Bradmer Pharmaceuticals Inc.
TSX VENTURE : BMR.P

Bradmer Pharmaceuticals Inc.

October 04, 2005 11:28 ET

Bradmer Pharmaceuticals Inc. Announces Proposed Qualifying Transaction

TORONTO, ONTARIO--(CCNMatthews - Oct. 4, 2005) -

(NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA)

Bradmer Pharmaceuticals Inc. (TSX VENTURE:BMR.P) ("Bradmer"), a capital pool company, is pleased to announce that it has entered into a letter of intent to complete a business combination (the "Qualifying Transaction") with Blue Devil Pharmaceuticals Inc. ("Blue Devil"). If completed, the business combination will constitute Bradmer's qualifying transaction pursuant to the policies of the TSX Venture Exchange (the "Exchange").

Information Concerning Bradmer

Bradmer is a company existing under the laws of Ontario and is a reporting issuer in Alberta and Ontario. Bradmer currently has 7,500,000 common shares ("Bradmer Shares") outstanding, of which 5,000,000 are currently held in escrow pursuant to the policies of the Exchange.

Bradmer has granted stock options to acquire up to an aggregate of 750,000 Bradmer Shares at a price of $0.20 per share (the "Bradmer Options") to directors, officers and consultants. Bradmer has also issued broker warrants to acquire up to an aggregate of 250,000 Bradmer Shares at a price of $0.20 per share (the "Bradmer Warrants") as part of the compensation payable to the agents in connection with Bradmer's initial public offering. Other than the Bradmer Options and Bradmer Warrants, no other securities of Bradmer, convertible or exchangeable into Bradmer Shares, are outstanding.

Further information concerning Bradmer can be found in the prospectus of Bradmer dated August 17, 2005.

Information Concerning Blue Devil

Blue Devil is a private company existing under the laws of Ontario. Blue Devil currently has 4,000,000 common shares ("Blue Devil Shares") outstanding.

Blue Devil has granted or intends to grant stock options to acquire up to an aggregate of 280,000 Blue Devil Shares at price to be determined by the board of directors of Blue Devil (the "Blue Devil Options"). Other than the Blue Devil Options, no other securities of Blue Devil, convertible or exchangeable into Blue Devil Shares, are outstanding.

Pursuant to a license agreement with Duke University, a nonprofit educational and research institution organized under the laws of North Carolina, Blue Devil holds the rights to a proprietary treatment developed at Duke University Medical Center for a particularly aggressive form of brain cancer. To date, the treatment has been used in over 160 patients with excellent results and has completed a Phase II clinical trial conducted by researchers at Duke University.

The licensed treatment includes the rights to three issued patents, five patents which are pending in the United States, and other patents filed outside of the United States. To date, over US$20 million has been spent on research and development of the licensed treatment.

In connection with the entering into of the license agreement, Duke University, together with certain researchers at Duke University, acquired 640,000 Blue Devil Shares, representing 16.0% of the outstanding Blue Devil Shares. The remaining Blue Devil Shares are held by Bradmer Ventures, Inc., Baltimore Biotech Holdings, Inc., and Dr. Donald Kufe (see biography below), each of whom holds 2,016,000 (50.4%), 1,008,000 (25.2%) and 336,000 (8.4%) Blue Devil Shares, respectively.

Information Concerning the Proposed Qualifying Transaction

Bradmer and Blue Devil have entered into a letter agreement dated October 3, 2005 (the "Letter of Intent") setting out certain terms and conditions pursuant to which the proposed Qualifying Transaction will be completed. The Qualifying Transaction is subject to the parties successfully negotiating and entering into a definitive amalgamation agreement, share purchase agreement or other similar agreement such that the Qualifying Transaction may be completed on a tax preferred basis to the parties thereto.

The completion of the Qualifying Transaction is also subject to an arm's length financing of a minimum of $8 million (the "Financing").

Pursuant to the Letter of Intent, Bradmer and Blue Devil have agreed to issue Bradmer Shares to the current shareholders of Blue Devil at a deemed value of $0.30 per share. The parties have further agreed that the value of Blue Devil shall not exceed $25 million (on a pre-money basis prior to the completion of the Financing).

The value of Blue Devil remains subject to final determination, which determination, in part, will be based in the context of the market through the Financing. Assuming the completion of the minimum Financing and the Qualifying Transaction, current Bradmer shareholders, current Blue Devil shareholders and purchasers pursuant to the Financing would hold approximately 6.4%, 70.9% and 22.7% of the then outstanding Bradmer Shares (or shares of the resulting issuer), respectively. To the extent that the value of Blue Devil is ultimately determined to be less than or greater than $25 million these percentages will be adjusted accordingly.

