"Our shareholders will benefit from owning 100% of Tekmira and will still have an equity position in INEX," Ruane said. "Tekmira will be debt free and have a diversified product portfolio including the significant partnerships with Hana Biosciences, Inc. and Alnylam Pharmaceuticals, Inc. We believe this provides much greater value to our shareholders than our previous Tekmira spin-out plans."
Under the previous plan of arrangement that was approved 98.3% by a shareholder vote January 26, 2006, INEX's Targeted Immunotherapy technology platform and associated products and some cash were to be transferred to Tekmira and 69% of Tekmira shares were to be distributed to INEX common shareholders.
Highlights of the revised Plan of Arrangement: - All of the pharmaceutical assets from INEX's two technology platforms, Targeted Chemotherapy and Targeted Immunotherapy, would be transferred to Tekmira; - All of INEX's cash would be transferred to Tekmira; - INEX's pharmaceutical partnerships with Hana Biosciences, Inc. and Alnylam Pharmaceuticals, Inc. would be transferred to Tekmira; - 100% of Tekmira shares would be distributed to INEX common shareholders; and - INEX's current management team and employees will join Tekmira and assume the same positions they occupy in INEX.
Completion of this revised plan would allow INEX, having no pharmaceutical assets, to complete a financing with an investor group led by Sheldon Reid, a co-founder of Energy Capitol Resources Ltd. ("Investor Group"). The Investor Group will invest up to $5.6 million in INEX by way of convertible debentures. Upon conversion of the debenture following the completion of the reorganization, the Investor Group will hold 100% of non-voting shares in INEX and 80% of the total number of shares outstanding. Therefore, current INEX common shareholders will own 20% of the equity of INEX after the spin-out of Tekmira. The Investor Group plans to raise additional capital and acquire a new business for INEX.
The money received by INEX as part of the corporate reorganization will be paid to the previous holders of INEX's convertible debt as per the note purchase and settlement agreement announced June 20, 2006.
The conditions to closing the reorganization and the spin-out of Tekmira include the completion of due diligence by the Investor Group, the transfer of all assets and liabilities to Tekmira, and approvals from shareholders, the Toronto Stock Exchange and the Supreme Court of British Columbia. INEX anticipates mailing an information circular to shareholders in August 2006 and intends to complete a shareholder meeting in September 2006.
Product pipelines
INEX has two pipelines of novel products, Targeted Chemotherapy and Targeted Immunotherapy. The three products in the Targeted Chemotherapy pipeline, Marqibo, INX-0125 (sphingosomal vinorelbine) and INX-0076 (sphingosomal topotecan), have been licensed to Hana. Hana is responsible for all future development and future expenses. Hana anticipates initiating pivotal trials for Marqibo in the second half of 2006 and initiating phase 1 clinical trials for INX-0125 in 2006 and for INX-0076 in 2007. INEX is supporting Hana to ensure the products can be advanced as quickly as possible and is being reimbursed for this support.
INEX is also using its liposomal delivery technology in collaboration with Alnylam Pharmaceuticals, Inc. (NASDAQ: ALNY - News) to evaluate the systemic delivery of Alnylam's RNAi therapeutics. This collaboration is evaluating multiple targets including apolipoprotein B (apoB), a protein involved in cholesterol metabolism. The INEX and Alnylam agreement will build on preliminary data published by Alnylam and its collaborators in Nature, the leading international journal of science, showing that the systemic delivery of an apoB RNAi therapeutic significantly reduced blood cholesterol levels.
Under the terms of the agreement, Alnylam has the option to execute a global exclusive license for specific RNAi therapeutic targets. The license agreement would include upfront license fees, future milestone payments and royalties as the products are commercialized. Alnylam also has the right to expand the option to negotiate license terms for additional targets.
Under the Targeted Immunotherapy platform, INEX's lead internal product candidate is INX-0167. INX-0167 is based on the encapsulation of immunostimulatory oligonucleotides (short sequences of nucleic acids) in liposomes and combines the immunostimulatory properties of certain oligonucleotides into a single synthetic particle. Preclinical studies have demonstrated that INX-0167 enhances the number and potency of certain immune cells, including natural killer (NK) cells. The resultant increase in NK cell activity is important for the enhancement of the potency of monoclonal antibodies through a mechanism known as antibody-dependent cell mediated cytotoxicity (ADCC). INEX recently published promising preclinical data on INX-0167 at the Annual Meeting of the American Association of Immunologists held May 12-16, 2006 showing INX-0167 can generate a potent immune response in non-human primates. INEX anticipates initiating formal toxicology studies in the fourth quarter of 2006 to initiate a phase 1 clinical trial in the second half of 2007.
About INEX
INEX is a Canadian biopharmaceutical company developing and commercializing proprietary drugs and drug delivery systems to improve the treatment of cancer. Further information about INEX and this news release can be found at www.inexpharm.com.
Forward Looking Statements
There are forward-looking statements contained herein that are not based on historical fact, including without limitation statements containing the words "believes," "may," "plans," "will," "estimate," "continue," "anticipates," "intends," "expects," and similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. Such factors include, among others, Inex's stage of development, lack of product revenues, additional capital requirements, risks associated with the completion of clinical trials and obtaining regulatory approval to market Inex's products, the ability to protect its intellectual property and dependence on collaborative partners. These factors should be considered carefully and readers are cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future results, events or developments.
INEX's common shares are traded on the Toronto Stock Exchange under the trading symbol "IEX".
CONTACT: Investors: Ian Mortimer, Vice President, Finance and Chief Financial Officer, Phone: (604) 419-3200, Email: info@inexpharm.com, Website: www.inexpharm.com; Media, Karen Cook Boas, James Hoggan & Associates Inc., Phone: (604) 739-7500, Email: kcook@hoggan.com
Source: Inex Pharmaceuticals Corporation
