VIMRX and Baxter sign letter of intent to form new cell therapies business.WILMINGTON, Del. and DEERFIELD, Ill.--(BUSINESS WIRE)--June 12, 1997-- VIMRX Attains Majority Ownership in Baxter's Immunotherapy Division Including Revenue-Generating Global Product Line Alliance Allows Baxter to Expand Scope and Commitment to Cell Selection Technology VIMRX Pharmaceuticals Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : VMRX) and Baxter Healthcare Corporation, the principal U.S. operating subsidiary of Baxter International Inc. (NYSE NYSE See: New York Stock Exchange : BAX), today announced that they have signed a letter of intent to form a new cell therapy company to develop innovative treatments for cancer and other life-threatening diseases. This strategic alliance will combine Baxter's ex vivo ex vivo /ex vi·vo/ (eks´ ve´vo) outside the living body; denoting removal of an organ (e.g., the kidney) for reparative surgery, after which it is returned to the original site. cellular selection and storage business with VIMRX's access to genomics technology to create a leading, comprehensive ex vivo cell and gene therapies enterprise. Baxter is marketing its patented cell selection technology in Europe and is awaiting marketing clearance from the U.S. Food and Drug Administration (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. ). VIMRX and Baxter will form a new company, yet to be named, into which will be transferred the assets of Baxter's Immunotherapy Division. VIMRX will hold a majority ownership position in the new company and Baxter will hold a minority ownership position. Baxter will have one representative on the new company's board of directors. Baxter will maintain its active participation in the cell selection business through the manufacture, sales, marketing and distribution of cancer-related cell therapy products for the new company. Baxter's Immunotherapy Division, which generated gross revenues in 1996 in excess of $9 million, was established in 1991 and is a global leader in ex vivo cellular therapies. It has developed a portfolio of leading-edge products for use in cell selection and storage. These technologies focus on the isolation and storage of specific populations of human cells for therapeutic use in cancer and other diseases. "This alliance with VIMRX demonstrates our commitment to bringing state-of-the-art cellular therapies to people with cancer. It will enable us to build on our cell selection platform to develop innovative therapies for other life-threatening diseases," said Timothy B. Anderson, Baxter group vice president of the company's Biotech Group. "VIMRX offers access to advanced cellular and genomic technologies and financial resources that will allow us to go beyond cell selection and storage into the important new arenas of cell expansion and manipulation, including gene therapy for genetic diseases of the blood and immune systems." "The strategic alliance with Baxter, a major global medical products company, dramatically transforms VIMRX from solely a research and development company to a fully integrated commercial enterprise with a valuable and growing product line with current revenues and outstanding growth prospects," said Richard L. Dunning, president and chief executive officer of VIMRX. "The cellular therapy expertise of the new company offers both VIMRX and Baxter technological leadership with the clear potential to create a new class of medical products--well-defined populations of therapeutically active human cells. This alliance also establishes strong synergies with our existing portfolio of technologies and products." The new company and employees will reside at the current global headquarters of Baxter's Immunotherapy Division in Irvine, California. Technology Overview The separation 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. Baxter's lead product in this field, the Isolex(R) 300 magnetic cell-separator system, is used to isolate stem cells stem cells, unspecialized human or animal cells that can produce mature specialized body cells and at the same time replicate themselves. Embryonic stem cells are derived from a blastocyst (the blastula typical of placental mammals; see embryo), which is very young , the parent cells of all blood cells blood cells, n.pl the formed elements of the blood, including red cells (erythrocytes), white cells (leukocytes), and platelets (thrombocytes). blood cells See erythrocyte and leukocyte. Platelets are classed separately. , from the blood. Stem cell stem cell In living organisms, an undifferentiated cell that can produce other cells that eventually make up specialized tissues and organs. There are two major types of stem cells, embryonic and adult. selection is a process that isolates and purifies the cells, found in the bone marrow and peripheral blood cell Peripheral blood cells are the cellular components of blood, consisting of red blood cells, white blood cells, and platelets, which are found within the circulating pool of blood and not sequestered within the lymphatic system, spleen, liver, or bone marrow. populations, that may have therapeutic utility. These cells may restore the patient's blood and immune systems, which may be impaired by disease or as a result of aggressive therapy. In clinical trials, the stem cells are reinfused into cancer patients in an effort to rebuild their immune systems following high-dose chemotherapy high-dose chemotherapy Oncology The administration of chemotherapeutics in excess of BM toxicity; given the risk of aplastic anemia, HDC requires autologous BMT and use of 'rescue' factors such as G-CSF, GM-CSF, and erythropoietin. See Bone marrow transplantation. . In addition to the Isolex product line, Baxter will provide the new company with other cell selection, expansion and storage products for use with this instrument system, as well as research programs currently focused primarily on cell therapies for oncology. Future applications in the broad cell therapy market include HIV/AIDS