TEMPE, Ariz., Feb. 28 /PRNewswire-FirstCall/ -- OrthoLogic Corp. today announced the formation of a strategic alliance with Quintiles, the world’s leading pharmaceutical services organization, to develop and commercialize Chrysalin(R) (TP508), OrthoLogic’s novel synthetic peptide.
Under the terms of the agreement, Quintiles will be OrthoLogic’s exclusive provider of clinical research services within its range of capabilities for the development of Chrysalin. Quintiles also will have the right of first negotiation to promote Chrysalin, upon its approval by the FDA, with a specialty sales force under a fee-for-service or a risk-based structure.
The agreement also calls for Quintiles PharmaBio Development, the strategic partnering group of Quintiles Transnational Corp., to make an equity investment in OrthoLogic of up to $5.0 million. This will consist of an initial $2.0 million investment in OrthoLogic common stock and two additional investments, at OrthoLogic’s election, of $1.5 million each at the end of the second and third quarters of 2006. OrthoLogic will issue warrants equal to 13% of the equity investment exercisable at a premium of 15% of the stock price at the closing of the deal, as well as incentive-based warrants for up to 240,000 shares, which will vest upon achievement of certain milestones.
“We are excited about this alliance, given Quintiles’ extensive global capabilities, impressive drug development experience and deep understanding of biotech companies’ unique needs,” stated James M. Pusey, MD, Chief Executive Officer of OrthoLogic. “The financial and resource commitment from Quintiles is significant for OrthoLogic. Together we are focused on the aggressive development of Chrysalin and the strategic potential of OrthoLogic as a biopharmaceutical company.”
“This alliance demonstrates Quintiles’ ability to provide a tailored package of financial and development solutions to help biotechs succeed,” said C.G. “Chip” Gillooly, Global Vice President of Quintiles’ Emerging Biotech, a specialized unit dedicated to helping biotech companies. “We are eager to work with OrthoLogic to expand their biopharmaceutical operations, accelerate the development of Chrysalin, and enhance their strategic alternatives for increasing shareholder value.”
Under the alliance, OrthoLogic will control all decisions on development and commercialization activities for Chrysalin. Quintiles representatives will serve on a Joint Development Committee that will drive planning for the Chrysalin program.
Conference Call
The Company will host a live conference call and webcast today at 8:30 am EST to discuss the transaction. The conference call may be accessed by dialing 888-396-2298 for domestic callers, and 617-847-8708 for international callers, and providing the passcode 92377985. The webcast may be accessed by visiting the Investor Relations section of the Company’s Web site, www.orthologic.com, and will be available for 30 days.
A replay of the call will be available beginning February 28, 2006, at 10:30 am EST until March 13, 2006. To access the replay, please dial 888-286-8010 for domestic callers and 617-801-6888 for international callers and provide the passcode 23482215.
About OrthoLogic
OrthoLogic is a biotechnology company focused on the development and commercialization of the novel synthetic peptide Chrysalin(R) (TP508) in two lead indications, both of which represent areas of significant unmet medical need -- fracture repair and diabetic foot ulcer healing. Based on the Company’s pioneering scientific research of the natural healing cascade, OrthoLogic has become a leading company focused on tissue and bone repair. The Company owns exclusive worldwide rights for Chrysalin.
OrthoLogic is committed to developing a pipeline of novel peptides and other molecules aimed at helping patients with equally under-served conditions. The Company has an exclusive worldwide license to the novel pre-clinical 24-amino acid peptide AZX100, the first of a new class of compounds in the field of smooth muscle relaxation called Intracellular Actin Relaxing Molecules, or ICARMs(TM). AZX100 is currently being investigated for medically and commercially significant applications, such as the treatment of vasospasm associated with subarachnoid hemorrhage, the prevention of keloid scarring and the treatment of asthma.
OrthoLogic’s corporate headquarters are in Tempe, Arizona. For more information, please visit the Company’s Web site: www.orthologic.com.
About Quintiles
Quintiles is a global leader in pharmaceutical services. The Company strives to improve healthcare worldwide by providing quality professional expertise, market intelligence and innovative partnering solutions to the pharmaceutical, biotechnology and healthcare industries. Quintiles has 16,000 specialized employees and offices in 50 countries. For more information visit the Company’s Web site at www.quintiles.com.
Statements in this press release or otherwise attributable to OrthoLogic regarding our business that are not historical facts are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which include the timing and acceptability of FDA filings and the efficacy and marketability of potential products, involve risks and uncertainties that could cause actual results to differ materially from predicted results. These risks include: delays in obtaining or inability to obtain FDA, institutional review board or other regulatory approvals of preclinical or clinical testing; unfavorable outcomes in our preclinical and clinical testing; the development by others of competing technologies and therapeutics that may have greater efficacy or lower cost; delays in obtaining or inability to obtain FDA or other necessary regulatory approval of our products; our inability to successfully and cost effectively develop or outsource manufacturing and marketing of any products we are able to bring to market; changes in FDA or other regulations that affect our ability to obtain regulatory approval of our products, increase our manufacturing costs or limit our ability to market our products; our possible need for additional capital in the future to fund the continued development of our product candidates; and other factors discussed in our Form 10-K for the fiscal year ended December 31, 2004 our Form 10-Q for the quarter ended September, 30, 2005, and other documents we file with the Securities and Exchange Commission.
OrthoLogic Corp.
CONTACT: Media, Lauren Tortorete of Biosector 2, +1-212-845-5609,ltortorete@biosector2.com, for OrthoLogic Corp.; or Investors, MelanieFriedman of Stern Investor Relations, +1-212-362-1200, melanie@sternir.com,for OrthoLogic Corp.
