For immediate release: March 30, 2006
VANCOUVER, BC - Inex Pharmaceuticals Corporation ("INEX"; TSE: IEX) announced today as part of its 2005 audited operating results that it expects the two corporate strategic initiatives it launched in 2005 with the intention of maximizing stakeholder value for all Company assets will be achieved during 2006.
The two initiatives are the spin-off of the Company’s Targeted Immunotherapy platform and product candidates into a new debt-free company and the partnering of its Targeted Chemotherapy drugs to a company with the technical and financial capability to commercialize them.
Targeted Immunotherapy Spin Out
On January 26, 2006, INEX shareholders voted 98.3% in favour of spinning out the Targeted Immunotherapy assets into a new debt-free public company, called Tekmira Pharmaceuticals Corporation. INEX expects to receive the necessary court and regulatory approvals to implement the plan over the next few months.
Before INEX can implement the plan, on May 18, 2006 the British Columbia Court of Appeal will hear appeals from INEX and from Stark Trading and Shepherd Investments Ltd. (collectively “Stark”). INEX is appealing the Supreme Court of British Columbia’s (the “Court”) ruling that provided the holders of INEX’s outstanding convertible promissory notes the right to a separate vote on INEX’s spin-out plan. Stark is appealing the Court’s ruling that the spin-out of Tekmira can take place given the terms of the convertible debt and the Court’s decision to dismiss Stark’s bankruptcy petition.
INEX believes that the decisions of the Court dismissing the bankruptcy petition and ruling that the spin-out can take place given the terms of the convertible debt were correct rulings and INEX will continue to defend its position with respect to these decisions.
Stark is the majority holder of certain promissory notes issued by Inex International Holdings, a subsidiary of INEX. The promissory notes are not due until April 2007 and can be repaid in cash or in shares, at INEX’s option, at maturity.
Targeted Chemotherapy Partnership
On March 17, 2006, INEX announced that it has signed a Letter of Intent to license three products from its Targeted Chemotherapy pipeline to Hana Biosciences, Inc. (“Hana”; AMEX: HBX). Upon closing of the transaction, expected during the Second Quarter of 2006, Hana will pay INEX US$11.5 million in an upfront payment, consisting of cash and Hana shares. INEX will receive an additional US$30.5 million if development and regulatory milestones are achieved and will also receive royalties on product sales.
Hana will be responsible for all future development of the three products including all future expenses. INEX will support Hana in the near term to transfer knowledge and expertise and to ensure the products can be advanced as quickly as possible and will also be reimbursed for this support.
Timothy M. Ruane, President and Chief Executive Officer of INEX, said achievement of the spin-out and the license agreement will set INEX on a new course for the future.
“We are pleased that the two initiatives we began last year to maximize the value of the Company’s assets are both likely to be successfully completed in 2006,” said Ruane.
“As a result, INEX will have financial stability into 2007 and will undertake new corporate objectives, including working with the University of British Columbia to develop a new generation of drug delivery technology.”
To view the full press release, including Financial Results and Statements, click here.
