EDMONTON, Canada, November 16, 2010 /PRNewswire/ -- Isotechnika Pharma Inc. ("Isotechnika" or the "Corporation") today announced that it has entered into a Development, Distribution and License Agreement (the "DDL") with ILJIN Life Science Co., Ltd ("ILJIN") for the further clinical and commercial development of voclosporin for use in transplant indications applicable to voclosporin. Under the DDL in exchange for ILJIN funding the Corporation to perform a single Phase 3 clinical trial in kidney transplantation through a combination of a license fee of $5 million USD and the purchase, in three tranches, of Common Shares from treasury (the "Private Placement"), the Corporation has granted to ILJIN an exclusive license to voclosporin for transplant and autoimmune indications for the US and other regions outside of Canada, Israel, South Africa, Europe, China, Taiwan and Hong Kong. The Corporation retains the rights over voclosporin in Europe for future development and commercialization. The Corporation will also use reasonable commercial efforts to facilitate the appointment to the board of directors of the Corporation (the "Board") of two (2) nominees of ILJIN. The DDL becomes effective on the date on which all conditions and approvals required under the DDL (including shareholder and regulatory approval, including the approval of the Toronto Stock Exchange (the "TSX"), of the Private Placement) have been satisfied (the "Effective Date").
Pursuant to various agreements between the Corporation and Paladin Labs Inc. ("Paladin"), Paladin holds the patents and patent applications relating to voclosporin, third party manufacturing and supply contracts, the right to develop voclosporin in certain countries and the right to supply the Corporation with its required bulk voclosporin. In order to support the proposed transaction with ILJIN, Paladin has agreed to amend those agreements (the "Paladin Amendments") in order to transfer to the Corporation certain ownership and rights in and to all voclosporin patents and patent applications and Paladin held voclosporin know-how and improvements to voclosporin as of the Effective Date. Paladin has also entered into an agreement with ILJIN to sell 12,500,000 Common Shares of Isotechnika to ILJIN at closing.
ILJIN will purchase 90,700,000 Common Shares of the Corporation in three tranches as per the table below.
Private Closing Date Number of Subscription Price per Placement Shares Amount Share Tranche First 30 business days after the Effective Date 11,500,000 $2,375,000 $0.207 USD USD Second On or before the first anniversary of the Effective Date 39,600,000 $8,500,000 $0.215 USD USD Third On or before the second anniversary of the Effective Date 39,600,000 $9,000,000 $0.227 USD USD
Because greater than 25% of the current outstanding Common Shares will be issued pursuant to the Private Placement, the rules of the TSX require that the Corporation obtain Shareholder approval of the Private Placement and the Corporation is calling and plans to hold a special meeting (the "Meeting") of shareholders as soon as practically possible, which meeting is expected to be held on, or about, December 15, 2010.
"The additional funding by ILJIN for the voclosporin program in transplantation and in particular the initiation of a global Phase 3 clinical trial in transplant is a significant milestone in the future commercialization of voclosporin," stated Dr. Robert Foster, President and CEO. "We are very excited to have ILJIN Life Science Co., Ltd. as a partner. ILJIN Life Science Co., Ltd. is a member company of the ILJIN Group, a global conglomerate based in Seoul, South Korea, which last year had approximately US$2 billion of revenue."
The Board reviewed the DDL and Private Placement transactions and concluded that the proposed transaction with ILJIN provides:
1. the means to advance the development of voclosporin through a Phase 3 trial in transplantation;
2. a unique opportunity for the Corporation to actively obtain 50% of net profit for the sale of voclosporin in the US, and 50% of net profit for the sale of voclosporin in other countries in which ILJIN directly commercializes voclosporin, which is significantly greater than standard royalty rates of 10-15% of net profit; and
3. a viable opportunity for the stakeholders in the Corporation to better realize the full value of the Corporation's voclosporin asset.
The Board has approved the DDL, the Private Placement and the Paladin Amendments and will be recommending that shareholders approve the transactions with ILJIN and vote in favour of the Private Placement.
"We are very pleased to announce our investment in Isotechnika and the transplant field," said Daniel S. Park, Executive Vice President of ILJIN Life Science Co., Ltd. and ILJIN Group. "We believe this is a significant opportunity for ILJIN to expand its business in the life sciences field."
In addition the Board has resolved to amend the by-laws of the Corporation to lower the minimum ratio of directors of the Corporation that have to be resident Canadians to both assist in accommodating its commitment to ILJIN to appoint two nominees to the Board and to match the existing residency requirements set forth in the Business Corporations Act (Alberta) (the "ABCA").
At the Meeting, shareholders will be asked to confirm the amendment to the by-laws made by the directors to require that only one quarter (1/4) of the directors be resident Canadians as is the minimum requirement in the ABCA and that the by-laws of the Corporation be amended to remove the requirement that the Board shall not transact business at a meeting, other than filling a vacancy in the Board, unless at least half of the directors present are resident Canadians.
As well shareholders will be asked to vote in favour of the election of ILJIN nominees at the Meeting and such other nominees as may be required in order for the Board to comply with the residency requirements of the ABCA, all of which will be set forth in the Information Circular that will be sent to shareholders for purposes of the Meeting.
The Corporation is pleased to announce that Dr. Jing Lou, Co-founder, Chief Executive Officer and a director of Isotechnika's partner, 3SBio, Inc., has joined the Board effective November 9, 2010 filling the vacancy created by the earlier resignation of David MacNaughtan. The Corporation also announces that Nancy Harrison has resigned from the Board effective November 9, 2010. The Corporation and the Board thank her for her service as a director.
About ILJIN Group
Information on ILJIN Group can be found at http://www.iljin.co.kr.
About Isotechnika Pharma Inc.
Isotechnika Pharma Inc. is a biopharmaceutical company focused on the discovery and development of immunomodulating therapeutics that are designed to offer advantages over other currently available treatments. There is a significant unmet medical need in the treatment of both solid organ transplantation and autoimmune disease. It is estimated that the market potential will be $3 billion annually in sales for calcineurin inhibitors such as voclosporin in 2010.
Isotechnika Pharma Inc. is a publicly traded company on the Toronto Stock Exchange under the symbol "ISA". More information on Isotechnika Pharma can be found at http://www.isotechnika.com or http://www.SEDAR.com.
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SOURCE: Isotechnika Pharma Inc.
CONTACT: For further information: Dr. Robert Foster, President & CEO,email@example.com, +1-780-487-1600 (Ext 247); Dennis Bourgeault, CFO,firstname.lastname@example.org, +1-780-487-1600 (Ext 226)