PharmAthene and Healthcare Acquisition Corp. Announce Definitive Merger Agreement
January 22 2007 - 7:00AM
PR Newswire (US)
Transaction Provides PharmAthene With Up to $70 Million in Cash
ANNAPOLIS, Md., Jan. 22 /PRNewswire/ -- Privately-owned
PharmAthene, Inc., a leading biodefense company specializing in the
development and commercialization of medical countermeasures
against biological and chemical terrorism, and Healthcare
Acquisition Corp. (AMEX:HAQ), a publicly-traded special purpose
acquisition company, announced today that they have signed a
definitive merger agreement under which Annapolis-based PharmAthene
will become a public company through a merger with Healthcare
Acquisition Corp. The new company will be named PharmAthene, Inc.,
and it is expected that its shares will trade on the American Stock
Exchange upon completion of the merger. Healthcare Acquisition
Corp. is expected to have up to approximately $70 million in cash
at the closing before payment of expenses, which will remain in the
merged company and be available to finance product development,
clinical trials, research and development, and potential product
and technology acquisitions and for general corporate purposes.
David P. Wright, President and Chief Executive Officer of
PharmAthene, will remain President and Chief Executive Officer of
the company, which will be headquartered in Annapolis, Maryland
with research and development facilities in Montreal, Canada. "A
merger with HAQ provides a strong financial foundation with
enhanced access to capital and will further PharmAthene's strategy
of taking a leadership position in biodefense to help meet the
urgent biosecurity needs of the U.S. and its allies," Mr. Wright
said. "Our strategy emphasizes rapid product development and this
transaction represents the best way to meet both our short- and
long-term growth objectives." Mr. Wright added, "We are seeking to
apply the classic defense contractor model of developing multiple
government customers -- Defense, Homeland Security, state and
regional authorities -- and then adapting our products for wider
commercial use. Biodefense products should be available to all
levels of government, large venues, commercial offices, hotels,
hospitals and even to individual consumers, and we intend initially
to develop and commercialize products for all of these markets
while evaluating dual-use applications for our products within
broader commercial markets." John Pappajohn, Chairman of Healthcare
Acquisition Corp., said, "This merger combines PharmAthene's
research, development and marketing strengths with HAQ's enhanced
access to the capital markets. PharmAthene has a strong management
team with a proven track record -- collectively, the team has
previously commercialized 30 pharmaceutical products with over $4
billion in revenues. They are a highly focused, creative team with
the ability to execute and a reputation for expanding their product
markets." "Since its inception, PharmAthene has raised
approximately $65 million in venture capital and private equity
from premier healthcare investors, and been awarded government
contracts that can provide up to $246 million in government
funding. They currently have two best-in-class products --
Valortim(TM) for the prevention and treatment of anthrax infection
and Protexia(R) to prevent and treat nerve agent poisoning -- each
targeting high priority biodefense needs. A recently awarded
contract for up to $213 million from the Department of Defense for
Protexia(R) validates management's ability to execute," Mr.
Pappajohn added. SUMMARY OF THE TRANSACTION * Under the terms of
the agreement, Healthcare Acquisition Corp. will issue 12.5 million
new shares to PharmAthene's shareholders, resulting in
PharmAthene's current shareholders owning at least 52% of the
outstanding basic shares upon completion of the merger (subject to
adjustment to the extent Healthcare Acquisition Corp. shareholders
exercise their right to convert their Healthcare Acquisition Corp.
