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WORCESTER, Mass., Feb. 13 /PRNewswire/ -- Cambridge Biotech Corporation announced today that it has entered into a settlement agreement with the plaintiffs in a class action lawsuit filed against the company and several of its former officers. The parties have submitted the settlement agreement for approval by the United States District Court for the District of Massachusetts.

"Settling the class action lawsuit moves us an important step forward in our reorganization process," said Alison Taunton-Rigby, Ph.D., President CEO of Cambridge Biotech. "As part of the reorganization effort, we plan to sell our diagnostic business and focus on our core biopharmaceutical operations. We have active discussions ongoing with a number of companies concerning the sales of our diagnostic operations, and when those discussions are completed, we plan to file our reorganization plan. We are enthusiastic about our future as a new biopharmaceutical company developing vaccines, adjuvants and immunotherapy products." Dr. Taunton-Rigby noted that the success or timing of company efforts to sell the diagnostic business cannot be predicted.

Cambridge Biotech's biopharmaceutical business develops and commercializes therapeutic and prophylactic vaccines for infectious diseases and immunotherapeutics for cancer. The company's product development programs include partnered efforts to develop new vaccines containing QS-21 and other novel Stimulon(TM) adjuvants as well as proprietary efforts to develop human vaccines for streptococcal pneumonia, malaria, and tick-borne diseases. For the animal health market, the company is developing vaccines for canine Lyme disease and bovine mastitis.

Under the agreement, the settlement class will receive approximately 25% of the equity of a new biopharmaceutical company, which will be formed under the Cambridge Biotech Corporation Chapter 11 reorganization plan, and $1,050,000 in cash from an insurance policy covering the individual defendants. In general, the settlement class includes purchasers who bought the company's common stock between February 28, 1992 and May 9, 1994. The settlement agreement also provides for reimbursement under the same insurance policy of up to $100,000 for legal fees and expenses of individual officers and directors to the extent permitted by law.

The class action lawsuit, which began in November 1993, alleged that the company and certain individuals had violated Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 by disseminating materially false and misleading information to the public causing them to purchase the company's stock at artificially inflated prices between February 28, 1992 through May 9, 1994. The company denied the plaintiffs' allegations of wrongdoing. On July 7, 1994, the company filed for protection under Chapter 11 of the United States Bankruptcy Code.

The settlement agreement is subject to approval by the District Court and confirmation by the Bankruptcy Court for the District of Massachusetts, Western Division, of a plan of reorganization to be submitted by the company.

Cambridge Biotech Corporation, which filed for protection under Chapter 11 of the U.S. Bankruptcy Code on July 7, 1994, is a therapeutics and diagnostics company focusing on infectious diseases and cancer. The company is developing and commercializing therapeutic and prophylactic vaccines for infectious diseases and immunotherapeutics for cancer. The company's therapeutics business includes the Stimulon(TM) family of adjuvants, the most advanced of which, QS-21, is in clinical development through corporate and academic partners, and proprietary vaccines. The proprietary vaccines include a feline leukemia vaccine currently on the market, and vaccines in development in the areas of tick-borne diseases, streptococcal pneumonia, malaria, bovine mastitis and canine Lyme disease. Cambridge Biotech's diagnostic business is primarily focused on retroviral, Lyme and enteric diseases.
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/CONTACT: Alison Taunton-Rigby, President & Chief Executive Officer of Cambridge Biotech Corp., 508-797-5777 or Robert Gottlieb, Senior Vice President of Feinstein Partners, 617-577-8110/

CO: Cambridge Biotech Corporation ST: Massachusetts IN: MTC SU:

DD -- NETU029 -- 6741 02/13/96 16:05 EST
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Publication:PR Newswire
Date:Feb 13, 1996
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