Acquires all Urokinase inventory, sales infrastructure and the
FDA-approved NDA from ImaRx Therapeutics
TORONTO, Sept. 24 /CNW/ - Microbix Biosystems Inc. (TSX:MBX) announced today that it has completed a $2.5 million acquisition of all Urokinase assets from ImaRx Therapeutics, Inc. of Tucson, Arizona, (Nasdaq: IMRX).
These assets include ImaRx' remaining Urokinase inventory, the regulatory approval to market the product formerly known as Abbokinase(R) (now rebranded as Kinlytic(TM)), key raw materials for Urokinase manufacture, and the corresponding sales and marketing infrastructure. With this acquisition, the Company has assumed full title and control of this clot-busting drug, a significant benefit to Microbix and its shareholders.
The acquired inventory has been pending US FDA product inventory release since receipt of a May 2008 approvable letter. FDA requested additional product characterization data to allow a dating extension of this key medical product. "We are committed to working diligently with the FDA to address issues related to the approvable letter for Urokinase," said Dr. Kenneth Hughes, Microbix Vice President of Scientific Affairs.
Upon receiving FDA release of the Urokinase inventory, a further US $2.5 million bonus will be paid to ImaRx. The acquired inventory will have a retail value of more than US $35M once released by the FDA. Sales for 2007 were over $10 million. Microbix intends on selling the Kinlytic(TM) inventory over the period before its own manufactured Kinlytic(TM) product is released by the FDA. Microbix intends to market the product directly in the future.
The benefits of this acquisition to Microbix, and its shareholders, are the following:
- Immediately accretive with generation of significant new revenue and free cash flow beginning in 2009; - Diversification of Microbix' revenue and cash flow stream; - Control of an FDA approved drug for a large market opportunity for currently unmet medical needs; - Potential to expand the drug's indications into larger markets such as catheter clearance, oncology and ophthalmology; - Use an already FDA-approved product to accelerate Urokinase production at its facility in Toronto.
"With this acquisition, Microbix becomes a full scale commercial biopharmaceutical company with an established revenue base," said William J. Gastle, Chairman and CEO of Microbix. He went on to say, "The acquisition of Urokinase represents a transfer of control that will ensure long-term availability of a very important drug,"
"Assuming release of the acquired inventory, Microbix will substantially increase its revenues in 2009, thereby ensuring meaningful free cash flow. The diversification and upsizing of the revenue stream is a positive critical step for Microbix. In this regard, we are very excited by the benefits that Urokinase brings to our existing multi-product initiatives," Mr. Gastle said.
Urokinase (Kinlytic(TM)) is an FDA-approved drug formerly marketed by Abbott under the brand name Abbokinase(R). The product has been used to treat patients in the United States for over 30 years. It is currently listed on over 700 U.S. hospital formularies to treat pulmonary embolism and is also used in oncology and dialysis clinics.
Microbix will also be seeking approval for additional indications in biomedical catheter clearance. In 1998, Abbott had Abbokinase(R) sales of U.S. $300 million, when it was approved for both catheter clearance and pulmonary embolism. The facility in Toronto has capacity to produce up to $100 million in sales.
"Completing this deal is a major step for Microbix. It will allow us to participate in the Urokinase opportunity with the least dilution to shareholders and the maximum potential upside," said Mr. Gastle.
Associated with this acquisition the Company completed a Cdn $2.5 million debenture financing in a non-arms length transaction with an existing shareholder. The financing is in the form of a 9% convertible secured 20 year debenture, convertible on the basis of one (1) common share for each $0.65 principal converted and prepayable by the Company in cash before September 10, 2010 upon the Company issuing 1,923,077 common shares at a deemed price of $0.65 per share. The additional $2.5 million bonus payment will be made using a new line of credit from the Company's commercial bank, which is being guaranteed by the Export Development Corporation, Canada.
Microbix specializes in the development of biological technologies and commercializing them through global partners. The Company has intellectual property in large market biotherapeutic drugs, vaccine technologies and animal reproduction technologies. Established in 1988, Microbix is headquartered in Toronto.
This press release contains forward-looking statements, which are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements including, without limitation the risks associated with: regulatory risks including failure to obtain FDA release of the inventory; failure to manufacture its own product and have that product approved for the market, or that approval comes before the inventory runs out; delays in achieving commercial scale Urokinase production; failure to achieve significant sales of Urokinase; competition from alternatives to Urokinase in targeted markets; and difficulties of obtaining approval for additional indicators for Urokinase.
These forward-looking statements represent the Company's judgment as of the date of this press release. Additional risks and uncertainties related to ImaRx can be found in its filings with the U.S. Securities and Exchange Commission. The Company disclaims any intent or obligation to update these forward-looking statements.
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