Abraxis Makes Initial $7 M US Equity Investment in ProMetic, with Future Additional Optional Equity Investments of Up to $25 M US
LOS ANGELES, CALIFORNIA, USA and MONTREAL, QUEBEC, CANADA--(Marketwire - September 04, 2008) - Abraxis BioScience, Inc. (NASDAQ: ABII) and ProMetic Life Sciences Inc. (TSX: PLI) announced today that they have signed definitive agreements for the development and commercialization, on a world-wide basis (excluding China and Taiwan), of four biopharmaceutical products targeting underserved medical conditions. These represent market opportunities potentially exceeding $600 M US in annual revenue for Abraxis. The transaction includes an initial strategic investment, by Abraxis, in ProMetic of $7 M US at $0.47 CDN per share as well as providing Abraxis rights to make optional investments of up to $25 M US.
The transaction involves access to ProMetic's proprietary protein technologies to commercialize the biopharmaceuticals. Abraxis will fund all development costs to regulatory approval. The licensed products will be manufactured by ProMetic and commercialized by Abraxis.
"The strategic fit between our two companies has resulted in an agreement that makes key resources available to ProMetic while providing Abraxis with access to leading protein technologies and products with excellent market potential," stated Patrick Soon-Shiong, M.D., Chairman and Chief Executive Officer of Abraxis. "ProMetic is providing us with proven technologies enabling the development and manufacturing of four valuable therapeutics, while Abraxis' corporate and financial resources will significantly accelerate their commercialization," added Dr. Soon-Shiong.
The licensing agreements include up to $8 M US to ProMetic in potential development milestone payments; potential sales milestones in excess of $287 M US in addition to royalties on the net sales of the four products by Abraxis. Under a separate service agreement, ProMetic will perform product development activities on behalf of Abraxis, which translates into revenue for ProMetic starting in 2008. The combination of development milestones and service fees could represent revenue totaling $34 M US over the next three years for ProMetic. The first product is expected to reach commercial stage by 2011.
Additional revenue to ProMetic will result from the manufacturing of products for clinical trial requirements. Beyond that, the revenue opportunity to ProMetic is expected to significantly increase once the products have reached commercial status. Pursuant to the manufacturing agreement, ProMetic will supply Abraxis with bulk active ingredients. Abraxis will then perform the final formulation steps to dosage form for the four biopharmaceutical products.
"This transaction signifies the beginning of a new chapter for ProMetic. The equity component and the service agreement, in combination with ProMetic's other developing revenue streams, will fund the day-to-day operations of the Company. Financing activities will only be undertaken if significant opportunities emerge to further expand ProMetic's business," commented Mr. Pierre Laurin, President and Chief Executive Officer of ProMetic.
"The cash-flow contribution from these agreements is expected to be in the range of $10 M US in 2008 and each of the following two to three years prior to the first expected regulatory approval of the products," stated Mr. Bruce Pritchard, ProMetic's Chief Financial Officer. Mr. Pritchard added: "Once the licensed products reach commercial status, the nature of our revenue converts into manufacturing revenues, royalties and sales milestones, all of which grow proportionately with Abraxis' sales performance."
HealthPro BioVentures, LLC of New York acted as advisor to ProMetic.
Filing of Short form base shelf prospectus
In order to facilitate the completion of this agreement, ProMetic will file a base shelf prospectus ("Prospectus") with the securities regulators in each Canadian province. This will provide the Company with flexibility to issue its common shares in one or more tranches periodically to the public in Canada, for the life of the Prospectus. The securities may be issued at the Company's discretion, with an aggregate offering amount not to exceed $42 M CDN in value. As part of this filing, ProMetic will qualify the issuance of 15,677,021 common shares at $0.47 CDN per common share for proceeds of $7,368,199 CDN through a pricing supplement ("Supplement"). Details of the filing will be set out in the Supplement to the Prospectus, as amended and supplemented, which will be available at the SEDAR website at www.sedar.com. Abraxis may upon fulfillment of certain requirements, acquire up to 55,989,360 common shares at $0.47 CDN for a total of $25 M US. Of this total amount, ProMetic will qualify 14,495,452 common shares at $0.47 CDN for a total of $7 M US in the Supplement and the balance of the common shares underlying these rights are to be qualified in the filing of additional supplements under the Prospectus.
