EDMONTON, May 26 /PRNewswire-FirstCall/ - Isotechnika Inc. (“Isotechnika” or the “Company”) announced today that it has entered into an agreement with Azimuth Opportunity Ltd. (“Azimuth”) for the establishment of a $40 million equity drawdown facility (the “Facility”). Under the Facility for a period of two years, Isotechnika Inc. may at its discretion, from time to time, sell common shares to Azimuth. Canaccord Capital Corporation has acted as Advisor to Isotechnika in connection with the Facility. The Common Share Purchase Agreement relating to the Facility has been filed by the Company on www.sedar.com.
Approximately 75% of the net proceeds from any sale of the securities under the Facility are intended to be used to fund the ongoing ISA247 psoriasis development program which includes a European Phase III clinical trial which is planned to commence in 2006, subject to the Company receiving regulatory approvals. The remaining 25% is expected to be used for working capital and general corporate purposes.
The terms of the Facility are as follows: 1. Isotechnika has the right, but not the obligation, to require Azimuth to purchase up to $40 million of Isotechnika common shares in a series of drawdowns (not to exceed 20 drawdowns) over a 24 month period commencing May 25, 2006 and ending May 25, 2008. 2. To exercise its drawdown rights, Isotechnika is required to deliver a drawdown notice to Azimuth specifying, among other things: - the minimum price (threshold price) at which Isotechnika is prepared to sell common shares; - for each drawdown the dollar amount of common shares that Isotechnika is prepared to sell (which may range from $500,000 up to $11 million); - the drawdown pricing period start date (not later than five trading days after delivery of the drawdown notice); and - the drawdown pricing period date (20 consecutive trading days commencing on the drawdown pricing period start date); 3. In conjunction with each drawdown, Isotechnika may permit Azimuth to purchase an additional dollar amount of common shares not to exceed the drawdown amount. 4. The maximum dollar amount of common shares that Azimuth is required to purchase under the terms of the Facility is $40 million and is subject to the limitations described below with the respect to the number of common shares issuable under the equity drawdown facility. 5. If and when Isotechnika gives a drawdown notice, Azimuth is obligated (subject to certain conditions) to purchase a pro rata portion (normally 1/20th) of the drawdown amount on each trading day during the drawdown pricing period on which the volume-weighted average trading price (VWAP) of Isotechnika common shares on the Toronto Stock Exchange exceeds the threshold price at a price per common share equal to the VWAP on the applicable trading day less a predetermined discount ranging from 4.5 to 7 per cent based on Isotechnika Inc.'s market capitalization. 6. Azimuth may elect, upon request by Isotechnika, to purchase a prescribed portion of any additional purchase amount specified in the drawdown notice on one or more trading days during the drawdown pricing period at a price per share equal to the greater of the VWAP on the trading day that Azimuth notifies Isotechnika of its election and the threshold price less the predetermined discount.
The number of common shares issuable under the terms of the equity drawdown facility and the selling restrictions are subject to the following:
1. Azimuth may not sell Isotechnika shares other than those that (i) it has accumulated to purchase under the agreement; or (ii) held in any accounts directly, or indirectly managed by Azimuth. 2. The number of common shares issuable under any single drawdown may not exceed 3.5 per cent of the number of the outstanding Isotechnika shares. 3. At no time may Azimuth beneficially own, directly or indirectly, 10 per cent or more of the outstanding Isotechnika common shares. 4. The total number of common shares issuable to Azimuth may not exceed 19.9 per cent of the common shares outstanding on May 24, 2006. 5. The number of common shares issued under the terms of the equity drawdown facility during any 12 month period, may not exceed 10 per cent of the number of common shares outstanding at the beginning of such 12 month period.
The terms of the equity drawdown are described in more detail in a prospectus supplement dated May 25, 2006, which Isotechnika has filed with the Alberta Securities Commission and the Ontario Securities Commission pursuant to the multi-jurisdictional disclosure system on www.sedar.com.
Dr. Randall Yatscoff, Isotechnika’s President and Chief Executive Officer, commented: “This equity financing provides us with the necessary funds on an as needed basis to advance our psoriasis clinical development program. The funds generated through the equity financing will be used initially to offset the cost of the pivotal Phase III European trial in which ISA247 will be compared to cyclosporine in moderate to severe psoriasis. This trial is required for regulatory and marketing purposes. We are very pleased to have Azimuth as a partner as they have backed a number of successful companies.”
About Isotechnika Inc. ----------------------
Isotechnika Inc. is an international biopharmaceutical company headquartered in Edmonton, Alberta, Canada. Drawing upon its expertise in medicinal chemistry and immunology, the Company is focused on the discovery and development of novel immunosuppressive therapeutics that are safer than currently available treatments. Its entrepreneurial management and world-class team of scientists are building a pipeline of immunosuppressive drug candidates for treatment of autoimmune diseases and for use in the prevention of organ rejection in transplantation. Isotechnika looks to become the leader in development of immunosuppressant therapies.
Isotechnika’s lead compound, ISA247 is an immunosuppressant currently in an extension protocol of a Canadian Phase III human clinical trial for the treatment of moderate to severe psoriasis. In addition, ISA247 has successfully completed a Phase IIa trial for kidney transplantation. The Company also has an additional immunosuppressive compound in its drug pipeline, TAFA93 which is in Phase I.
Isotechnika Inc. is a publicly traded company on the Toronto Stock Exchange under the symbol ISA. More information on Isotechnika can be found at www.isotechnika.com.
Forward-Looking Statements
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This press release may contain forward-looking statements. Forward- looking statements, including the Company’s belief as to the potential of its products, the Company’s expectations regarding the issuance of additional patents and the Company’s ability to protect its intellectual property, involve known and unknown risks and uncertainties, which could cause the Company’s actual results to differ materially from those in the forward- looking statements. Such risks and uncertainties include, among others, the availability of funds and resources to pursue research and development projects, the ability to economically manufacture its products, the potential of its products, the success and timely completion of clinical studies and trials, the Company’s ability to successfully commercialize its products, the ability of the Company to defend its patents from infringement by third parties, and the risk that the Company’s patents may be subsequently shown to be invalid or infringe the patents of others. Investors should consult the Company’s quarterly and annual filings with the Canadian commissions for additional information on risks and uncertainties relating to the forward- looking statements. Investors are cautioned against placing undue reliance on forward-looking statements.
Isotechnika Inc.
CONTACT: Dr. Randall Yatscoff, President & CEO, Isotechnika Inc., Phone:(780) 487-1600 ext. 246, Fax: (780) 484-4105, E-mail:ryatscoff@isotechnika.com; Dennis Bourgeault, Chief Financial Officer,Isotechnika Inc., Phone: (780) 487-1600 ext. 225, Fax: (780) 484-4105,E-mail: dbourgeault@isotechnika.com; Archived images on this organizationare searchable through CNW Photo Archive website athttp://photos.newswire.ca. Images are free to accredited members of themedia. To request a free copy of this organization’s annual report, pleasego to http://www.newswire.ca and click on Tools for Investors.