ProMetic Life Sciences Inc.

ProMetic Life Sciences Inc.

November 15, 2005 07:00 ET

ProMetic Life Sciences Announces Reorganization

MONTREAL, QUEBEC--(CCNMatthews - Nov. 15, 2005) -

Four New Divisions to Function Independently; Shareholder Rights Plan to Replace Current Multiple Voting Rights Share Structure

In a move to increase shareholder value, ProMetic Life Sciences Inc. (TSX:PLI.SV), a leading biopharmaceutical company, today announced that its Board of Directors has approved a reorganization plan under which the business will be structured as a parent company with four pure-play operating units. Within the new structure, each distinct unit will function independently in terms of management, funding its operations, attracting investment, and developing specific products and services.

"ProMetic's research and development efforts have led to economically viable applications, with many reaching commercial status," said ProMetic Board Member Kym Anthony, on behalf of ProMetic's Board of Directors. "Establishing four independent operating units will better align the organization for success, and unlock the value of these various applications for our shareholders by focusing each operating unit on its core competencies and market opportunities."

According to Pierre Laurin, ProMetic's Chairman, President and CEO, the company feels strongly that the benefits derived from making these businesses self-sufficient will be positively felt in succeeding quarters and reduce ProMetic's monthly cash requirements by C$1 million. "ProMetic Life Sciences Inc. will focus its energies as parent company on overall strategy, finance, legal matters and compliance, and cost reductions will be achieved through a combination of facilities rationalization and personnel redeployment," he said.

Four New Units

The four new ProMetic units will include:

ProMetic Biosciences Ltd.

Based in the United Kingdom, ProMetic Biosciences Ltd. will accelerate development of bioseparation products based on applications of its unique and proprietary Mimetic Ligand™ technology. Mimetic ligands are synthetic chemical structures that selectively bind to proteins to remove or reduce pathogenic proteins, such as prions (e.g. mad cow disease) or to purify a therapeutic protein by binding and separating it from a complex mixture. Mimetic Ligand™ technologies are currently marketed worldwide and much sought after by the life sciences industry.

Under the reorganization, valuable assets of ProMetic Life Sciences Inc. will be transferred to ProMetic Biosciences Ltd., including its stake in Pathogen Removal and Diagnostic Technologies Inc. (PRDT), a joint venture established by ProMetic Life Sciences Inc. and The American Red Cross. PRDT's first prion filter, which is expected to be launched in 2006, addresses a potential market of US $500 million and faces limited competition over the next several years. The prion filter is the first product in a family of pathogen removal devices under development that will be marketed by ProMetic Biosciences Ltd. and its partners.

The ProMetic BioSciences Ltd unit will assume responsibility for licensing activities in the "biogenerics" pharmaceutical sector, a market opportunity exceeding US$10 billion. However, the strategy going forward has been revised to include licensing the technology to companies with established manufacturing and marketing capabilities. Discussions with several such companies are well underway for a variety of near term concrete projects.

With a revenue stream that is expected to make ProMetic Biosciences Ltd. cash flow positive in the near future, a public offering in the United Kingdom to raise financing for this unit will be considered in the coming months.


ProMetic Life Sciences Inc.'s therapeutic operating unit, headquartered in Montreal, will continue to focus on developing safe, innovative, effective and low cost compounds aimed at the treatment of cancer and autoimmune diseases/inflammation. This operating unit is considering alternative funding and/or partnering options to help accelerate the development of its first two lead compounds:

- PBI-1402 is a high potential drug candidate with applications for the treatment of anemia, a market exceeding US$ 7 billion in the US alone. Phase I trial confirmed oral efficacy in healthy volunteers in addition to a remarkable safety profile, and the drug is currently progressing to phase II;

- PBI-1393, which is ready to enter clinical trials, is targeted for the treatment of selected cancers in combination with chemotherapy.

The therapeutic operating unit is already moving forward with a plan to realize commercial value from these therapeutics based on the belief that the anemia and cancer therapeutic compounds have significant potential. Additionally, attractive auto-immune compounds for lupus and arthritis indications have been produced from the platform technology with proof of concept in animal models.

Cascade Technology

The Cascade Technology, a plasma protein extraction process jointly developed with the American Red Cross, is intended to be rolled into an operating unit focused on isolating and recovering high value therapeutic proteins from plasma for sale to hospitals and medical institutions. These proteins are expensive to extract and commonly used in the treatment of such diseases as immune deficiency, emphysema and bleeding disorders. This protein extraction process is an improvement on existing processes because it has been able to extract more proteins at a lower cost. ProMetic Life Sciences Inc. believes the Cascade process has three distinct commercial possibilities:

- The process can be employed by fractionators seeking to harvest single proteins more efficiently. There is a growing demand and shortage of supply for high value proteins commonly used to treat a variety of medical conditions.

