50/50 in the U.S. until Prosorba® column revenue reaches a pre-determined sales threshold, after which time Cypress will receive 60% of the profits and Fresenius will receive 40%. In connection with the closing earlier this year, Fresenius made an up front payment to Cypress of $1.5 million for the purchase by Fresenius of Cypress common stock and warrants. Financial terms also include license payments of up to $54 million based on sales.