>> Nexia Announces Agreement to Sell All Assets Associated With Protexia(R) to PharmAthene, Inc.
Thursday January 6, 6:13 pm ET
Special meeting of shareholders on February 28, 2005 to consider approval of transaction and reduction of stated capital
MONTREAL, Jan. 6 /PRNewswire-FirstCall/ - Nexia Biotechnologies Inc. ("Nexia") (TSX: NXB - News) today announced the signing of an asset purchase agreement providing for the sale of substantially all its operations and assets related to Protexia® (recombinant human butyrylcholinesterase) to a wholly-owned subsidiary of PharmAthene, Inc. ("PharmAthene"), a privately held biotechnology company focused on the development of biodefense therapeutics, based in Annapolis, Maryland, in consideration for
- US$18 million in cash and Series C Convertible Preferred Shares ("Series C Shares") of PharmAthene at about US$0.91 per share,
- warrants to acquire Series C Shares (in an amount equal to 30% of the number of Series C Shares to be issued to Nexia) exercisable at about US$0.91 per share and expiring in February 2008 ("US$0.91 Warrants") and
- warrants to acquire common shares of PharmAthene (in an amount equal to 18% of the number of Series C Shares to be issued to Nexia) (subject to reduction if certain milestones are met as specified) exercisable at US$0.01 per share and expiring in October 2014 ("US$0.01 Warrants"), in each case, determined as described below.
PharmAthene will offer employment to substantially all of Nexia's employees and will assume certain liabilities related to the transferred assets. Nexia will retain its current cash on hand, short-term investments and tax credit recoverables. Nexia will also retain assets associated with its BioSteel® program, which it intends to divest.
"Having examined available options, the Board of Directors has decided that shareholders will be best served through the sale of substantially all of Nexia's assets" said Mr. William C. Garriock, Nexia's Chairman of the Board, who also added: "While the Board of Directors believes in the long-term potential of the Protexia® program, given Nexia's limited financial resources and the uncertain prospect of raising additional capital in the current environment, it is important that shareholders be provided with the opportunity to consider this proposal."
"We are enthusiastic about this opportunity to strengthen our biodefense portfolio and develop this critical therapeutic to provide a treatment for military personnel and civilians in the event of a chemical weapons attack. Protexia® is an essential product for soldiers and citizens which has been made possible by the vision, ingenuity, and impressive development work by the people at Nexia", said David P. Wright, President & CEO of PharmAthene.
Nexia's activities, after the transaction, will be essentially limited to overseeing its investment in PharmAthene. Accordingly, Nexia intends to reduce to the fullest extent possible the size of its board of directors and its management structure. In particular, Dr. Jeffrey D. Turner and Mr. Dana L. Rath will resign as President and CEO and Vice President Finance and Administration respectively. In addition, Nexia will cease to meet certain listing requirements of the TSX, including the requirement to carry on an active business. Therefore, Nexia intends to apply to transfer its listing to NEX. NEX is an open auction market on which trading takes place using the same electronic system as the TSX Venture Exchange.
ABOUT PHARMATHENE
PharmAthene, Inc. is a privately-held biotechnology company dedicated to the rapid development of biotherapeutics to address biological pathogens and chemicals that may be used as weapons of bioterror. Two products are currently in preclinical development for Bacillus anthracis (anthrax). ToxBlox(TM), a therapeutic anti-toxin for treatment of symptomatic patients infected with anthrax and MDX-1303 (in collaboration with Medarex, Inc.), a fully human, high affinity monoclonal antibody for pre- and post-exposure prophylaxis and a therapy for symptomatic patients.
PharmAthene recently announced the closing of a US$50 million Series B Convertible Preferred Share financing. The transaction was led by MPM Capital ( www.mpmcapital.com ) and co-led by Bear Stearns Health Innoventures ( www.healthinnoventures.com ). HealthCare Ventures ( www.hcven.com ) also participated in the financing and thereby increased its pre-existing US$15 million investment in PharmAthene.
For more information on PharmAthene, please visit www.pharmathene.com .
ABOUT NEXIA
Nexia develops and manufactures complex recombinant proteins in the milk of transgenic goats for medical applications. Nexia's strength is producing proteins that cannot be made commercially using other recombinant systems. Nexia's lead product is Protexia®, which is funded by a tripartite development consortia consisting of Nexia, and the U.S. and Canadian militaries.
Protexia®, which is recombinant human butyrylcholinesterase, is being developed as a military prophylaxis and as a post-exposure therapy for civilian casualties in the event of a potential chemical nerve agent terrorist attack. Protexia®'s capability as a medical countermeasure has been demonstrated in vivo to protect animals from multiple lethal doses of a broad spectrum of nerve agent chemical weapons. <<
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