- The Cascade process can be applied to the recovery of certain proteins that have established therapeutic value, but cannot be extracted effectively via current manufacturing practices, or that simply do not constitute the focus of large plasma fractionators. These proteins have the potential to receive "orphan" drug status and, if so, could be rapidly advanced to commercial status with the support of regulatory authorities and patient associations. ProMetic Life Sciences Inc. has already been approached by such associations.

- The Cascade process can be licensed to companies who believe the initial investment for new fractionation capacity will be more than offset by the return in each of the above areas. ProMetic Life Sciences Inc. is in advanced discussions with companies who are interested in this process.

Top Meadow Life Sciences

A joint venture to be created by ProMetic Life Sciences Inc. and Top Meadow Life Sciences Inc., an affiliate of Top Meadow Farms, it will be responsible for the product development and commercialization of PRDT technology to detect mad cow disease in live cattle. The BSE prion diagnostic system, as well as the development of new systems, will be carried out through this new unit which is expected to be financed by government and new shareholders, and staffed by dedicated senior management. Additional information on the organization of this company and its plans will follow in the coming weeks.

Board Reviewing Shareholders Rights Plan

As mentioned previously, the holders of multiple voting shares intend to convert them into subordinate voting shares. In order to protect shareholders against a takeover bid which would not recognize the full value of the Company and its four operating units, the Board is currently reviewing a protection mechanism.

This mechanism would take the form of a Shareholders Rights Plan, and would be put into effect when the multiple voting shares are converted, subject to the plan's approval by the Toronto Stock Exchange. The Company expects this could be effective before year end and be submitted for shareholder ratification at the next annual shareholders meeting.

"We truly believe this reorganization effectively responds to the Board's value maximization strategy, and paves the way for unlocking the value that exists in each of the four business units for the benefit of all ProMetic shareholders and partners," Laurin concluded.

Conference Call

Participants are invited to attend by connecting 10 minutes prior to the call to one of the following: 1-877-461-2815 (North America) or 416-695-6371 (international). The conference call will be webcast live on the Company's website at To access the archived conference call, dial 1-866-518-1010 (North America) and 416-695-5275 (international) available until November 29, 2005.

About ProMetic Life Sciences

ProMetic Life Sciences Inc. is a biopharmaceutical company specialized in the research, development, manufacture and marketing of a variety of commercial applications derived from its proprietary Mimetic Ligand™ enabling technology. This technology is used in large-scale purification of biologics and the elimination of pathogens. ProMetic is also active in therapeutic drug development with the mission to bring to market effective, innovative, lower cost, less toxic products for the treatment of inflammation and cancer. Its drug discovery platform is focused on replacing complex, expensive proteins with synthetic "drug-like" protein mimetics. Headquartered in Montreal (Canada), ProMetic has R&D and manufacturing facilities in the UK and business development activities in the US, Europe, Asia and MENA countries (Middle East and North Africa). Additional information is available on the Company's website at

Forward Looking Statements

This press release contains forward-looking statements about ProMetic's objectives, strategies, financial condition, results of operations and businesses that involve risks and uncertainties. These statements are "forward-looking" because they are based on our current expectations about the markets we operate in and on various estimates and assumptions. Actual events or results may differ materially from those anticipated in these forward-looking statements if known or unknown risks affect our business, or if our estimates or assumptions turn out to be inaccurate. Such risks and assumptions include, but are not limited to, the Company's ability to execute and complete successfully the announced reorganization, to obtain additional financing of the operating units as described, to implement facilities rationalization and personnel redeployment as planned, to develop, manufacture, and successfully commercialize value-added pharmaceutical products and to obtain contracts for its products and services; the completion of certain transactions, and the commercial acceptance of advanced affinity separation technology. You will find a more detailed assessment of the risks that could cause actual events or results to materially differ from our current expectations on page 15 of the Company's Annual Information Form for the year ended December 31, 2004, under the heading "Risk Factors". As a result, we cannot guarantee that any forward-looking statement will materialize; forward-looking statements do not take into account the effect that transactions or non-recurring items announced or occurring after the statements are made may have on our business. We assume no obligation to update any forward-looking statement even if new information becomes available, as a result of future events or for any other reason.

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