shares into cash). * PharmAthene holders will agree to certain
lockup provisions prohibiting the sale of any of the Healthcare
Acquisition Corp. shares they receive in the merger until a minimum
of six months after consummation of the merger, with only 50% of
such shares released from the lockup six months after the merger,
and the remaining 50% being released twelve months after the
merger. * In the event that PharmAthene enters into a contract
prior to December 31, 2007 for the sale of Valortim(TM) with the
U.S. government for more than $150,000,000 in anticipated revenue,
PharmAthene's shareholders will also be eligible for additional
cash payments, not to exceed $10 million, equal to 10% of the
actual collections from the sale of Valortim(TM). * PharmAthene's
currently outstanding secured convertible notes will be exchanged
for $12.5 million of new unsecured 8% Convertible Notes maturing in
24 months. The Convertible Notes will be convertible at the option
of the holder into common stock at $10.00 per share and may be
redeemed by the company without penalty after 12 months. * HAQ's
9.4 million warrants, expiring July 2010 with an exercise price of
$6.00 per share, will remain outstanding, giving the combined
company potential access to an additional $56.4 million if all of
the warrants are exercised. * PharmAthene will merge with a
subsidiary of Healthcare Acquisition Corp. and, following the
transaction, will be a subsidiary of HealthCare Acquisition Corp;
Healthcare Acquisition Corp will change its name to PharmAthene,
Inc. The merger has been approved by the Boards of Directors of
both companies and by the requisite majority of PharmAthene's
shareholders and is subject to approval by Healthcare Acquisition
Corp.'s shareholders, regulatory approval and other customary
closing conditions. In addition, closing of the merger is also
conditioned on holders of fewer than 20% of the shares of
Healthcare Acquisition Corp. common stock voting against the merger
and electing to convert their Healthcare Acquisition Corp. common
stock into cash. As a result of the execution of this agreement,
pursuant to its certificate of incorporation, Healthcare
Acquisition Corp. has until August 3, 2007 to complete the
transaction before it would otherwise be required to liquidate.
Bear, Stearns & Co. Inc. served as financial advisor to
PharmAthene in connection with the transaction and Maxim Group
served as financial advisor to Healthcare Acquisition Corp.
McCarter & English is serving as counsel to PharmAthene in the
transaction and Ellenoff Grossman & Schole LLP is acting as
counsel to Healthcare Acquisition Corp. This communication is being
made in respect of the proposed merger transaction involving
Healthcare Acquisition Corp. (HAQ) and PharmAthene, Inc. HAQ will
promptly file with the SEC a current report on Form 8-K, which will
include the merger agreement and related documents. In addition,
HAQ will file a proxy statement with the SEC in connection with the
transaction and mail the final proxy statement to HAQ shareholders
of record at the record date for the special meeting of the
shareholders to be held to provide approvals relating to the
proposed transaction. The proxy statement that HAQ plans to file
with the SEC and mail to its shareholders will contain information
about HAQ, PharmAthene, the proposed merger, and related matters.
SHAREHOLDERS ARE URGED TO READ THE PROXY STATEMENT CAREFULLY WHEN
IT IS AVAILABLE, AS IT WILL CONTAIN IMPORTANT INFORMATION THAT
SHAREHOLDERS SHOULD CONSIDER BEFORE MAKING A DECISION ABOUT THE
MERGER. In addition to receiving the proxy statement and proxy card
by mail, shareholders will also be able to obtain the proxy
statement, as well as other filings containing information about
HAQ, without charge, from the SEC's website (http://www.sec.gov/)
or, without charge, by contacting Matthew Kinley at HAQ at (515)
244-5746. This announcement is neither a solicitation of proxy, an
offer to purchase, nor a solicitation of an offer to sell shares of
HAQ. HAQ and its executive officers and directors may be deemed to
be participants in the solicitation of proxies from HAQ's
shareholders with respect to the matters relating to the proposed
merger. PharmAthene may also be deemed a participant in such
solicitation. Information regarding HAQ's executive officers and
directors is available in HAQ's Annual Report on Form 10-K, for the
year ended December 31, 2005, and its most recent Report on Form
10-Q for the fiscal quarter ended September 30, 2006. Information
regarding any interest that PharmAthene or any of the executive
officers or directors of PharmAthene may have in the transaction
with HAQ will be set forth in the proxy statement that HAQ intends
to file with the SEC in connection with the matters to be approved
in connection with the proposed merger. Shareholders of HAQ can
obtain this information by reading the proxy statement when it
becomes available. HAQ did not hold an annual meeting of its
shareholders in 2006, as required under the rules and regulations
of the American Stock Exchange. This was because HAQ is a specified
purpose acquisition company, and, as disclosed in its prospectus,
it has had no operations other than searching for and consummating
a business combination. HAQ also has had limited funds available to
it with which to search for and consummate a business combination,
and an annual meeting would have required a diversion of these
scarce funds from HAQ's search, as well as diverting the efforts of
its management in their search for a target company. Any items
required to be covered in HAQ's 2006 annual meeting of shareholders
will be dealt with in the special meeting of HAQ's shareholders
called to approve the transactions disclosed in this press release,
as set forth above. About PharmAthene, Inc. PharmAthene, a
privately-held biodefense company, was formed in 2001 to meet the
critical needs of the United States by developing biodefense
products. PharmAthene is dedicated to the rapid development of
important and novel biotherapeutics to address biological pathogens
and chemicals that may be used as weapons of bioterror.