HIV/AIDS Human Immunodeficiency Virus/Acquired Immune Deficiency Syndrome and other infectious diseases, blood disorders blood disorders, n.pl hematologic dyscrasias that affect the component cells and plasma elements of the blood. They are generally divided into two broad groups: those in which an increase in bulk occurs (e.g. , genetic diseases, autoimmune and inflammatory diseases, solid organ transplantation The transfer of organs such as the kidneys, heart, or liver from one body to another. The transplantation of human organs has become a common medical procedure. Typical organs transplanted are the kidneys, heart, liver, pancreas, cornea, skin, bones, and lungs. , metabolic disorders, central nervous system disorders Nervous system disorders A satisfactory classification of diseases of the nervous system should include not only the type of reaction (congenital malformation, infection, trauma, neoplasm, vascular diseases, and degenerative, metabolic, toxic, or deficiency , burns and bone and cartilage repair. Regulatory Approval Baxter currently is seeking marketing clearance from the FDA for its Isolex system, which uses patented CD34 selection technology. The Biological Response Modifiers biological response modifiers, n.pl substances such as phytochemicals and fibers that modulate mech-anisms related to the development of disease, such as hormonal changes, immune function, inflammatory activity, oxidative stress, and home-ostasis. Committee for the FDA is expected to schedule a review of the Isolex application during its July 24 meeting. The Isolex system was approved for sale in Europe in 1995 and currently is used in a significant share of the cell selection procedures in this region. Baxter also sells the product in numerous other countries, including Argentina, Hong Kong, Israel, New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. and Singapore. The Isolex system has exclusive status as an Orphan Device in Japan and regulatory submission was recently made in that country. In addition, regulatory filings have been submitted in Australia and will be submitted in Canada in the third quarter of this year. Terms Stated in Letter of Intent VIMRX will obtain majority ownership (approximately 80%) in the new company in exchange for 11 million VIMRX common shares and convertible preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. with a nominal value Nominal Value The stated value of an issued security that remains fixed, as opposed to its market value, which fluctuates. Notes: When referring to fixed-income securities, the nominal value is also the face 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 provide $20 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 retain its exclusive license to the CD34 antibody used in selection technology and sublicense it to the new company. Baxter will have one representative on the new company's board of directors. The terms included in the letter of intent are subject to the signing of a definitive agreement and approval by the VIMRX and Baxter boards of directors and the VIMRX shareholders, which is expected to occur in the third quarter of 1997. 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 to aid in gene function analysis and drug discovery target validation. In March, VIMRX Genomics Inc. was formed as a collaborative partnership with Columbia University's Genome Center to commercialize gene discoveries. In addition, three compounds are in development: VIMRXyn(R), a chemically synthesized hypericin hy·per·i·cin n. A drug, produced synthetically or as an extract of Saint John's wort, used as an antidepressant and antiviral agent. hypericin studied for the treatment of HIV HIV (Human Immunodeficiency Virus), either of two closely related retroviruses that invade T-helper lymphocytes and are responsible for AIDS. There are two types of HIV: HIV-1 and HIV-2. HIV-1 is responsible for the vast majority of AIDS in the United States. , brain cancer, hepatitis C Hepatitis C Definition Hepatitis C is a form of liver inflammation that causes primarily a long-lasting (chronic) disease. Acute (newly developed) hepatitis C is rarely observed as the early disease is generally quite mild. , and blood sterilization; VM201, a cardiovascular compound recently acquired from Columbia University, that selectively inhibits blood clotting blood clotting, process by which the blood coagulates to form solid masses, or clots. In minor injuries, small oval bodies called platelets, or thrombocytes, tend to collect and form plugs in blood vessel openings. so as to manage the bleeding risk associated with anti-coagulation; and VM301, a dermatological agent thlogies related to the blood and circulatory system circulatory system, group of organs that transport blood and the substances it carries to and from all parts of the body. The circulatory system can be considered as composed of two parts: the systemic circulation, which serves the body as a whole except for the . 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 ision and immune disorders. The Immunotherapy Division develops products and services for ex vivo cellular therapies used in the treatment of cancer and other life-threatening diseases. Baxter has been a leader in blood therapy and transfusion medicine for more than 40 years. The Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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. NOTE TO INVESTORS AND EDITORS: VIMRX's press releases are available on the Internet through www.vimrx.com and through BusinessWire's web site at http://www.businesswire.com . The releases also are available at no charge through BusinessWire's fax-on-demand service at 800-411-8792. CONTACT: Media Contacts: VIMRX Pharmaceuticals Laura A. Mastrangelo 302-998-1734 or Baxter International Deborah Spak 847-948-2349 Investor Contacts: VIMRX Pharmaceuticals Laura A. Mastrangelo 302-998-1734 or Baxter International Mary Kay Ladone 847-948-3371 |
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