SOURCE: Vivione Biosciences Inc.

Vivione Biosciences

January 28, 2015 07:00 ET

Vivione Biosciences Inc. Announces Agreement to Acquire Trillium Diagnostics

DALLAS, TX--(Marketwired - January 28, 2015) - Vivione Biosciences Inc. ("Vivione") (TSX VENTURE: VBI), announced today that it has entered into a Share Purchase Agreement to acquire all of the capital stock of Trillium Diagnostics ("Trillium") for US$1.5 million in cash and US$4 million in common shares of Vivione at closing along with subsequent milestone-related contingent purchase payments of up to US$9.5 million in cash and or common shares of Vivione over a period of up to 64 months following closing (the "Acquisition"). All issuances of common shares in connection with the Acquisition will be comprised of a ratio of 20% Class A voting common shares of Vivione ("Class A Shares") and 80% Class B non-voting common shares of Vivione ("Class B Shares") and will be at market price but no less than CDN$0.35 per share at the time of issuance. 

Closing is subject to numerous conditions, including approval of the TSX Venture Exchange Inc. (the "Exchange") in respect of the Acquisition, shareholder approval of Vivione, if required by the Exchange, and completion of the Financing, as further described below. Upon completion of the Acquisition, Trillium will be a wholly owned subsidiary of Vivione Biosciences, LLC, which is the wholly owned operating subsidiary of Vivione. Trillium's founder and President, Bruce H. Davis, MD will join the senior management team of Vivione and its subsidiaries as Chief Science Officer, and will be added to the Board of Directors of Vivione.

The Acquisition will be financed through a combination of cash on hand, proceeds from the Financing, which is described below, and the issuance of Class A Shares and Class B Shares.

Brokered Private Placement

In connection with the Acquisition, Vivione intends to complete a brokered private placement ("Private Placement") of common shares of Vivione ("Common Shares"). The Private Placement will be conducted on a "best-efforts" basis and shall consist of the sale of up to 28,571,429 Common Shares for gross proceeds of up to CDN$10,000,000.

Completion of the Financing is subject to negotiation of final terms of the transaction with one or more investors and the receipt of all necessary regulatory approvals, including the conditional approval of the Exchange. The Financing is anticipated to close in April, 2015. The Common Shares issued pursuant to the Financing would be subject to a four month restriction on resales under applicable Canadian securities laws.

Trillium Diagnostics

Trillium is a leader in the emerging area of immune-profiling that brings the approach of personalized medicine to infectious disease and sepsis diagnostics. Sepsis is the most expensive hospital-associated pathology, representing approximately 6.9% of all Medicare costs in the U.S. in 2011(i). Trillium's lead product, Leuko64, is a quantitative test for neutrophil CD64 expression, a marker directly associated with sepsis diagnosis. With over 30 peer-review publications, CD64 clearly represents a superior test for sepsis diagnosis compared to prior generation biomarkers such as procalcitonin and lactate(ii). The company holds licenses or patents for three biomarkers, including neutrophil CD64, soluble CD163 and circulating cell free DNA. Trillium generated approximately US$1,000,000 in revenue in 2014 with an estimated revenue potential of over US$20M in 2017. Leuko64 presently has CE IVD certification for sale in the European Union. Clinical data on Leuko64 has been submitted to the FDA for its approval of IVD sales in the U.S. 

About Sepsis

  • Sepsis is a leading cause of morbidity and mortality in the United States, ahead of prostate cancer, breast cancer and HIV/AIDS combined(iii)
  • 1 Million cases annually in U.S. (iv) with 215,000 annual deaths(v).
  • If diagnosed within 1 hour, sepsis has an 80% survival rate -- after the sixth hour this declines to 30% survival(vi).
  • Sepsis accounts for 40% of total ICU expenditures in U.S(vii).
  • Most expensive hospital-associated pathology, estimated to cost the U.S. healthcare system US$20.3 billion(viii)

The emerging field of cell-based diagnostics using flow cytometric analysis, such as the quantitative analysis of CD64(ix), is providing clinicians with a new window into an individual patient's immune response to infections and physiologic response that can aid therapeutic decision making and improve patient outcomes. Vivione's RAPID-B flow cytometric system, teamed with Trillium's Leuko64 test, promises a more rapid and highly sensitive diagnostic procedure than anything in the marketplace today. 

Matthew Gombrich, M.D., M.S., Chief Medical Officer of Vivione commented, "Vivione's over-arching strategy is to provide infectious disease clinicians faster and more reliable diagnostics, an improved method for antibiotic susceptibility testing, and a means to assess an individual patient's immune status. To this end, the Trillium acquisition brings the first quantitative test for assessing a patient's immune response and is a natural complement to Vivione's mission." Dr. Gombrich continues, "Vivione envisions a time in the near future where the RAPID-B platform can diagnosis a blood stream infection in hours from a direct sample as opposed to days, provide in 90 minutes information pertaining to targeted antibiotic therapy, and with the Trillium acquisition, immune-profiling. In speaking to clinicians, this is what they want…Tell me this patient has an infection, tell me what antibiotics to use, and tell me if they are moving towards the septic pathway".

