VANCOUVER, BRITISH COLUMBIA--(Marketwired –May 26, 2015) – Vaxil Bio Ltd. (“Vaxil”) and Emerge Resources Corp. ("Emerge") (TSX VENTURE:EME) are pleased to announce that they have entered into a Letter of Intent pursuant to which Emerge is expected to acquire 100% of the issued and outstanding common shares of Vaxil, an Israeli cancer immunotherapy company listed on the Tel Aviv Stock Exchange (the "Proposed Transaction"). Vaxil is the 100% owner of an Israeli private company, Vaxil BioTherapeutics, which carries out the company's R&D and owns the Intellectual Property.
It is expected that the combined entity, after completion of the Proposed Transaction (the "Resulting Issuer"), will qualify as a Tier 2 Technology Issuer pursuant to the requirements of the TSX Venture Exchange (the "Exchange").
The Proposed Transaction is an arm's length transaction. It is intended that the Proposed Transaction shall take place by way of an amalgamation, arrangement, share exchange or other similar form of transaction. Once the structure is determined, the letter of intent will be superseded by a definitive agreement between Vaxil and Emerge, and the parties will announce the signing of such definitive agreement and its principal terms by news release. The Proposed Transaction will be considered a Change of Business and Reverse Takeover for Emerge, as such term is defined in Exchange Policy 5.2.
For the purposes of the merger, Emerge will have a deemed value of approximately $2 million and Vaxil will have a deemed value of approximately $6.3-million.
The Proposed Transaction will be supported by a $3 million - $5 million concurrent equity financing led by Sunel Securities Inc.
All currency references herein refer to Canadian dollars unless otherwise noted.
BUSINESS OF VAXIL
Summary
Vaxil is a clinical stage biotech company developing novel immunotherapeutic drugs to treat cancer. Vaxil has developed a proprietary enabling technology ("VaxHit”) which enables it to identify and develop products to treat cancer (and which can also be applied to treatment for Infectious diseases) via manipulation of the patient’s immune system. The company's lead product ImMucin is due to enter Phase II clinical trials (below).
Early Clinical Proof of Concept
Vaxil has already successfully executed a Phase-I/II study with its lead product ImMucin in 15 Multiple Myeloma ("MM") patients. According to the US National Cancer Institute, MM is the second most frequent, yet still incurable, hematologic cancer in the US . This study focused on patients who were experiencing a gradual re-emergence of their disease following a period of remission. Following treatment with ImMucin, stable disease or improvement, persisting for 17.5-45 months (still on-going) was achieved in 11 out of the15 patients enrolled in the study.
ImMucin was recently granted an Orphan drug designation in MM by the European Medicines Agency, which demonstrates both the unmet medical need for treatments for this disease, and the novelty of ImMucin's approach. ImMucin is also being evaluated in a second Phase I/II study in metastatic breast cancer patients. Vaxil is now planning a full-fledged IND approved Phase-II in MM Patients.
Market Overview
Cancer Immunotherapeutic technologies are coming to the forefront of cutting edge cancer management approaches. Unlike current therapies such as chemotherapy, immunotherapeutic products like ImMucin are expected to be much less toxic, more selective to specific cancers, and more likely to delay or prevent the recurrence of the disease.
Experienced Leadership
Vaxil’s experienced team is led a highly accomplished and seasoned PhD scientist, Dr. Lior Carmon. Dr. Carmon is an expert in the fields of immunology and cancer with an in depth understanding of the science, business and market trends of cancer immunotherapy.
Prior to founding Vaxil, Dr. Carmon was involved in several successful Israeli biotech companies including, being General Manager at Ester Neurosciences Ltd, a company that was acquired by Amarin Corp.
Dr. Carmon was also a co-founder of CureTech Ltd. and of BioKine Therapeutics Ltd., two companies in the field of immune modulation and immunotherapy.
Prior thereto Dr. Carmon was Vice President at Clal Biotechnology Industries (CBI), Israel’s largest life sciences investment fund. Dr. Carmon currently serves as a board member of the Israeli immunology society (IIS). He received his Ph.D. in tumor Immunology from the Weizmann Institute and his MBA from the School of Management at Ben-Gurion University, Israel. Dr. Carmon is currently the CEO and head of R&D of Vaxil and is expected to serve as the Head of R&D and Interim CEO of the Resulting Issuer.
Innovative Therapy & Intellectual Properties
Vaxil is the sole owner of its Intellectual property.
Financial Information
According to its publicly available IFRS-compliant audited financial statements, Vaxil has expended approximately $9million to-date on advancing its intellectual properties and clinical trials.
ADDITIONAL TERMS OF THE PROPOSED TRANSACTION
Concurrent Financing
It is a condition of closing of the Proposed Transaction that the parties complete a concurrent equity financing for minimum gross proceeds of $3 million (inclusive of an anticipated minimum $300,000 subscription by Vaxil).