It is anticipated that in connection with the completion of the Qualifying Transaction, the Bradmer Shares will be consolidated such that approximately 10,000,000 Bradmer Shares (or shares of the resulting issuer) will be outstanding following the completion of the Qualifying Transaction (inclusive of the shares issued pursuant to the Financing).

The proceeds of the Financing will be used to fund a multi-center clinical trial of the licensed treatment, to fund payments to Duke University under the terms of the license agreement and for working capital purposes.

The completion of the Qualifying Transaction is subject to the approval of the Exchange and all other necessary regulatory approvals. It is also subject to additional conditions precedent, including shareholder approvals of Bradmer and Blue Devil as required under applicable corporate or securities laws, satisfactory completion of due diligence reviews by both parties, approvals of the board of directors of Bradmer and Blue Devil and certain other conditions customary for transactions of this nature.

The final negotiated value of Blue Devil and the terms of the Financing will be disclosed in a subsequent press release of Bradmer and in the management information circular to be prepared by Bradmer in respect of the Qualifying Transaction. Trading in the Bradmer Shares will remain halted until at least the time of such press release and pending the completion of certain due diligence investigations by the Exchange. There can be no assurance that trading in the Bradmer Shares will resume prior to the completion of the Qualifying Transaction.

Sponsor

The proposed Qualifying Transaction is subject to the sponsorship requirements of the Exchange. A sponsor will be identified at a later date and will be announced in a subsequent press release of Bradmer. An agreement to sponsor should not be construed as an assurance with respect to the merits of the transaction or the likelihood of completion of the proposed Qualifying Transaction.

Non Arm's Length Qualifying Transaction

Dr. Mark Rogers, together with is wife, Dr. Elizabeth Rogers, holds 2,400,000 Bradmer Shares, representing 32.0% of the outstanding Bradmer Shares. Dr. Rogers, together with his wife or entities controlled by them, currently holds 3,024,000 Blue Devil Shares, representing approximately 75.6% of the outstanding Blue Devil Shares.

As Dr. Rogers holds a controlling interest in both Bradmer and Blue Devil, the proposed Qualifying Transaction constitutes a "Non Arm's Length Qualifying Transaction" under the policies of the Exchange and is, therefore, subject to majority of the minority approval by the shareholders of Bradmer.

Management and Board of Directors of Resulting Issuer

Upon completion of the Qualifying Transaction, it is anticipated that management of the resulting issuer will include the persons identified below. Additional proposed directors and officers of the resulting issuer will be identified at a later date.

Mark C. Rogers, MD - President, Chief Executive Officer and Director

Dr. Mark Rogers received his undergraduate degree from Columbia University and his medical degree from Upstate Medical Center. Dr. Rogers completed a Pediatric Fellowship at the Children's Hospital Medical Center in Boston, a Cardiology Fellowship at Duke University Medical Center and an Anaesthesiology and Critical Care Fellowship at Massachusetts General Hospital.

Dr. Rogers began his medical career at Johns Hopkins University, where he spent 16 years and held a number of senior positions, including Distinguished Faculty Professor and Chairman of the Department of Anaesthesiology and Critical Care Medicine, Director of Pediatric Intensive Care Unit and Professor of Pediatrics. In his role as Associate Dean, Dr. Rogers founded a number of business ventures at Johns Hopkins and during his tenure at Johns Hopkins he attended The Wharton School of Business at the University of Pennsylvania where he received an MBA. There is now an endowed Professorship at Johns Hopkins named for Dr. Rogers.

From 1992 to 1996, Dr. Rogers was vice Chancellor for Health Affairs of Duke University Medical Center and Executive Director and Chief Executive Officer at Duke Hospital and Health Network. He was responsible for the overall administration of the 1,100-bed Duke Hospital and for creating the Duke Health Network, which encompasses clinical activities such as the development of Duke's primary care network and Health Maintenance Organization. While at Duke University Medical Center, Dr. Rogers was involved in designing strategic partnerships with business, especially with medical and pharmaceutical companies.

In addition to his medical and administrative duties, Dr. Rogers is the author of over 120 papers and author or editor of 15 books. He has lectured around the world as an expert in intensive care of children and was a Fulbright Scholar in Yugoslavia in 1989. In 1995, Dr. Rogers was elected to the National Institute of Medicine of the National Academy of Sciences.

Dr. Rogers was recruited from academia to become Senior Vice President, Corporate Development and Chief Technology Officer of the Perkin-Elmer Corporation (now Applera-Celera). He was responsible for mergers, acquisitions and technological developments in molecular biology. His area of expertise included DNA sequencing, gene expression and protein analysis as well as other molecular tools vital for pharmaceutical discovery. From there, Dr. Rogers became President of Paramount Capital in June 1997, a company which specializes in biotechnology and biopharmaceutical venture capital financing, private equity placements and asset management.