The information contained in this news release does not constitute an offer to sell or the solicitation of any offer to buy nor will there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
Conference Call Details
ProMetic Life Sciences Inc. ("ProMetic") will be hosting a conference call and web cast on Friday, September 5, 2008 at 08:30 EDT to give an update on its recent corporate activities.
The conference call may be accessed by way of telephone or web cast. The numbers to access the conference call are (416) 644-3421 (international) and 1 (800) 731-5319 (toll free). A live audio web cast of the conference call, complete with a slide presentation, will be available through ProMetic's website at http://www.prometic.com/en/investors/presentations-webcasts.php . Please connect at least five minutes prior to the conference call to ensure adequate time for any software download that may be needed to hear the web cast. A replay of the call will be available by telephone for a period of seven days as of Friday, September 5, 2008 at 11:00 EDT. The numbers to access the audio replay are (416) 640-1917 (international) and 1 (877) 289-8525 (toll free) using access code 21281968. Afterwards, the web cast may be downloaded directly from ProMetic's web site.
About Abraxis BioScience, Inc.
Abraxis BioScience, Inc. is a fully integrated global biotechnology company dedicated to the discovery, development and delivery of next-generation therapeutics and core technologies that offer patients safer and more effective treatments for cancer and other critical illnesses. The Company's portfolio includes the world's first and only protein-bound chemotherapeutic compound (ABRAXANE®), which is based on the Company's proprietary tumor targeting technology known as the nab™ platform. The first FDA approved product to use this nab™ platform, ABRAXANE®, was launched in 2005 for the treatment of metastatic breast cancer. Abraxis trades on the NASDAQ Global Market under the symbol ABII. For more information about the Company and its products, please visit www.abraxisbio.com.
About ProMetic Life Sciences Inc.
ProMetic Life Sciences Inc. (www.prometic.com) is a biopharmaceutical company specialized in the research, development, manufacture and marketing of a variety of commercial applications derived from its proprietary Mimetic Ligand™ technology. This technology is used in large-scale purification of biologics and the elimination of pathogens. ProMetic is also active in therapeutic drug development with the mission to bring to market effective, innovative, lower cost, less toxic products for the treatment of hematology and cancer. Its drug discovery platform is focused on replacing complex, expensive proteins with synthetic "drug-like" protein mimetics. Headquartered in Montreal (Canada), ProMetic has R&D facilities in the U.K., the U.S. and Canada, manufacturing facilities in the U.K. and business development activities in the U.S., Europe, Asia and in the Middle-East.
Forward Looking Statements
This press release contains forward-looking statements about ProMetic and Abraxis' objectives, strategies and businesses that involve risks and uncertainties. These statements are "forward-looking" because they are based on current expectations about the markets the companies operate in and on various estimates and assumptions. For example, forward looking statements around cash-flow and profitability are based on financial modeling undertaken by management. This financial modeling takes into account a combination of revenue and expense transactions that are certain to be incurred, as well as including forward looking transactions based on probability. In assessing probability, management considers the status of negotiations for any income transactions, and the likelihood, based on the probability of income, that associated costs will be incurred. Management then ranks the probabilities in such a way that only those revenues deemed "highly" or "reasonably" likely to be secured are included in the projections, along with their associated costs. Actual events or results may differ materially from those anticipated in these forward-looking statements if known or unknown risks affect the companies' businesses, or if estimates or assumptions turn out to be inaccurate. Such risks and assumptions include, but are not limited to, the respective company's ability to develop, manufacture, and successfully commercialize value-added pharmaceutical products, the availability of funds and resources to pursue R&D projects, the successful and timely completion of clinical studies, the ability of the companies to take advantage of business opportunities in the pharmaceutical industry, uncertainties related to the regulatory process and general changes in economic conditions. You will find a more detailed assessment of the risks that could cause actual events or results to materially differ from current expectations on page 21 of ProMetic's Annual Information Form for the year ended December 31, 2007, under the heading "Risk Factors" as well as Abraxis' Annual Report on Form 10-K for the year ended December 31, 2007 and in other documents it has filed with the Securities and Exchange Commission. As a result, neither company can guarantee that any forward-looking statement will materialize. Each party assumes no obligation to update any forward-looking statement even if new information becomes available, as a result of future events or for any other reason, unless required by applicable securities laws and regulations.
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