TORONTO, May 7 /CNW/ - Microbix Biosystems Inc. (TSX:MBX - News) announced today that it intends to spin off its Urokinase assets into a new private company, Klarogen Biotherapeutics Inc., which would become the sole commercial-scale manufacturer and supplier of the clot-busting drug after a proposed acquisition.
Microbix intends to transfer to Klarogen Biotherapeutics Inc., its Urokinase manufacturing facilities and equipment, worldwide commercial rights to all Urokinase therapeutic indications, and the associated staff and management.
Under the terms of a newly arranged letter of intent, Klarogen would purchase the Urokinase assets of ImaRx Therapeutics, Inc. of Tuscon, Arizona, (Nasdaq: IMRX - News) for $17 million. These assets would include ImaRx' remaining Urokinase inventory, the NDA (formerly known as Abbokinase(R), now known as Kinlytic (TM)) and the sales and marketing infrastructure. The Boards of Directors of both companies have approved a letter of intent to this effect.
The benefits of acquiring the inventory, sales and marketing infrastructure and NDA from ImaRx include:
- Klarogen would have full control of parceling out the existing
inventory - ensuring a smooth transition to when its manufacturing
plant becomes operational.
- Klarogen would be able to market directly to the pulmonary embolism
customer base using its own sales and marketing infrastructure, which
is far more profitable than through a partner.
- Working with an already FDA-approved product would accelerate the
timeline to commercial scale production.
A tier-one health care fund in New York is providing the $17 million in financing for the ImaRx inventory, sales and marketing infrastructure and NDA acquisition. This same health care fund will be the lead investor for Klarogen, providing up to an additional $13 million in financing to the newly created company. Under the proposed financing structure, Microbix will retain a majority equity stake in the newly created company.
Microbix estimates that the market opportunity for Urokinase is at least U.S. $500 million annually for indications including pulmonary embolism and catheter management, with growth in oncology and ophthalmology potentially larger than these first indications. Urokinase is an FDA-approved drug formerly marketed by Abbott under the brand name Abbokinase(R) and is now called Kinlytic. The product has been used to treat patients in the United States for over 20 years. The drug is currently listed on over 700 U.S. hospital formularies to treat pulmonary embolism and is also used by many oncology and dialysis clinics. Klarogen will be seeking approval for catheter clearance and catheter prophylaxis. In 1998, Abbott had Abbokinase sales of U.S. $300 million when it was approved for both catheter clearance and pulmonary embolism.
"Completing this deal will be a major step for Microbix. It will allow us to participate in the Urokinase opportunity with the least dilution to shareholders and the maximum upside potential in terms of return on our significant investment in this drug," said William J. Gastle, CEO of Microbix.
The most immediate important benefit to Microbix of the proposed spin-off would be to eliminate the expenditures caused by funding Urokinase directly. All future costs associated with the Urokinase project would become the responsibility of Klarogen, unburdening Microbix of the expensive clinical and development expenses required to complete this development. As well, Microbix would be generating revenue from the sales of required products and services to Klarogen.
The proposed acquisition of the ImaRx assets is contingent upon due diligence and the closing of the Klarogen financing. Further details will be provided on closing.
Microbix specializes in the development of biological technologies and commercializing them through global partners. The Company has intellectual property in large market biotherapeutic drugs, vaccine technologies and animal reproduction technologies. Established in 1988, Microbix is headquartered in Toronto.
This press release contains forward-looking statements, which are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements including, without limitation, the risks associated with: failure of the parties, including Klarogen and ImaRx to enter into a definitive agreement; failure of Klarogen to finance the acquisition from ImaRx; failure to develop and commercialize Urokinase on a timely basis or at all; failure to complete due diligence to the satisfaction of either or both parties; intellectual property risks such as failure to protect intellectual property rights or infringement of third party intellectual property rights; and general risks associated with the approval and commercialization of the technologies. These forward-looking statements represent the Companies' judgment as of the date of this press release. Additional risks and uncertainties related to ImaRx can be found in its filings with the U.S. Securities and Exchange Commission. This press release is as of May 7, 2008 and the Companies disclaim any intent or obligation to update these forward-looking statements.
For further information
visit www.microbix.com or contact: William J. Gastle, CEO, Microbix Biosystems Inc., (416) 234-1624 x 230
James Long, CFO, Microbix Biosystems Inc., (416) 234-1624 x 265
Source: Microbix Biosystems Inc.