SILVER SPRING, Md., March 27 /PRNewswire-FirstCall/ -- Lung Rx, Inc., a wholly-owned subsidiary of United Therapeutics Corporation , today announced that it has entered into an agreement with Toray Industries, Inc. ("Toray") to assume and restate the rights and obligations of the agreement entered into between United Therapeutics and Toray in June 2000 concerning the commercialization of modified release formulations of the cardiovascular medicine beraprost.
In connection with the restated and assumed Agreement, on March 17, 2007 United Therapeutics issued 200,000 shares of its common stock to Toray in exchange for the cancellation of Toray's existing right to receive an option grant to purchase 500,000 shares of United Therapeutics' common stock (the "Option Grant"). Under the June 2000 Agreement, Toray's right to receive the Option Grant was conditioned on Toray delivering adequate documentation of sustained release beraprost in humans and its transfer of clinical trial material, which delivery has not yet occurred. Had the Option Grant been made, the exercise price of the options would have been set at the average closing price of United Therapeutics' common stock for one month prior to the delivery date. Under the terms of the assumed and restated agreement, Toray has the right to request that United Therapeutics repurchase the newly-issued 200,000 shares of common stock upon thirty days prior notice at the price of $54.41 per share, which is the average closing price of United Therapeutics' stock between January 11, 2007 and February 23, 2007. Based on the closing price of United Therapeutics' stock on March 16, 2007, United Therapeutics will recognize a research and development expense of approximately $11.1 million in March relating to the issuance of the 200,000 shares since modified release beraprost has not yet obtained regulatory approval and currently has no alternative future uses.
Under the assumed and restated agreement, Toray will use its best efforts to deliver modified release beraprost documentation and clinical trial material to Lung Rx prior to the end of 2007 based, in part, on its recent application for approval of modified release beraprost in Japan.
"Beraprost has a clear and convincing mechanism of action," said Lewis J. Rubin, MD, Professor of Medicine and Director, Pulmonary Hypertension Program at University of California, San Diego School of Medicine, and Chairman of Lung Rx's Scientific Advisory Board. "I expect that many centers of excellence will want to participate in the clinical development of its modified release formulation."
"We are excited about bringing modified release beraprost to the pulmonary hypertension community," said Martine Rothblatt, Ph.D., Chairman and Chief Executive Officer of Lung Rx. "The tremendous pharmacogenomic variability in the patient population cries out for multiple unique molecules both beyond and within the prostacyclin class that includes beraprost."
United Therapeutics is a biotechnology company focused on the development and commercialization of unique products for patients with chronic and life- threatening cardiovascular, cancer and infectious diseases.
In addition to historical information, this press release contains forward-looking statements about the delivery by Toray Industries, Inc. of modified release beraprost documentation and clinical trial material to Lung Rx prior to the end of 2007 that are based on United Therapeutics' current beliefs and expectations as to future outcomes. These expectations are subject to risks and uncertainties such as those described in United Therapeutics' periodic reports filed with the Securities and Exchange Commission which may cause actual results to differ materially from anticipated results. Consequently, such forward-looking statements are qualified by the cautionary statements, cautionary language and risk factors set forth in United Therapeutics' periodic reports and documents filed with the Securities and Exchange Commission, including the company's most recent Form 10-K and Form 10-Q. United Therapeutics is providing this information as of March 27, 2007 and undertakes no obligation to publicly update or revise the information contained in this press release whether as a result of new information, future events or any other reason.
United Therapeutics Corporation