In that regard, the parties have retained Sunel Securities Inc. as lead agent in a best efforts private placement of subscription receipts of Emerge (the "Offering") at an anticipated offering price of $0.133 per subscription receipt. Each unit is expected to be comprised of one common share of the Resulting Issuer and one common share purchase warrant.
Proceeds from the Offering will be used for growth, research and development, and general working capital purposes.
The Offering is expected to close into escrow by June 30, 2015. The net proceeds of the Offering will be deposited with a third party escrow agent and released to the Resulting Issuer upon a successful closing of the Proposed Transaction.
Board of Directors
The Board of Directors of the Resulting Issuer will be comprised of five individuals, of whom three (including the Chairman) will be nominated by Vaxil and two will be nominated by Emerge.
Name Change
It is intended that the Resulting Issuer will be renamed "Vaxil Immuno-Oncology" or "Vaxil Bio" or such other name as the parties may reasonably agree upon, and the Resulting Issuer will be governed by the Ontario Business Corporations Act.
Sponsorship
Emerge intends to make an application to the Exchange for an exemption from the sponsorship requirements in connection with the Proposed Transaction. There is no assurance that such exemption will be granted. Trading in the shares of Emerge is presently halted. It is uncertain whether the shares of Emerge will resume trading until the Proposed Transaction is completed and approved by the Exchange.
Conditions to closing the Proposed Transaction
The completion of the Proposed Transaction and the Offering are subject to the approval of the Exchange and all other necessary approvals. The completion of the Proposed Transaction is also subject to certain other additional conditions precedent, including, but not limited to: (i) the entering into of a definitive agreement by Emerge and Vaxil (the "Definitive Agreement"); (ii) completion of satisfactory due diligence by each of Emerge and Vaxil; (iii) the approval of the Proposed Transaction by each of Vaxil’s and Emerge’s respective board of directors; (iv) the approval of the shareholders of Vaxil and Emerge; (v) completion of the Offering into escrow by June 30, 2015 or such later date as may be agreed by the parties; (vi) approval from the Exchange to list the Resulting Issuer's shares; (vii) Approval of the Israeli regulatory authorities (including but not limited to the tax authorities, Chief Scientist's Office,) and the Israeli Courts (viii) the absence of any material change or change in a material fact which might reasonably be expected to have a material adverse effect on the financial and operational conditions or the assets of each of the parties to the Definitive Agreement; and (ix) certain other conditions typical in a transaction of this nature. All information contained in this news release with respect to Emerge and Vaxil was supplied by the parties respectively, for inclusion herein, and Emerge and its directors and officers have relied on Vaxil for any information concerning it.
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It is expected that the combined entity, after completion of the Proposed Transaction (the "Resulting Issuer"), will qualify as a Tier 2 Technology Issuer pursuant to the requirements of the TSX Venture Exchange (the "Exchange").
The Proposed Transaction is an arm's length transaction. It is intended that the Proposed Transaction shall take place by way of an amalgamation, arrangement, share exchange or other similar form of transaction. Once the structure is determined, the letter of intent will be superseded by a definitive agreement between Vaxil and Emerge, and the parties will announce the signing of such definitive agreement and its principal terms by news release. The Proposed Transaction will be considered a Change of Business and Reverse Takeover for Emerge, as such term is defined in Exchange Policy 5.2.
For the purposes of the merger, Emerge will have a deemed value of approximately $2 million and Vaxil will have a deemed value of approximately $6.3-million.
The Proposed Transaction will be supported by a $3 million - $5 million concurrent equity financing led by Sunel Securities Inc.
All currency references herein refer to Canadian dollars unless otherwise noted.
BUSINESS OF VAXIL
Summary
Vaxil is a clinical stage biotech company developing novel immunotherapeutic drugs to treat cancer. Vaxil has developed a proprietary enabling technology ("VaxHit”) which enables it to identify and develop products to treat cancer (and which can also be applied to treatment for Infectious diseases) via manipulation of the patient’s immune system. The company's lead product ImMucin is due to enter Phase II clinical trials (below).
Early Clinical Proof of Concept
Vaxil has already successfully executed a Phase-I/II study with its lead product ImMucin in 15 Multiple Myeloma ("MM") patients. According to the US National Cancer Institute, MM is the second most frequent, yet still incurable, hematologic cancer in the US . This study focused on patients who were experiencing a gradual re-emergence of their disease following a period of remission. Following treatment with ImMucin, stable disease or improvement, persisting for 17.5-45 months (still on-going) was achieved in 11 out of the15 patients enrolled in the study.