PharmAthene's lead programs include Valortim(TM) (being
co-developed with Medarex, Inc.) and Protexia(R). For more
information on PharmAthene, please visit its website at
http://www.pharmathene.com/. About Healthcare Acquisition Corp. Des
Moines-based Healthcare Acquisition Corp. was jointly formed by
healthcare investing pioneers, John Pappajohn and Derace L.
Schaffer, M.D. Healthcare Acquisition Corp. is a special purpose
acquisition company focused on the healthcare industry. The Company
raised $75.2 million through an IPO in July, 2005. As of September
30, 2006, the company held approximately $70 million in trust. The
Company's shares trade on the American Stock Exchange, under the
symbol HAQ and its warrants trade on the American Stock Exchange
under the symbol HAQW. Forward Looking Statement Disclosure This
press release contains certain "forward-looking statements' within
the meaning of the Private Securities Litigation Reform Act of
1995, as amended, including statements regarding the efficacy of
potential products, the timelines for bringing such products to
market and the availability of funding sources for continued
development of such products. Forward-looking statements are based
on management's estimates, assumptions and projections, and are
subject to uncertainties, many of which are beyond the control of
Healthcare Acquisition Corp. and PharmAthene. Actual results may
differ materially from those anticipated in any forward-looking
statement. Factors that may cause such differences include the
risks that (a), there may be regulatory or litigation obstacles to
completing the merger, or shareholders of Healthcare Acquisition
Corp. may not approve the merger, (b) the American Stock Exchange
market may not accept the shares of the merged company for
continued listing, (c), (d) potential products that appear
promising to PharmAthene or any of their collaborators cannot be
shown to be efficacious or safe in subsequent preclinical or
clinical trials, (e) , PharmAthene or their collaborators will not
obtain appropriate or necessary governmental approvals to market
these or other potential products, (f) PharmAthene may not be able
to obtain anticipated funding for their development projects or
other needed funding, (g) PharmAthene may not be able to secure
funding from anticipated government contracts and grants, and (h)
PharmAthene may not be able to secure or enforce adequate legal
protection, including patent protection, for their products. More
detailed information about Healthcare Acquisition Corp. and risk
factors that may affect the realization of forward-looking
statements, including the forward-looking statements in this press
release is set forth in Healthcare Acquisition Corp.'s filings with
the Securities and Exchange Commission Healthcare Acquisition Corp.
urges investors and security holders to read those documents free
of charge at the Commission's Web site at http://www.sec.gov/.
Interested parties may also obtain those documents free of charge
from Healthcare Acquisition Corp. Forward-looking statements speak
only as to the date they are made, and except for any obligation
under the U.S. federal securities laws, Healthcare Acquisition
Corp. undertakes no obligation to publicly update any
forward-looking statement as a result of new information, future
events or otherwise. DATASOURCE: PharmAthene, Inc. CONTACT: Stacey
Jurchison of PharmAthene, Inc., +1-410-571-8925, ; or Matthew
Kinley of Healthcare Acquisition Corp., +1-515-244-5746, Web site:
http://www.pharmathene.com/
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