Dr. Rogers has been a founder, officer and/or director of several public companies, including Cardiome Pharma Corp. (NASDAQ, Toronto Stock Exchange), Adherex Technologies Inc. (American Stock Exchange, Toronto Stock Exchange) and Antisoma plc (London Stock Exchange). Dr. Rogers was also a director of Aptamera, Inc., a Louisville, Kentucky based oncology company that was acquired by Antisoma plc (London Stock Exchange) in February 2005.

Kerry M. Barnhart, Ph.D. - Chief Scientific Officer

Dr. Barnhart was previously Chief Scientific Officer of Aptamera, Inc., a private oncology drug development company, from start-up stage through to its acquisition by Antisoma plc (London Stock Exchange) in February 2005. In that role, he directed all company research, product and clinical development, and regulatory activities. Prior to joining Aptamera, Dr. Barnhart held various research and business management positions in San Diego at both start-up and public biotech companies, including Vical, Inc. and Imgenex Corporation.

During several decades in the life sciences industry, Dr. Barnhart's experience has focused on basic research into the molecular biology of normal and diseased cells, particularly cancer cells, and applied research for the development of therapeutic products for the treatment of cancer, metabolic, and infectious diseases, and for the development of diagnostic and research reagents. Dr. Barnhart has published over 25 research papers in peer-reviewed journals, has been the recipient of multiple small business grants from the National Institutes of Health, and has served as chairperson for review committees of the National Institute of Environmental Health Sciences. He received a BS degree in chemistry and a MS degree in toxicology from the University of Arizona, and completed doctoral studies in molecular biology at the Memorial-Sloan Kettering Cancer Center in New York City while enrolled in the Cornell University Graduate School of Medical Sciences. Dr. Barnhart conducted post-doctoral studies at the Salk Institute for Biological Studies and the University of California, San Diego.

Brian Brohman - Chief Financial Officer

Mr. Brohman previously held the position of Chief Financial and Business Development Officer of Aptamera, Inc., a private oncology drug development company, and was responsible for the company's fundraising and licensing activities beginning in February 2002 through to its successful sale to Antisoma plc (London Stock Exchange) in February 2005.

A graduate of the University of Notre Dame with a BBA in Finance, Mr. Brohman has over 15 years experience in corporate finance and business development, including 11 years in the medical technology field. Mr. Brohman's broad corporate finance experience in private and public companies spans the disciplines of Strategic Planning, Venture Capital Funding, Capital Budgeting, Treasury, Risk Management, and Investor Relations. Since 1995, Mr. Brohman has specialized in the field of business development, and has been involved in a number of M&A and equity financing deals, including 25 licensing and acquisition transactions while with Cordis Corp., a multi-billion dollar medical device division of Johnson & Johnson.

Douglas G. Janzen - Director

Douglas Janzen has been the Chief Financial Officer of Cardiome Pharma Corp. (NASDAQ, Toronto Stock Exchange) since January of 2003. He has considerable experience in corporate banking and financing within the biotech sector. From September 2001 to January 2003, Mr. Janzen served as Managing Director, Health Sciences and was a partner at Sprott Securities Inc., a Toronto based investment bank. Prior to joining Sprott Securities Inc., from July 1998 to August 2001, Mr. Janzen was Head of Research and Senior Health Sciences Analyst at Loewen, Ondaatje, McCutcheon Limited, another Toronto based investment bank.

Mr. Janzen is also a director of Medical Ventures Corp., a medical technology company listed on the Exchange specializing in the development and commercialization of cardiovascular medical devices. He was also a director of Aptamera, Inc., a private oncology drug development company, which was acquired by Antisoma plc (London Stock Exchange) in February 2005.

Perry N. Dellelce - Director

Perry Dellelce is a founder and has been a partner of Wildeboer Dellelce LLP, a boutique business law firm, since its inception in February 1993. The firm's client base includes a wide range of public, private and regulated companies, investment dealers, venture capitalists and lenders. Mr. Dellelce has a B.A. from the University of Western Ontario, an MBA from the University of Notre Dame and an LL.B. from the University of Ottawa.

Mr. Dellelce currently serves as an officer or a director of various public corporations listed on the Exchange or Toronto Stock Exchange.

Mr. Dellelce is a member of the board of directors of the University of Western Ontario Alumni Association, the Campaign Cabinet of the University of Ottawa Faculty and the Business Advisory Council and the Executive Education Advisory Council of the Mendoza College of Business at the University of Notre Dame. He is also a member of the Development Steering Committee and the Special Events Committee of the board of trustees of the Art Gallery of Ontario and the Global Ambassador Partnership Program of the Greater City of Sudbury.

