VIMRX and Baxter Sign Definitive Agreement to Form New Cell Therapies Company.
As previously announced, VIMRX will have majority ownership of the yet-to-be named company, and Baxter will have minority ownership. The assets of Baxter's Immunotherapy Division, a global leader in ex vivo cellular therapies, will be transferred to the new company, including its patented cell selection, expansion and storage technologies. Baxter will continue the manufacturing, sales and distribution of the cancer-related cell therapy products for the new company.
The newly formed company's lead products will be the Isolex(R) 300i and the Isolex(R) 300SA Cell Selection Systems which are marketed in Europe. The Isolex(R) 300SA is currently under review with the U.S. Food and Drug Administration (FDA). The new company plans to advance current research and development programs through the aggressive development of cell growth, cell expansion and gene therapy applications and through industry partnerships intended to expand the current cell selection platform technology for other disease areas and potential uses.
"The formation of this new cell therapy company is a transforming business event for VIMRX: we gain a major industry partner, an immediate revenue-producing global product line with outstanding prospects for growth, and access to technology which is synergistic with our genetic research portfolio," said Richard L. Dunning, VIMRX president and chief executive officer. "We are very pleased to build this business venture with Baxter and welcome them as a major VIMRX shareholder."
"Over the past five years, the Immunotherapy Division has developed and commercialized the broadest and most effective platform of cell selection products," said John Osth, president of Baxter's Immunotherapy Division. "We believe our cell selection products represent an enabling technology that will allow physicians and researchers to create new therapeutic approaches to the treatment of cancer and other life threatening diseases. The objective of the new company will be to ensure access to these products to as many patients as possible, as well as to develop new cell therapy products which will take us into the next century."
Baxter's Immunotherapy Division generated gross revenues in excess of $9 million in 1996. Based on the strength of sales of the Isolex(R) 300 Magnetic Cell Selection System in Europe, the company projects that revenues will double within the next two years. Market potential for cell selection systems continues to grow as clinical data confirms the therapeutic utility of the technology.
The new company formed by Baxter and VIMRX will market cell selection systems in numerous countries outside of the U.S. and Europe, including Argentina, Hong Kong, Israel, New Zealand and Singapore. The Isolex system has exclusive status as an Orphan Device in Japan and a regulatory submission for market registration was recently made in that country. In addition, regulatory filings have been submitted in Australia and Canada.
The new company's global headquarters and employees will remain in Irvine, California, where Baxter's Immunotherapy Division is currently headquartered.
The selection of cells by immunoselection has broad utility in the development of cell therapies. Cell selection technology may be used by doctors in the treatment of various types of cancer, autoimmune, metabolic and genetic diseases. In the case of cancer, the Isolex(R) Magnetic Cell Selection System is used to isolate stem cells, the parent cells of all blood cells, from the blood or bone marrow. These cells may restore the patient's blood and immune systems, which may be impaired by disease or as a result of aggressive therapy, such as high-dose chemotherapy.
The Isolex(R) family of products include the Isolex(R)50 research device, the Isolex 300SA, and the fully automated Isolex 300i which simplifies cell selection through a proprietary closed-system technology for cell selection and cell washing. In addition to the Isolex(R) product line, the new company will acquire a number of other cell selection, expansion and storage products for use in the cell processing lab, including: the MaxSep(R) Cell Selection System, CFU Stem Cell Kit, Epimet Tumor Detection Kit, Lifecell(TM) Tissue Culture flasks, Cell Harvester device, Solution Transfer Pump, Cell Wash Set, and Cryocyte(TM) storage containers for freezing and storing blood components.
Future applications in the broad cell therapy market include HIV/AIDS and other infectious diseases, blood disorders, genetic diseases, autoimmune and inflammatory diseases, solid organ transplantation, metabolic disorders, central nervous system disorders, and burns, as well as bone and cartilage repair.
"We will take advantage of the Isolex(R) system's broad applicability by utilizing a diversity of specific antibodies that will permit selection and isolation of various cell populations having therapeutic potential in a number of diseases," said Dr. David A. Jackson, chief scientific officer of VIMRX. "Our next step, already underway, will be to develop an instrument system that permits automated, closed-system expansion of purified cells ex vivo by applying appropriate growth factors to provide larger quantities of desired cells. Once purified and expanded, these selected cells also can be genetically modified to provide additional therapeutic benefits."
Summary of Definitive Agreement
VIMRX will form a new company into which the assets of the Baxter Immunotherapy Division will be transferred. Baxter will receive 11 million VIMRX common shares and convertible preferred shares with a nominal value of $40 million. To the extent the 11 million common shares are worth less than $50 million at the closing, Baxter will receive additional convertible preferred shares. The conversion price for the preferred shares will be determined according to the closing prices of VIMRX's common stock within an 18-month period following the closing of the transaction, subject to a floor of $5.50 per share and a ceiling of $7.50 per share. In addition, Baxter will receive a 19.5% interest in the new company and warrants to purchase an additional 6% for $6 million. VIMRX will have majority ownership, or 80.5%, in the new company.
In addition, Baxter will provide $30 million and VIMRX will provide $10 million to the new company as initial operating funds. The new company will pay Baxter milestone payments, related to regulatory approvals, of up to $21 million over several years. Baxter will have one representative on the new company's board of directors. The close of the transaction is expected by year end 1997. At that time, a new company name will be introduced.
VIMRX Pharmaceuticals Inc.
VIMRX Pharmaceuticals Inc. (NASDAQ: VMRX), a biotechnology company based in Wilmington, Delaware, is comprised of a diverse portfolio of companies, technologies and compounds. Through its majority-owned affiliate, Innovir Laboratories, Inc. (NASDAQ: INVR), VIMRX is developing oligozymes which control disease-triggering flaws in individuals' genetic chemistry for potential use as both therapeutic agents and as pharmaceutical research tools. A collaborative partnership with Columbia University's Genome Center, VIMRX Genomics Inc. is focused on the commercialization of gene discoveries in cancer and other genetically based diseases. Three VIMRX compounds are in development: VIMRXyn(R), chemically synthesized hypericin, for the treatment of HIV, brain cancer, skin diseases, hepatitis C, and blood sterilization; VM201, a cardiovascular compound acquired from Columbia University, for selective inhibition of blood clotting to manage the bleeding risk associated with anti- coagulation; and VM301, a dermatological agent with wound healing potential.
Baxter Healthcare Corporation is the principal domestic operating subsidiary of Baxter International Inc.(NYSE:BAX). Baxter is a global medical-products and services company that is a leader in technologies related to the blood and circulatory system. Through its subsidiaries, Baxter has market-leading positions in four global businesses: biotechnology, which develops therapies and products for transfusion medicine; cardiovascular medicine, which develops products and services to treat late-stage cardiovascular disease; renal, which develops products and services to improve therapies to fight kidney disease; and intravenous systems and medical products, which develops technologies and systems to improve intravenous medication delivery. Baxter's Biotech Group is a global provider of products and services for blood component therapy, blood-volume replacement and the treatment of coagulation and immune disorders. Baxter has been a leader in blood therapy and transfusion medicine for more than 50 years.
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for certain forward-looking statements. The forward-looking statements contained in this release are subject to certain risks and uncertainties. Actual results could differ materially from current expectations. Among the factors which could affect the Company's actual results and could cause results to differ from those contained in the forward-looking statements contained herein are the success of the Company's clinical trials, delays in receiving FDA or other regulatory approvals and the development of competing therapies and/or technologies by other companies.
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CONTACT: Media Contacts:
Laura A. Mastrangelo
The Investor Relations Group
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|Date:||Oct 13, 1997|
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