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LIDAK PHARMACEUTICALS AUTHORIZES REPLACEMENT OF ESCROWED SECURITIES

 LA JOLLA, Calif., July 19 /PRNewswire/ -- LIDAK Pharmaceuticals (NASDAQ: LDAKA) announced today that its directors have granted options to purchase 3,843,750 common shares to certain current employees, consultants and directors and the two original outside investors of the company. The option price of $3.56 per share was the closing price on July 16, 1993 the day before the date of grant.
 These options have been granted to replace 3,843,750 shares of presently issued common stock and shares underlying options all of which were subject to cancellation on Dec. 31, 1993. If all of the options are exercised, the company will receive proceeds of approximately $13.7 million. The options will expire on the 10th anniversary of the date of issuance. All shares underlying these options will be registered under the Securities Act of 1933.
 The grantees either purchased, or were granted options to purchase, 3,843,750 shares of class B common stock at the time of the organization of the company or shortly thereafter. As a condition of the initial public offering in May 1990, these grantees deposited their shares and options into an escrow account. Under the terms of the escrow agreement, which has a designated final closing date of Dec. 31, 1993, all escrowed securities could be released to the original owners of such shares and options only upon achievement of one of several designated milestones. Since the milestone of a $3.00 price per share of common stock by May 8, 1993 was narrowly missed, the grantees faced the loss of their escrowed this year.
 The directors also authorized issuance of 1,500,000 shares of class A common stock to replace the same number of shares of convertible series A preferred stock issued to the Medical Biology Institute (MBI) at the time the company was organized as partial consideration for licensed technologies obtained through an exclusive licensing agreement between MBI and the company. The Institute deposited these shares, along with those of individual shareholders, into the same escrow account subject to the same conditions of possible forfeiture. This issuance will restore MBI's equity position as originally provided by this exclusive licensing agreement. In consideration of this new issuance, MBI will grant LIDAK an additional 5 year extension to the term of their exclusive technology rights. In addition, MBI will postpone by five years LIDAK's obligation to pay minimum royalties in the amount of $100,000 per year. The shares issued to MBI will not be registered.
 LIDAK Pharmaceuticals is developing pharmaceutical products for the health care industry. LIDAK is currently focusing its efforts on the commercialization of LIDAKOL(TM) as a treatment for herpes and other indications. Also, the company is developing its large multivalent immunogen (LMI) technology for potential new therapies against cancer and viral diseases.
 -0- 7/19/93
 /CONTACT: Michael H. Lorber, vice president and CFO of Lidak Pharmacu?ticals, 619-558-0364, or Fern Lazar or Kate de Santis of Dewe Rogerson, 212-688-6840, for Lidak Pharmaceuticals/
 (LDAKA) CO: LIDAK Pharmaceuticals ST: California IN: MTC SU:


LG-OS -- NY080 -- 3206 07/19/93 15:53 EDT
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Publication:PR Newswire
Date:Jul 19, 1993
Words:516
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