Oncology Expertise

In addition to the proposed management of resulting issuer following completion of the Qualifying Transaction, it is anticipated that the following individuals will form the Scientific Advisory Board of the resulting issuer.

Donald W. Kufe, M.D. - Chairman, Scientific Advisory Board

Dr. Kufe received his MD from the University of Rochester School of Medicine and postgraduate training at Harvard's Beth Israel Hospital. Subsequently, he undertook extensive laboratory-based research in molecular virology at the Institute of Cancer Research of Columbia University. After Columbia, he joined the faculty of Harvard's Dana-Farber Cancer Institute where he is now Professor of Medicine. He has served as Chief of the Division of Cancer Pharmacology, Deputy Director of the Dana-Farber Cancer Center, Director of the Harvard Phase I Oncology Group and Leader of the Experimental Therapeutics Program. He develops new therapeutic approaches to cancer with a focus on the development of cancer drugs, vaccines and anti-angiogenic compounds. He has served as the senior editor of Cancer Medicine, the major textbook in oncology, and on the editorial boards of multiple international cancer research journals.

Darell D. Bigner, MD, Ph.D. - Scientific Advisory Board, inventor

Dr. Bigner is the Deputy Director of the Duke Comprehensive Cancer Center, Professor of Surgery, Vice-Chairman of the Division of Basic Science and Investigative Pathology, Department of Pathology, Duke Medical Center, and the Edwin L. Jones, Jr. and Lucille Finch Jones Distinguished Cancer Research Professor of Pathology, Duke University. He sits on or chairs a variety of advisory panels and review committees at both National Cancer Institute ("NCI") and National Institute of Health ("NIH"), and is considered a leading expert on molecular approaches to the treatment of brain cancer. He has published nearly 500 scientific articles, reviews, or books, and is currently the recipient of six NCI/NIH grants supporting his work on the pathology and treatment of brain cancer.

Dr. Bigner is an inventor of the licensed treatment which is to be acquired by Bradmer pursuant to the proposed Qualifying Transaction with Blue Devil.

Michael R. Zalutsky, Ph.D. - Scientific Advisory Board, inventor

Dr. Zalutsky is Professor of Radiology and Biomedical Engineering at Duke University. He is also Director of the Radiolabeling Shared Resource and Co-Program Leader of the Cancer Immunobiology Program in the Duke University Comprehensive Cancer Center. He received his Ph.D. in Chemistry from Washington University and prior to coming to Duke, held academic appointments at the University of Chicago and Harvard Medical School. Dr. Zalutsky has authored or co-authored more than 260 journal articles and reviews and has edited two books. He serves on the editorial board of four journals and has been a member of the Medical Imaging Study Section of the National Institutes of Health. His primary research interests are the development of molecularly targeted radiodiagnostics and radiotherapeutics for oncologic applications. His research has been supported by multiple grants from the National Institutes of Health and the Department of Energy. He currently is a recipient of a MERIT Award from the National Cancer Institute for his research in targeted radiotherapy. In 2005, he received the Berson Yalow Award from the Society of Nuclear Medicine.

Dr. Zalutsky is an inventor of the licensed treatment which is to be acquired by Bradmer pursuant to the proposed Qualifying Transaction with Blue Devil.

As noted above, completion of the Qualifying Transaction is subject to a number of conditions, including, but not limited to, acceptance by the Exchange and majority of the minority shareholder approval. The Qualifying Transaction cannot close until the required approvals have been obtained. There can be no assurance that the Qualifying Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular of Bradmer to be prepared in connection with the proposed Qualifying Transaction, any information released or received with respect to the proposed Qualifying Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Bradmer should be considered to be highly speculative.

This press release contains projections and forward-looking information that involve various risks and uncertainties regarding future events. Such forward-looking information can include without limitation statements based on current expectations involving a number of risks and uncertainties and are not guarantees of future performance of Bradmer. These risks and uncertainties could cause actual results and Bradmer's plans and objectives to differ materially from those expressed in the forward-looking information. Actual results and future events could differ materially from those anticipated in such information. These and all subsequent written and oral forward-looking information are based on estimates and opinions of management on the dates they are made and expressly qualified in their entirety by this notice. Bradmer assumes no obligation to update forward-looking information should circumstances or management's estimates or opinions change.

The Exchange has in no way passed upon the merits of the proposed Qualifying Transaction and has neither approved nor disapproved the contents of this release.

Contact Information

  • Bradmer Pharmaceuticals Inc.
    Doug Janzen
    Director
    (604) 677-6905
    or
    Blue Devil Pharmaceuticals Inc.
    Dr. Mark Rogers
    President
    (646) 339-1776