MONTREAL, June 7 /PRNewswire/ -- Celmed BioSciences Inc., a biopharmaceutical company active in the field of oncology, today announced that it has agreed to acquire NewBiotics Inc. of San Diego, California. This transaction will broaden Celmed's technology base, diversify its product pipeline in the oncology sector and add key shareholders from the U.S., Europe, Canada and Asia.
"This acquisition is 'step one' on the path of Celmed's aggressive growth in the field of oncology," commented Dr. Andre de Villers, President and Chief Executive Officer of Celmed BioSciences. "We have spent the past year restructuring our management team, refocusing our business priorities and accelerating the clinical development of our promising programs. The team we now have in place, with expertise in the clinical development of oncology drugs, gives us the capacity to add significant value to our current products while diversifying our product pipeline. Certainly, the acquisition of NewBiotics furthers our stated objective of finding and developing valuable assets in oncology. We are excited about advancing the exceptional technology and products of NewBiotics."
Details of the Transaction
The acquisition is an all-share transaction by which NewBiotics current shareholders will receive an ownership interest in Celmed of 29.7%. Consequently, Theratechnologies' ownership in Celmed will be reduced from 59.7% to 42.0%, and the Solidarity Fund QFL and SGF will each own 13.4%. Three additional seats on the Board of Directors will be filled by representatives from current NewBiotics' shareholders, expanding the number of Celmed Board members to ten. Celmed's senior management will remain unchanged with Andre de Villers remaining as President and CEO. The combined entity will continue to operate as Celmed BioSciences Inc. and be headquartered in Montreal. The transaction has already been approved by the Board of Directors of both companies and is subject to approval by the shareholders of NewBiotics. The transaction is expected to close by the end of June.
Because of NewBiotics' low "burn rate", the transaction will have a minimal impact on Celmed's cash in the short term. In parallel to the discussions leading to today's announcement, the two companies have worked together to outline a development plan for NewBiotics' products that will benefit immediately from Celmed's current good financial position. This plan could be further accelerated once additional funding has been secured.
"This transaction affords the added advantage of diversifying our shareholder base which now spreads beyond Canada, to the U.S., Europe and Asia, thus providing Celmed with a network of contacts throughout the world," said Jacques Deforges, Vice President, Finance and Chief Financial Officer of Celmed. "Celmed is in good financial shape, and as we begin to step up clinical development of NewBiotics' products, we intend to maintain a sound financial position. Accordingly, efforts are already underway to raise additional capital, and certain NewBiotics shareholders have agreed to support this initiative," he added. Celmed had CAD $28.5 million in cash and cash equivalents as of February 29, 2004.
NewBiotics' Product Pipeline
NewBiotics has one product in clinical trials, one in advanced research and several others in its pipeline. The most advanced product is NB1011, a compound in Phase l/ll clinical trials that exploits thymidylate synthase (TS), an enzyme widely studied and reported in literature. TS levels are very high in a large percentage of cancers including colorectal and other gastrointestinal cancers, non-small cell lung, breast, and ovarian cancers. Unlike certain chemotherapy strategies which inhibit TS activity in tumor cells to reduce tumor growth but fail if TS levels are too high, NB1011 was designed to excel in the presence of very high levels of TS. NB1011 is a small molecule that can enter all cells, but appears to be benign in normal cells that do not have very high levels of TS. In cells with very high levels of TS however, NB1011 is converted into a toxic substance that kills the cell. Thus, the NB1011 could have significant killing activity in tumors resistant to several of the currently available drugs while having little or no toxicity against normal cells.
Preclinical results have provided proof-of-concept that NB1011 can be safe and effective in inhibiting tumor growth when delivered to animals with tumors having very high levels of TS. A Phase I/II clinical trial for NB1011 conducted in two U.S. centers and involving 45 patients with end-stage metastatic colorectal cancer was completed and data is currently being compiled. Full data will be disclosed from this trial in an appropriate venue.
"Ultimately, NewBiotics has developed a drug that represents the ideal approach to cancer using pharmacogenomics, or the use of a specific genetic measurement to predict the success of a cancer drug," commented Dr. de Villers. "By measuring TS levels in tumors, we hope to be able to predict the success of NB1011 against that tumor. It's an elegant approach which many believe represents a major advance in cancer treatment. Celmed will focus its resources on its two core products in oncology: the prophylaxis of acute GvHD with the Theralux(TM) system and the treatment of high-TS solid tumors with NB1011. We believe these products represent the largest opportunities in the combined pipeline," he added.
NewBiotics has a number of other products at various stages in research, one of them being based on an enzyme called estrone sulfatase, present at high levels in many cancers, particularly breast, ovarian and prostate cancers.
Celmed's Existing Product Pipeline
Celmed will continue to develop Theralux(TM), its core technology, for the treatment of disorders related to blood and bone marrow transplantation in the field of oncology. It has one program in clinical trials and two other programs positioned to enter the clinical phase in 2004:
1) Prophylaxis of GvHD: the prevention of acute graft-versus-host disease
(GvHD) in cancer patients receiving donated bone marrow for
transplantation; a Phase I clinical trial is expected to be started in
Canada within the next several weeks.
2) Purge: the purge of contaminating cancer cells in bone marrow donated
by non-Hodgkin's lymphoma (NHL) patients for their own bone marrow
transplants; successful interim results from Celmed's Phase I/II clinical
trial in NHL patients was reported in April 2004.
3) ECP for treatment of autoimmune diseases: the treatment of blood from
an autoimmune or chronic GvHD patient to remove the offending immune
cells and alter the immune response in the patient; this process is known
as extracorporeal photochemotherapy (ECP). A Phase I trial is expected to
be started by year-end 2004.
The Theralux(TM) system consists of a photosensitive drug and a device designed to eliminate certain unwanted cells. The drug, TH9402, is Celmed's proprietary product that is preferentially retained in cancer cells and activated T cells. When TH9402 is administered to a stem cell graft, it enters and is retained in the cancerous cells and activated T cells, but not other normal cells such as stem cells, progenitors and precursors. When the cells retaining the drug are exposed to visible light using Celmed's Theralux(TM) device, the drug undergoes photodynamic activation leading to the death of the unwanted cells. The process is conducted ex vivo (outside the body), thus minimizing side effects and toxicity. Once the blood sample has been purged of the unwanted cells, it is reinfused into the patient who meanwhile has undergone high-dose chemotherapy.
This press release contains forward-looking statements, which reflect
Celmed's current expectations regarding future development of its
products and technologies. Such statements inherently involve numerous
risks and uncertainties, including the availability of funds and
resources to pursue preclinical and clinical projects, the successful and
timely completion of clinical studies, and the granting of the necessary
authorizations by the regulatory authorities. Actual future results may
differ materially from the anticipated results expressed in the forward-
looking statements contained in this press release. Investors are
cautioned against placing undue importance on this forward-looking
information and should consult Theratechnologies' 2003 Annual Report,
which contains a more exhaustive analysis of risks and uncertainties.
CELMED BIOSCIENCES INC.