Novopharm Biotech Announces Agreement On Restructuring Of Partnership Conversion Rights And Renewal Of Funding Commitment With Novopharm Limited.TORONTO--(BUSINESS WIRE)--May 14, 1998--Novopharm Biotech bi·o·tech n. Informal Biotechnology. biotech Noun short for biotechnology Noun 1. Inc. (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :NVO NVO no visible oestrus (see no visible estrus). Called also NVE. .) announced today that it has reached agreement with Novopharm Limited on the terms of a restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). of the conversion of Novopharm Limited's advances to Novopharm Biotech Partnership (" Partnership I") into common shares of the Company. Partnership I is the vehicle used by the Company to further its research and development efforts in therapeutic cancer products based on the Company's proprietary monoclonal antibody monoclonal antibody, an antibody that is mass produced in the laboratory from a single clone and that recognizes only one antigen. Monoclonal antibodies are typically made by fusing a normally short-lived, antibody-producing B cell (see immunity) to a fast-growing technology. Under the terms of the proposed restructuring agreement, Novopharm Limited will convert its advances to Partnership I at a price of $0.49 per share, as opposed to the $0.27 per share conversion price that was originally agreed to as part of Novopharm Limited's funding commitment in July 1995. Management estimates that the conversion of Novopharm Limited's advances to Partnership I will result in the issuance of approximately 57 million common shares. This represents a reduction of approximately 47 million common shares to be issued as compared to a conversion based on the original agreement price. In addition, Novopharm Limited will receive warrants, with a 5 year term, to acquire 8 million common shares on the filing with the FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. or the HPB HPB Health Promotion Board (Singapore) HPB Hrvatska Poštanska Banka (Croatian Post Bank) HPB Half Price Books (retail store) HPB High Ping Bastard of an NDA (Non Disclosure Agreement) An agreement signed between two parties that have to disclose confidential information to each other in order to do business. In general, the NDA states why the information is being divulged and stipulates that it cannot be used for any for a monoclonal antibody therapeutic product. Novopharm Limited has agreed to complete the restructuring of Partnership I in order to address market and minority shareholder concerns about the dilution Dilution A reduction in earnings per share of common stock that occurs through the issuance of additional shares or the conversion of convertible securities. Notes: Adding to the number of shares outstanding reduces the value of holdings of existing shareholders. associated with its conversion rights under Partnership I. The restructuring more closely aligns the conversion price of Novopharm Limited's Partnership I interest with market prices and therefore reduces the dilution associated with the conversion. Novopharm Limited has also agreed to continue its current funding arrangements with the Company through a partnership arrangement up to December 1999, for not less than $15 million of additional funding. Following the conversion of Novopharm Limited's interest in Partnership I, all of the Company's research and product development activities will be conducted through the new partnership arrangement. Losses of the partnership and tax credits available to the partnership up to the amount of Novopharm Limited's aggregate capital contributions will be allocated to Novopharm Limited and thereafter to the partners in proportion to their respective partnership interests. Profits of the partnership will be allocated first to Novopharm Limited to the extent of any losses and thereafter to the partners. Advances to the partnership will be converted into shares of the Company at a price of not less than $0.86 per share representing a 4.5 percent premium to the market price of the Company's shares at the time the price was fixed. Novopharm Limited will also receive 12 million warrants exercisable at $1.20 per share on or before December 31, 1999. Novopharm Limited currently holds approximately 34.8 million common shares of the Company, representing approximately 49.5 percent of the issued and outstanding common shares of the Company. Assuming that Novopharm Limited converts its interest in Partnership I on the basis described above and its interest in Novopharm Biotech Partnership II, and invests $15 million in the financing, there will be approximately 158 million common shares of the Company outstanding on a non-diluted basis, of which Novopharm Limited will hold approximately 115 million or 73 percent. On a fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis, Novopharm limited will hold approximately 68 percent of approximately 168 million outstanding common shares of the Company. The Company intends to use the net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). from the financing to continue clinical trials for both its antisense antisense, DNA or RNA manipulated in a laboratory so that its components (nucleotides) form a complementary copy of normal, or "sense," messenger RNA (mRNA; see nucleic acid). and monoclonal antibody therapeutic products, and to further its ongoing research and product development efforts with respect to its two lead antisense and monoclonal antibody products and generic biopharmaceutical products technology platform. The Company formed a special committee of independent directors, consisting of James Baillie and Murray Palay, to review the restructuring of Partnership I and the financing by Novopharm Limited. In its deliberations, the special committee considered, among other things, the matters described above and the advice of financial advisors and legal counsel. The special committee unanimously recommended approval of the restructuring and the Novopharm Limited financing to the Company's Board of Directors, based on its view that the transactions would be in the best interests of the Company. The restructuring of Partnership I and the financing by Novopharm Limited must also be approved by the Company's shareholders other than Novopharm Limited and its affiliates. Novopharm Biotech's mandate is to become a North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. leader in the development and commercialization of innovative and generic biopharmaceutical products. The Company is a publicly traded subsidiary of Novopharm Limited, one of Canada's largest generic pharmaceutical companies. CONTACT: Novopharm Biotech Incorporated Lance McIntosh, 416/291-8888 ext. 5521 |
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