Adherex Technologies Inc.
TSX : AHX
AMEX : ADH

Adherex Technologies Inc.

July 20, 2005 18:33 ET

Adherex Announces Closing of US$8.5 Million Private Placement

RESEARCH TRIANGLE PARK, NORTH CAROLINA--(CCNMatthews - July 20, 2005) - Adherex Technologies Inc. (AMEX:ADH)(TSX:AHX)



- Financing includes US$3 million investment by GlaxoSmithKline

- Company also announces 1-for-5 reverse stock split


Adherex Technologies Inc. (AMEX:ADH)(TSX:AHX), a biopharmaceutical company with a broad portfolio of oncology products under development, today announced that it has completed its previously announced private placement offering of units for gross proceeds of US$8.5 million in connection with a licensing and development agreement with GlaxoSmithKline (GSK), which invested US$3 million as a part of the financing. The terms of the licensing and development agreement with GSK were the subject of a press release issued on July 15, 2005. The offering also included institutional investors from the US, Canada and Europe.

In connection with the private placement, the Company issued 30,393,134 units at a purchase price of US$0.28 per unit. Each unit consisted of one common share of Adherex and 0.30 of a common share purchase warrant. Each whole warrant entitles the holder to acquire one additional common share of Adherex at an exercise price of US$0.35 per share for a period of three years.

"This financing comes as part of a transforming event for the Company. The investment made by GlaxoSmithKline and the licensing and development agreement with GSK represent what we hope will develop into a significant and ongoing relationship," said William P. Peters, M.D., Ph.D., Chairman and CEO of Adherex. "The additional resources provided by this financing should help accelerate the further development of ADH-1 and our preclinical pipeline as well as the development of the newest drug in our portfolio - eniluracil."

Leerink Swann & Company and Versant Partners Inc. acted as agents for the Company in connection with the private placement. In addition to cash commissions, the agents received warrants to purchase approximately 286,000 common shares at an exercise price of US$0.35 per share for a period of two years. After the deduction of commissions and expenses of the offering, the Company expects to receive approximately US$8.1 million in net proceeds. Adherex intends to use the net proceeds to fund its operations and research and development programs.

The Company had previously indicated that it would undertake a reverse split when conditions were appropriate to enhance the marketability of the Company's common shares. As a result, Adherex also today announced that its Board of Directors has approved a 1-for-5 reverse split of its outstanding common shares. The reverse split had been approved by the Company's shareholders in April 2005. The effective time for the reverse split has been set for the close of business on July 29, 2005. The reverse split affects all of the Company's common shares, stock options and warrants outstanding at the effective time. Fractional shares will not be issued and each shareholder's aggregated fraction will be cancelled without consideration. Letters of Transmittal will be mailed shortly to the Company's shareholders, requesting them to forward their share certificates to the transfer agent, Computershare Investor Services Inc., in exchange for certificates representing the post-reverse split number of shares to which they are entitled. The common shares will begin trading on a reverse split-adjusted basis after the applicable exchange waiting periods have expired. After the reverse split, the Company will have approximately 42.6 million outstanding common shares. The common shares will begin trading under a new CUSIP number but there will be no change in the stock symbols of the Company as a result of the reverse split.

The Company also announced the resignation of Peter Karmanos, Jr. from the Board. Mr. Karmanos is stepping down for personal reasons and no decision as to a replacement has been made at this time. Commenting on the departure of Mr. Karmanos, Dr. Peters said, "I wish to thank Peter for his time and valuable contributions to the Company and realize with his particularly hectic schedule of late, it was no small commitment for him to undertake this role, and we appreciated his involvement."

The securities being offered have not been and will not be registered under the United States Securities Act of 1933, as amended, or any state securities laws, and thus may not be offered or sold within the United States unless registered under the US Securities Act of 1933 and applicable state securities laws, or an exemption from such registration is available.

About Adherex Technologies

Adherex Technologies Inc. is a biopharmaceutical company dedicated to the discovery and development of novel cancer therapeutics. We aim to be a leader in developing innovative treatments that address important unmet medical needs in cancer. We currently have multiple products in development including ADH-1 (Exherin™), sodium thiosulfate (STS) and our latest addition, eniluracil. ADH-1, our lead biotechnology compound, selectively targets N-cadherin, a protein present on certain tumor cells and established blood vessels that feed solid tumors. STS, a drug from our specialty pharmaceuticals pipeline, protects against the disabling hearing loss that can often result from treatment with platinum-based chemotherapy drugs. Eniluracil, a dihydropyrimidine dehydrogenase (DPD) inhibitor, is being developed to enhance the therapeutic value and effectiveness of 5-FU, one of the most widely-used oncology drugs in the world. With a diversified portfolio of unique preclinical and clinical-stage cancer compounds and a management team with expertise in identifying, developing and commercializing novel cancer therapeutics, Adherex is emerging as a pioneering oncology company. For more information, please visit our website at www.adherex.com.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

This press release may contain forward-looking statements that involve significant risks and uncertainties. The actual results, performance or achievements of the Company might differ materially from the results, performance or achievements of the Company expressed or implied by such forward-looking statements. We are subject to various risks, including those inherent in the biopharmaceutical industry, the early stage of our product candidates, the uncertainties of drug development, clinical trials, and regulatory review, our reliance on collaborative partners, our need for additional capital to fund our operations, and our history of losses. For a more detailed discussion of related risk factors, please refer to our public filings available at www.sedar.com and www.sec.gov.

Contact Information

  • Adherex Technologies Inc.
    Melissa Matson
    Director, Corporate Communications
    (919) 484-8484
    matsonm@adherex.com