ECOGEN TECHNOLOGIES I INC. RAISES $30 MILLION IN PRIVATE FINANCING TO FUND RESEARCH AND DEVELOPMENT THROUGH ECOGEN INC.
LANGHORNE, Pa., Jan. 29 /PRNewswire/ -- Ecogen Technologies I Inc. (ETech), an independent company organized by Ecogen, Inc. (NASDAQ: EECN), today announced the completion of a $30 million private financing. The money will be used to fund research and development programs on six biopesticide products licensed from Ecogen. Under terms of the financing, ETech has hired Ecogen to perform R&D services and Ecogen will have the right to buy back the product rights at pre- determined prices over the next three and a half years. "This $30 million financing, together with the recently announced $9.5 million agreement with Italy's 3A S.r.l., provides Ecogen with significant R&D funding over the next several years," said John E. Davies, chairman and chief executive officer of Ecogen. "It represents a critical part of Ecogen's on-going program to expand its product portfolio while at the same time covering the cost of the research and development expenses and maintaining access to commercialization rights." The funding will allow ETech to focus on commercializing six new biopesticide products using technology licensed from Ecogen. Target areas include biofungicide products for the control of powdery mildew and post harvest rot as well as bioinsecticide products for the control of corn rootworm, the European corn borer and insects which cause damage to turf and entomopathogenic nematodes to control soil-borne insects. The combined worldwide market of all the product areas is approximately $1 billion. In connection with the ETech funding, Ecogen issued 5-year warrants to investors, exercisable at $8.75 per share, to purchase up to three million shares of Ecogen common stock, and transferred to ETech enabling technologies to the covered product area. Ecogen retains the right to buy back the product rights by purchasing all outstanding ETech shares at premiums ranging from 125 percent to 200 percent above the amounts paid, depending upon when that right is exercised. Ecogen also retains worldwide rights to commercialize any resulting products for a fee based on net selling prices. The net proceeds from the offering are payable to ETech by investors in installments over a two year period. ETech intends to commercialize a fungal hyperparasite, initially identified by Ecogen Israel, to control powdery mildew, a disease that attacks plants, stunting growth and damaging crop yield. Powdery mildew is one of the most widespread plant diseases, affecting grapes, fruit and nut trees, vegetables, and flowering and ornamental plants. A product to combat the fungus is in the advanced stages of development and addresses a worldwide market of $560 - $640 million. ETech will also work to commercialize a genetically enhanced strain of Bacillus thuringiensis (Bt) to be used for the control of the corn rootworm, a soil pest, which feeds on the roots of corn plants. The corn rootworm control market is estimated to be $143 million worldwide. ETech also intends to commercialize Ecogen's patented, genetically altered strains of Bt to control the devastating European corn borer, one of the most difficult pests growers battle each year. The biopesticide's formulation is now in advanced stages and has an estimated market up to $80 million annually, depending on annual fluctuations in insect pressure. Entomopathogenic nematodes are microscopic roundworms that actively seek out and kill insect pests in the soil where 90 percent of all insects live a portion of their life cycle. ETech intends to commercialize several different nematodes for the control of insect pests and participe in a worldwide market approaching $350 million. Ecogen Inc. is an agricultural biotechnology company specializing in biological pest control. Ecogen has developed and is marketing a number of novel and proprietary biopesticides, including Cutlass(R) bioinsecticides for vegetables, and tree, nut and vine crops; Condor(R) bioinsecticides for vegetables, cotton and soybeans; Foil(R) potato bioinsecticide; Otinem(R) bioinsecticide and Collego(R) rice bioherbicide. The company recently expanded its product portfolio with the acquisition of Scentry, providing Ecogen with pheromone-based Bee- Scent(TM), Attract 'n' Kill(TM) and NoMate(R). The company is also developing products for corn, home/garden and ornamental use as well as biofungicides including products for the control of powdery mildew and post harvest rot diseases. (Cutlass, Condor, Foil Collego, Otinem, Bee-Scent, Attact'n' Kill and NoMate are trademarks of Ecogen, Inc.) -0- 1/29/93 /CONTACT: John E. Davies, chairman and CEO of Ecogen, Inc., 215-757-1590; Donald C. Weinberger of Strategic Growth International (investors), 212-826-9622; or Anthony J. Russo, Ph.D., of Noonan-Russo Communications, Inc., 212-979-9180, for Ecogen/ (EECN)
CO: Ecogen Technologies I Inc. ST: Pennsylvania IN: MTC SU: FNC
AH-TS -- NY021 -- 0684 01/29/93 10:44 EST
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|Date:||Jan 29, 1993|
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