Kevin Kuykendall, Chairman and Chief Executive Officer of Vivione, commented, "This acquisition will enhance the commercial value of Vivione's business and drives immediate revenue and profitability. The ability to deploy the proven and effective Trillium assays on the Vivione RAPID-B diagnostic platform is an ideal way to leverage the speed and sensitivity of Vivione's platform technology in the testing of sepsis and severe infections. This acquisition is a natural springboard for Vivione's planned entry into the clinical markets in the U.S., Canada and worldwide. Besides providing Vivione with over US$1,000,000 in annualized revenues from the sale of products in Trillium's current European clinical markets as well as research sales in the U.S., it allows Vivione to incorporate the RAPID-B systems into the FDA certification process for Leuko64, providing valuable experience for subsequent certification efforts on infection screening."

Trillium Chief Executive Officer, Dr. Bruce Davis, added, "Strategically, the fit between Trillium and Vivione could not be more advantageous. We have searched for the right diagnostic platform technology to complement our capabilities in assay development and deployment. The unique speed, sensitivity, and automation of Vivione's RAPID-B technology and our focus on high impact clinical applications will allow us to take our IVD products and technologies to a new level of performance. This opens up the potential for increased sales in the EU, where we have already successfully marketed our CE marked assays, and for launching our product line into the US clinical market following FDA clearance."

About Vivione

Formed in 2006 in collaboration with the FDA, Vivione is a TSX Venture Exchange listed biosciences company focused on the commercialization of its proprietary RAPID-B system, an integrated system of hardware, software and chemical reagents that quickly and accurately identifies, quantifies and qualifies bacteria and other pathogens in food safety, bio-therapeutics, clinical, industrial and oil & gas environments. For more information, visit www.VivioneBiosciences.com.

About Trillium

Trillium, located in Bangor, Maine (www.trilliumdx.com), has a focus on developing novel cellular diagnostic biomarkers on flow cytometric and immunoassay platforms for in vitro diagnostic use, as well has having expertise in laboratory hematology standardization and regulatory clearance. Trillium has leading biomarkers in the areas of infection/sepsis detection plus the monitoring and measurement of fetomaternal hemorrhage (FMH) for obstetric care. 

ADVISORY ON FORWARD-LOOKING STATEMENTS

This news release contains forward-looking statements and information ("forward-looking statements") within the meaning of applicable securities laws and is based on the expectations, estimates and projections of management of Vivione as of the date of this news release, unless otherwise stated. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking statements. More particularly and without limitation, this news release contains forward-looking statements concerning: anticipated benefits of the Acquisition to the Securityholders of Vivione, the timing of required Exchange approval for the Acquisition; the ability of Vivione to satisfy the other conditions to, and to complete, the Acquisition; the anticipated closing date of the Financing and the anticipated use of proceeds of the Financing, receipt of anticipated FDA approvals and the anticipated Board of Directors of Vivione and management team of Vivione, Trillium and Vivione Biosciences, LLC. Such forward-looking statements are provided for the purpose of providing information about management's current expectations and plans relating to the future.

In respect of the forward-looking statements concerning the anticipated benefits and completion of the proposed Acquisition and the anticipated timing for completion of the Acquisition, Vivione has provided such in reliance on certain assumptions that it believes are reasonable at this time, including assumptions as to the ability of Vivione to receive, in a timely manner, the necessary Exchange and other third party approvals, the ability of each of Trillium and Vivione to satisfy, in a timely manner, the other conditions to the closing of the Acquisition; and expectations and assumptions concerning, among other things: planned synergies, capital efficiencies and cost-savings and entry into new markets.

The anticipated dates provided may change for a number of reasons, including inability to secure necessary Exchange or other third party approvals in the time assumed or the need for additional time to satisfy the other conditions to the completion of the Acquisition. Accordingly, readers should not place undue reliance on the forward-looking statements contained in this news release. 

Readers are cautioned that the foregoing list of factors is not exhaustive. The reader is cautioned not to place undue reliance on these forward-looking statements. The forward-looking statements contained in this news release are made as of the date hereof and Vivione undertakes no obligations to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS NEWS RELEASE.

(i) http://www.sepsisalliance.org/news/2013/sepsis_most_expensive_condition/

(ii) (http://www.biochemia-medica.com/2011/21/282)

(iii) Global Sepsis Alliance; International Organizations Declare Sepsis a Medical Emergency: issued by an expert panel representing 20 adult and pediatric intensive care societies, 2010.

(iv) Martin GS. Sepsis, severe sepsis and septic shock: changes in incidence, pathogens and outcomes. Expert Rev Anti Infect Ther. 2012 June ; 10(6): 701-706

(v) Angus DC, Linde-Zwirble WT, Lidicker J, et al. Epidemiology of severe sepsis in the United States: Analysis of incidence, outcome, and associated costs of care. Crit Care Med. 2001, 29: 1303-1310.

(vi) Kumar A, Roberts D, Wood KE et al. Duration of hypotension prior to initiation of effective antimicrobial therapy is the critical determinant of survival in human septic shock. Critical Care Medicine 2006; 34: 1589-96.Rivers E, Nguyen B, Havstad S, Ressler J, Muzzin A, Knoblich B, Peterson E, Tomlanovich M. Early goal-directed therapy in the treatment of severe sepsis and septic shock. N Engl J Med, 2001. 345(19): p. 1368-77

(vii) Vincent JL, Rello J, Marshall J, et al. International study of the prevalence and outcomes of infection in intensive care units. JAMA. 2009; 302(21):2323-2329

(viii) http://www.sepsisalliance.org/news/2013/sepsis_most_expensive_condition/

(ix) http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3334725/pdf/cc10333.pdf

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