SOURCE: Novelos Therapeutics, Inc.

June 13, 2005 15:42 ET

Novelos Therapeutics Announces Merger With U.S. Public Company -- Trading to Begin on Tuesday Under Symbol "NVLT"

Merger Coincides With Private Placement of $2.2 Million

NEWTON, MA -- (MARKET WIRE) -- June 13, 2005 -- Novelos Therapeutics, Inc., a biotech company focusing on oxidized glutathione for use in fighting cancer and hepatitis, today announced it has completed a merger with Common Horizons, Inc., a public company that had no meaningful operations prior to the merger. Novelos Therapeutics, Inc., the surviving entity, is scheduled to begin trading tomorrow, Tuesday, June 14th, under the symbol (OTC BB: NVLT).

Concurrently with the merger, the Company completed the first round of a private offering of Units to accredited investors. The Company sold 87 Units, each Unit consisting of 20,000 shares of common stock and a three-year warrant to purchase 10,000 shares of common stock at an exercise price of $2.25 per share, at a purchase price of $25,000 per Unit. In exchange for the Units sold, the Company received cash proceeds of $1,725,000, and three investors converted the $450,000 principal amount outstanding of promissory notes issued by Novelos Therapeutics, for a total of $2,175,000. vFinance Investments, Inc. and Mercer Capital, Ltd. are the placement agents for the offering.

"This transaction marks an important first step for Novelos Therapeutics to begin to access public capital to implement the development and commercialization plans for our pharmaceutical products addressing cancer and hepatitis. With a publicly traded currency in the form of Novelos common shares, the Company will also be able to consider acquiring additional products or technologies," said Harry Palmin, President and Acting CEO of Novelos Therapeutics.

Mr. Palmin added, "We have a very compelling story: Cancer and hepatitis are huge markets with great unmet needs. Our drugs have been used safely and effectively in thousands of patients in the Russian Federation, where they are patented, produced and sold by an unrelated entity. The Company's world-wide patent position (outside of the former Soviet Union) is solid, and manufacturing is simple, inexpensive and scalable. We have also completed a U.S. Phase I/II non-small cell lung cancer study."

About Novelos Therapeutics, Inc.

Novelos Therapeutics, Inc. was established in 1996 to commercialize two promising oxidized glutathione based compounds, NOV-002 and NOV-205, for the treatment of cancer and hepatitis. Both compounds have completed clinical trials in humans and have been approved for use in the Russian Federation where they were developed. NOV-002, marketed in Russia under the trade name GLUTOXIM®, has been administered to over 5,000 patients, yielding excellent safety and promising efficacy data. A U.S. Phase I/II clinical trial of NOV-002 for lung cancer has been completed. U.S. clinical trials with NOV-205 for hepatitis C are anticipated to commence shortly.

About the Products

NOV-002, the lead compound, is being developed to treat non-small cell lung cancer ("NSCLC"). NOV-002 is a cytoprotectant and an immunomodulator. When used in combination with chemotherapy, NOV-002 increased the one-year survival rate from 17% to 63% in a Russian study, a result that also represents an 80% improvement above the U.S. 35% standard of care. A U.S. Phase I/II clinical study has been completed.

NOV-002 is also being developed to treat refractory (that is, not responsive to chemotherapy) ovarian cancer. Two additional opportunities for NOV-002 are under development, including radiation protection and psoriasis.

NOV-205 is being developed to treat chronic hepatitis C in the U.S. When used as mono-therapy for one month in hepatitis B and for two months in hepatitis C, NOV-205 has been shown to greatly reduce or eliminate viral loads and to vastly improve liver function relative to existing drugs on the market.

This news release contains forward-looking statements. Such statements are valid only as of today, and we disclaim any obligation to update this information. These statements are subject to known and unknown risks and uncertainties that may cause actual future experience and results to differ materially from the statements made. These statements are based on our current beliefs and expectations as to such future outcomes. Drug discovery and development involve a high degree of risk. Factors that might cause such a material difference include, among others, uncertainties related to the ability to attract and retain partners for our technologies, the identification of lead compounds, the successful preclinical development thereof, the completion of clinical trials, the FDA review process and other government regulation, our pharmaceutical collaborators' ability to successfully develop and commercialize drug candidates, competition from other pharmaceutical companies, product pricing and third-party reimbursement.

Consulting For Strategic Growth I, Ltd. ("CFSG") has a June 1, 2005, contract to provide Novelos with consulting, business advisory, investor relations, public relations and corporate development services for a three-month period. In connection with these services, CFSG prepares press releases, corporate profiles, and other publications on behalf of the Company. Independent of CFSG's receipt of cash compensation from the Company, CFSG may choose to purchase the common stock of the Company and thereafter liquidate those securities at any time it deems appropriate to do so.

Contact Information

  • COMPANY CONTACT
    Harry S. Palmin
    President and Acting CEO
    Novelos Therapeutics, Inc.
    One Gateway Center, Ste. 504
    Newton, MA 02458
    Ph: 617-244-1616 ext. 11
    Fax: 631-574-3130
    Email: Email Contact

    INVESTOR RELATIONS
    Stanley Wunderlich
    CEO
    Consulting for Strategic Growth
    800 Second Avenue
    New York, NY 10017
    Ph: 800-625-2236
    Fax: 212-337-8089
    Email: Email Contact