ImMucin was recently granted an Orphan drug designation in MM by the European Medicines Agency, which demonstrates both the unmet medical need for treatments for this disease, and the novelty of ImMucin's approach. ImMucin is also being evaluated in a second Phase I/II study in metastatic breast cancer patients. Vaxil is now planning a full-fledged IND approved Phase-II in MM Patients.
Market Overview
Cancer Immunotherapeutic technologies are coming to the forefront of cutting edge cancer management approaches. Unlike current therapies such as chemotherapy, immunotherapeutic products like ImMucin are expected to be much less toxic, more selective to specific cancers, and more likely to delay or prevent the recurrence of the disease.
Experienced Leadership
Vaxil’s experienced team is led a highly accomplished and seasoned PhD scientist, Dr. Lior Carmon. Dr. Carmon is an expert in the fields of immunology and cancer with an in depth understanding of the science, business and market trends of cancer immunotherapy.
Prior to founding Vaxil, Dr. Carmon was involved in several successful Israeli biotech companies including, being General Manager at Ester Neurosciences Ltd, a company that was acquired by Amarin Corp.
Dr. Carmon was also a co-founder of CureTech Ltd. and of BioKine Therapeutics Ltd., two companies in the field of immune modulation and immunotherapy.
Prior thereto Dr. Carmon was Vice President at Clal Biotechnology Industries (CBI), Israel’s largest life sciences investment fund. Dr. Carmon currently serves as a board member of the Israeli immunology society (IIS). He received his Ph.D. in tumor Immunology from the Weizmann Institute and his MBA from the School of Management at Ben-Gurion University, Israel. Dr. Carmon is currently the CEO and head of R&D of Vaxil and is expected to serve as the Head of R&D and Interim CEO of the Resulting Issuer.
Innovative Therapy & Intellectual Properties
Vaxil is the sole owner of its Intellectual property.
Financial Information
According to its publicly available IFRS-compliant audited financial statements, Vaxil has expended approximately $9million to-date on advancing its intellectual properties and clinical trials.
ADDITIONAL TERMS OF THE PROPOSED TRANSACTION
Concurrent Financing
It is a condition of closing of the Proposed Transaction that the parties complete a concurrent equity financing for minimum gross proceeds of $3 million (inclusive of an anticipated minimum $300,000 subscription by Vaxil).
In that regard, the parties have retained Sunel Securities Inc. as lead agent in a best efforts private placement of subscription receipts of Emerge (the "Offering") at an anticipated offering price of $0.133 per subscription receipt. Each unit is expected to be comprised of one common share of the Resulting Issuer and one common share purchase warrant.
Proceeds from the Offering will be used for growth, research and development, and general working capital purposes.
The Offering is expected to close into escrow by June 30, 2015. The net proceeds of the Offering will be deposited with a third party escrow agent and released to the Resulting Issuer upon a successful closing of the Proposed Transaction.
Board of Directors
The Board of Directors of the Resulting Issuer will be comprised of five individuals, of whom three (including the Chairman) will be nominated by Vaxil and two will be nominated by Emerge.
Name Change
It is intended that the Resulting Issuer will be renamed "Vaxil Immuno-Oncology" or "Vaxil Bio" or such other name as the parties may reasonably agree upon, and the Resulting Issuer will be governed by the Ontario Business Corporations Act.
Sponsorship
Emerge intends to make an application to the Exchange for an exemption from the sponsorship requirements in connection with the Proposed Transaction. There is no assurance that such exemption will be granted. Trading in the shares of Emerge is presently halted. It is uncertain whether the shares of Emerge will resume trading until the Proposed Transaction is completed and approved by the Exchange.
Conditions to closing the Proposed Transaction
The completion of the Proposed Transaction and the Offering are subject to the approval of the Exchange and all other necessary approvals. The completion of the Proposed Transaction is also subject to certain other additional conditions precedent, including, but not limited to: (i) the entering into of a definitive agreement by Emerge and Vaxil (the "Definitive Agreement"); (ii) completion of satisfactory due diligence by each of Emerge and Vaxil; (iii) the approval of the Proposed Transaction by each of Vaxil’s and Emerge’s respective board of directors; (iv) the approval of the shareholders of Vaxil and Emerge; (v) completion of the Offering into escrow by June 30, 2015 or such later date as may be agreed by the parties; (vi) approval from the Exchange to list the Resulting Issuer's shares; (vii) Approval of the Israeli regulatory authorities (including but not limited to the tax authorities, Chief Scientist's Office,) and the Israeli Courts (viii) the absence of any material change or change in a material fact which might reasonably be expected to have a material adverse effect on the financial and operational conditions or the assets of each of the parties to the Definitive Agreement; and (ix) certain other conditions typical in a transaction of this nature. All information contained in this news release with respect to Emerge and Vaxil was supplied by the parties respectively, for inclusion herein, and Emerge and its directors and officers have relied on Vaxil for any information concerning it.
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