TORONTO, March 1, 2006 -- ARIUS Research Inc. (TSX-V: ARI) announced today that it has successfully completed the first tranche of its previously announced private placement of units for gross proceeds of US$21.5 million on February 28, 2006. Each unit consists of one common share and one common share purchase warrant exercisable at a price of CDN$1.00 for a period of five years following closing. The main subscribers to the private placement, which included investors from the United States, Canada and the United Kingdom, were funds advised by OrbiMed Advisors, LLC (> "> OrbiMed> "> ) Xmark Opportunity Funds, Ltd. (> "> Xmark> "> ) and Efficacy Capital, Ltd. (> "> Efficacy> "> ). A second tranche of the private placement is expected to close shortly.
The private placement was arranged by a syndicate of agents, co-led by Dundee Securities Corporation and Loewen, Ondaatje, McCutcheon Limited and including Canaccord Capital Corporation. Under the terms of the offering, ARIUS issued units at a price of CDN$0.80 per unit. The agents received a cash commission equal to 7% of the aggregate gross proceeds as well as broker warrants exercisable for a period of 24 months for a number of shares and warrants equal to 6.5% of the number of shares and warrants issued in the context of the private placement, at a price of CDN$0.80 for one share and one warrant, with the warrants being exercisable at a price of CDN$1.00 for a period of five years from the date of the closing of the private placement. The shares and warrants issued at closing and any shares which will be issued by the ARIUS upon exercise of such warrants will be subject to a four-month hold period expiring on June 28, 2006.
In consideration of their participation under the private placement, ARIUS entered into an investor rights agreement with OrbiMed, Xmark and Efficacy, which agreement includes certain restrictive covenants; a right to proportional representation of up to 50% on the Board of Directors of ARIUS, subject to election by shareholders; rights of first refusal with respect to certain sales of common shares; and a right of participation in respect of certain future issuances of securities of ARIUS.
With the completion of the private placement, OrbiMed becomes an additional control entity by virtue of holding 14,418,750 common shares or 35.2% of the issued and outstanding common shares of the Company. Assuming the 14,418,750 warrants for the additional common shares issuable to OrbiMed are exercised, this would represent, 35.7% of the issued and outstanding common shares of the Company on a fully diluted basis. Prior to closing, the offering was approved by written consent of a majority of the disinterested holders of common shares of ARIUS.
In connection with the closing of the private placement, Dan Andersen has stepped down from the Board of Directors after serving as a member for six years. Joining the Board of Directors, effective immediately, will be Carl L. Gordon, General Partner of OrbiMed, and Mitchell D. Kaye, Chief Investment Officer of Xmark.
The Company will hold a Special Meeting of Shareholders on March 28, 2006 for purposes of obtaining the approval of the amendments to the by-laws in accordance with the terms of the investor rights agreement and for electing the members of the board of directors of ARIUS.
Dr. David S. Young, President and C.S.O. of ARIUS, commented: > "> We are pleased by the very strong support for this offering. The proceeds will give ARIUS the financial resources to develop our anti-cancer antibodies internally and retain more of the value that we will build into them. I want to welcome the new investors and Board members, who share our vision for ARIUS. I would also like to thank Dan Andersen, who has been associated with ARIUS since its inception, for his dedication and insight. We are appreciative that he has agreed to remain as an advisor to the Board to continue to make his experience available to us.
With the completion of the first tranche of this financing, ARIUS now has 40,998,834 common shares issued and outstanding. The securities marketed in this offering have not been, and will not be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or any applicable exemption from the registration requirement of such Act. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
About ARIUS Research
ARIUS Research Inc. is a biotechnology company dedicated to personalizing cancer therapy through the discovery and development of novel anticancer monoclonal antibodies (MAbs). Established in 1999, ARIUS has built a proprietary technology platform, FunctionFIRST> (tm)> , that rapidly identifies powerful MAbs targeting a variety of cancer indications. This antibody generation engine has enabled ARIUS to assemble a growing pipeline, which is used for commercial collaborations and in-house development. ARIUS has ongoing partnerships with key biotechnology and drug development companies. The company is listed on the TSX Venture Exchange under the symbol > "> ARI> "> .
Forward-Looking Statement
Certain statements in this news release constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, which involve known and unknown risks, uncertainties and other factors that may cause our actual results to be materially different from any future results, performance or achievements expressed or implied by such statements. Forward-looking statements in this release include, but are not limited to, ARIUS successfully advancing its new product programs as well as licensing opportunities. These statements are only predictions and actual events or results may differ materially. Factors that could cause such actual events or results expressed or implied by such forward-looking statements to differ materially from any future results expressed or implied by such statements include, but are not limited to: early stage of development; technology and product development; dependence on and management of current and future corporate collaborations; future capital needs; uncertainty of additional funding; no assurance of market acceptance; dependence on proprietary technology and uncertainty of patent protection; intense competition; manufacturing and market uncertainties; and government regulation. These and other factors are described in detail in the company> '> s Annual Report, forthcoming news releases and other filings with Canadian securities regulatory authorities available at www.sedar.com. Forward-looking statements are based on our current expectations and ARIUS is not obligated to update such information to reflect later events or developments.
Website: www.ariusresearch.com
For further information, contact: David S. Young President & Chief Scientific Officer Telephone: (416) 862-2323 Ext. 222