SGF participates to a major strategic transactions at Theratechnologies
Saint-Laurent, Québec, June 21, 2001 – Theratechnologies (TH: TSE) has announced today major strategic transactions related to its cell therapy activities. These transactions, aimed at enhancing the value of the Company’s assets, consist of the reorganization of its business activities through the transfer of its ex vivo photodynamic cell therapy program to its newly created subsidiary, Celmed BioSciences, the acquisition of NeuroGeneration and NeuroGenomics, two California corporations which have developed technologies for the treatment of neurodegenerative diseases, and investments totaling $60 million by Société générale de financement du Québec (SGF) and the Solidarity Fund QFL.
Dr. Michel F. Lévesque, founder of NeuroGeneration and now Vice President, Medical Affairs with Celmed BioSciences, has been authorized by the FDA to conduct a phase II clinical trial for Parkinson’s disease, using cell therapy derived from autologous neural stem cells. This will be the first study of its kind in the world evaluating the benefits of autologous cell therapy for this disease.
Celmed BioSciences represents a global value of $203 million. The new subsidiary combines a technological transfer from Theratechnologies estimated at $125 million, making Theratechnologies its major shareholder (61.6%), and the acquisition of NeuroGeneration and NeuroGenomics for a total consideration of $18 million (8.8%), paid in shares of Celmed. The SGF and the Solidarity Fund QFL have invested $30 million each (14.8% equity respectively) for a total of $60 million. The transaction includes an incentive to render Celmed a public company and is structured in such a way that Theratechnologies can buy back the shares of its partners. For this purpose, Theratechnologies has issued to the Solidarity Fund, the SGF and Dr. Michel F. Lévesque a total of 4,680,000 warrants at a price varying between $14.30 and $24.17 and having a maximum exercise term of two years. These warrants will be earned in their totality only if Theratechnologies exercises its purchase right to the shares of its partners in Celmed or in part if Celmed does not become a public corporation.
“The creation of Celmed BioSciences and the investment by strategic institutions provide Theratechnologies with the necessary critical mass to emerge at the international level in the field of cell therapy as well as therapeutic peptides,” said Dr. André de Villers, President and Chief Executive Officer of Theratechnologies.
Further to these transactions, Celmed BioSciences, Theratechnologies’ new subsidiary, will rank among the leaders in cell therapy. With sizeable financial resources, it will be poised to play a key role in this area. Celmed already has an experienced team of 40 scientists and managers. Moreover, Theratechnologies has started recruiting prominent scientists from the best research centers in North America to join Celmed’s work force. The implementation of Celmed’s strategic business plan will require a significant increase in the number of its employees over the next two years. Celmed BioSciences’ head office will be located in Saint Laurent, in the Montreal area, and it will also have facilities in Los Angeles. For Theratechnologies, the new subsidiary will provide a gateway to the American market.
Fostered by several major scientific discoveries in recent years, cell therapy will develop rapidly. Serious blood and neurodegenerative diseases baffling traditional pharmacological approaches will be treated with cell therapy, which will charter new territories until now inaccessible. It is forecasted in the United States alone that the cell therapy market will grow to $1.25 billion US in 2005, from $131 million US in 2000. The US market usually represents 40% of the world market.
Theratechnologies has acquired extensive know‑how in the field of cell therapy, notably stem cells, with the development of Theralux™, its ex vivo photodynamic treatment for cancers invading bone marrow, cases of graft-versus-host disease (GvHD) and certain autoimmune diseases. The Company is currently conducting a phase I/II clinical trial with respect to chronic myeloid leukemia as well as a pivotal trial on non‑Hodgkin lymphoma at Maisonneuve-Rosemont Hospital in Montreal. Preclinical work is also under way at Duke University Medical Center, North Carolina, for the validation of the technology in GvHD.
Celmed BioSciences is acquiring NeuroGeneration, a company founded by Dr. Michel Lévesque, a neurosurgeon at the Cedars‑Sinai Medical Center in Los Angeles. NeuroGeneration develops cell therapy approaches for central nervous system diseases which are otherwise irreversible or endanger patients’ lives. It has been discovered in recent years that neural cells can be regenerated. NeuroGeneration has developed proliferation and differentiation technologies for neural stem cells. NeuroGeneration will proceed with a phase II clinical trial involving 12 patients suffering from Parkinson’s disease. According to statistics, more than 500,000 people are affected by Parkinson’s disease in the United States. A major benefit of NeuroGeneration’s approach consists in using the patient’s own cells and culturing them in order to obtain a sufficient amount of the required cell types for the treatment. These cells are then given back to the patient (autologous graft). NeuroGeneration’s approach could be used in the case of spinal cord injuries and conditions affecting the central nervous system, notably stroke, Huntington’s disease and Alzheimer’s disease.
The Minister of State for Regions and Minister of Industry and Trade in Quebec, Gilles Baril, says: "Celmed is created by a company in a field of expertise unique to Quebec, doubled by an international leader. I believe the decision made by SGF Health to join its partner Theratechnologies in this new venture is an excellent one and that Quebec will benefit from this.”
The President and COO of SGF Health, Francis Bellido, is proud to reinforce the partnership with Theratechnologies: "This new company will add value to an innovative technological platform in the emerging market of regenerative medicine. Our participation in this project gives us another opportunity to get actively involved in making Quebec a knowledge-based society."
"This investment is consistent with the direction the Solidarity Fund QFL has taken since the ’90s, when it asserted its leadership by becoming the first major investor to believe in the potential of the biotech sector,” explained Fund president and CEO Raymond Bachand. "Headed by Jean‑Denis Dubois, the Fund’s Biotechnology and Health Sciences Fund is just about the only one of its kind in Québec and Canada to offer multidisciplinary expertise. The Fund is one of the main investors in Québec biotech SMEs, with a portfolio valued at over $300 million spread across some 40 companies," added Mr. Bachand. "Theratechnologies is one of our 1,600 partner companies in which we invested $5 million in April 2000."
With net assets in excess of $4.1 billion, the Solidarity Fund QFL is an investment fund that relies on the savings of Quebecers, primarily through its RRSPs, to help create and maintain jobs in Québec-based companies and to further Quebec’s economic growth. The Fund currently has more than 432,000 shareholders and to date has helped, on its own or with other financial partners, to create, preserve or maintain over 90,000 jobs.
SGF Santé Inc. is a subsidiary of the Société générale de financement du Québec whose mission is to carry out economic development projects meeting normal profitability requirements, in collaboration with business partners. Since it was restructured in 1998, SGF has generated investments of about $4.4 billion, creating over 19,400 direct and indirect jobs in the operating phase, not counting the thousands of jobs created during the construction phase. As at September 30, 2000, SGF’s consolidated assets totalled $2.2 billion. SGF has 52 international partners operating in Québec.(sgfqc.com)
Theratechnologies is a Canadian biopharmaceutical company involved in the fields of therapeutic peptides and cell therapy. The cell therapy axis is now entrusted to Celmed BioSciences. Theratechnologies’ peptide axis includes ThGRF (TH 9507), a growth hormone-releasing factor analogue for the treatment of muscle wasting and sleep disorders; LAP (long-acting peptides), a stabilization method for peptides and ExoPep, a process for the rapid discovery of G protein-coupled receptors.
Theratechnologies is listed on the Toronto Stock Exchange (TH) (www.TSE.com). For additional information: www.theratech.com
Senior Vice President and Director of Communications
Patricia Delaney Lussier
Chief Financial Officer Theratechnologies
, ext. 234