BURNABY, BC, May 25 /PRNewswire-FirstCall/ -- Chromos Molecular Systems Inc. ("Chromos") (TSX:CHR) has entered into a Letter of Intent to acquire Targeted Molecules Corporation ("TMC"), a privately held San Diego based biotechnology company focused on the research and development of two antibody product candidates for treatment of multiple sclerosis and acute thrombosis.
"We are excited about the acquisition of TMC and their lead monoclonal antibody product candidates, which address significant markets in chronic inflammation and acute thrombosis," said Alistair Duncan, who will lead the combined company as President and CEO. "Not only will the ACE System be used to manufacture these and other products, but revenues generated by our cell engineering business will support the clinical development of these antibodies. We anticipate entering the clinic with our first product candidate in late 2006."
Under the terms of the proposed acquisition, Chromos will issue approximately 20.1 million common shares as consideration to TMC shareholders. The transaction, anticipated to close in July 2005, is subject to the completion of satisfactory due diligence, execution of definitive agreements, a California fairness hearing, the approval of Chromos shareholders, the approval of TMC's shareholders, and other customary conditions such as regulatory approval.
Bridge Loan Facility
During the acquisition process and the refocusing of the Company's product development programs, existing shareholders of TMC and Chromos have provided a bridge financing facility to Chromos of up to $1,500,000. The proceeds of the facility will be used to fund operations of Chromos until the definitive agreement is finalized and the acquisition closes.
Chromos will issue up to $1,500,000 of secured promissory notes. The notes will be convertible on the closing of the acquisition or at the option of the holder on maturity, into units of Chromos at a conversion price of $0.175 per unit (a "Unit"). Each Unit will consist of one common share and one and a half common share purchase warrants. Each whole warrant will entitle the holder to acquire one additional common share for a period of 24 months from the date of conversion at an exercise price of $0.25 per share.
The notes will be repayable on the earlier of six months from the date of advance or the date on which Chromos advises that it will not proceed with the acquisition.
The Company's current funds on hand, amounts due from partners and funds available through the bridge loan facility are expected to be sufficient to fund operations to December 2005.
With the Company's near term therapeutic focus shifting to the development of the TMC monoclonal antibody products from the cell therapy arena, Dr. Phillip Maples, Vice President, Clinical Development and Manufacturing has resigned his position in order to pursue his interest in the development of cellular and gene therapies.
Chromos is a cellular engineering and therapeutics company creating value through engineering production quality cell lines for the manufacture of biopharmaceuticals, and the development of innovative biological therapies for a variety of debilitating diseases. Chromos is achieving these objectives with its ACE System (Artificial Chromosome Expression) and REM (Rapid Expansion Method) technologies. In the near term, Chromos will focus on continued commercialization of the ACE System for engineering cell lines. To date Chromos has entered into corporate partnerships related to cell line engineering with partners including Pfizer Inc., Centocor, Inc. and Cambridge Antibody Technology. In addition, the Company has a strategic alliance with AppTec to provide customers with a complete range of cell line development and manufacturing services.
About Targeted Molecules Corporation (TMC)
TMC is focused on the advancement of its two humanized monoclonal antibodies for applications in multiple sclerosis and acute thrombosis. Both Selective Adhesion Molecule Inhibitors (SAMIs) have extensive preclinical validation including comparisons with molecules that have achieved successful results in clinical trials.
FOR FURTHER INFORMATION:
Kathryn Hayashi, CA
Vice President, Finance
Chromos Molecular Systems Inc.