- Combined Company Will Have Three Oncology Products in Clinic - -
Lead Candidate Targets Hormone Refractory Prostate and Non-Small
Cell Lung Cancers - - Conference Call to be Held Wednesday, May
28th, at 11:00 a.m. Pacific Time - BOTHELL, WA and VANCOUVER, May
28 /PRNewswire-FirstCall/ -- Sonus Pharmaceuticals, Inc.
(NASDAQ:SNUS) and OncoGenex Technologies Inc., a privately held
biopharmaceutical development company, today jointly announced the
signing of a definitive agreement to merge the two companies. The
combined company will operate as OncoGenex Pharmaceuticals, Inc.
Scott Cormack, OncoGenex' current President and Chief Executive
Officer will continue as President and CEO of the company. As a
result of the merger, the combined company will have a strong
oncology pipeline addressing distinct unmet needs in the treatment
of cancer, including three candidates in various stages of clinical
development. Its lead candidate, OGX-011, is being evaluated in
five Phase 2 clinical trials, each of which has completed patient
enrollment. Interim study results have previously been presented
for each of the five clinical trials. "In October 2007, Sonus
outlined its strategy to rebuild shareholder value," said Mr.
Michael Martino, President and Chief Executive Officer of Sonus.
"Our goal was to identify quality assets to enhance, complement and
leverage the strengths of our existing clinical pipeline,
capabilities, infrastructure, cash and public listing. Today we are
pleased to announce the result of that rigorous process in the
proposed merger of Sonus and OncoGenex Technologies. We believe
that this transaction represents an outstanding value creation
opportunity for shareholders." "We were attracted by the immediate
value and the potential future value this transaction creates for
Sonus and OncoGenex shareholders," said Mr. Cormack. "Our companies
are built around very similar approaches to developing oncology
products that provide better therapeutic alternatives for cancer
patients. This transaction provides an exciting opportunity for the
stockholders of both companies to realize the full value of each
company's assets." The combined company will have a deep oncology
pipeline, with each product candidate having a distinct mechanism
of action and representing a unique opportunity for cancer drug
development. In addition to OGX-011, the pipeline includes two
product candidates in Phase 1, and one additional product candidate
that the company anticipates will move into Phase 1 clinical
development within 18 months. Details on the specific products
follow: - OGX-011, also known as custirsen sodium, inhibits the
production of clusterin, a protein that is associated with
treatment resistance in a number of solid tumors, including
prostate, breast, non-small cell lung, ovarian, and bladder
cancers. It has potential applicability as a therapeutic in a broad
number of cancers at different stages and can potentially be used
in combination with a variety of commonly used cancer treatments,
including chemotherapy, radiation therapy, and hormone ablation
therapy. Preliminary data in a Phase 2 clinical trial evaluating
OGX-011 in combination with second-line chemotherapy in patients
with hormone refractory prostate cancer has shown that retreatment
with docetaxel in combination with OGX-011 may reverse docetaxel
resistance and improve survival. OGX-011 is planned to enter
randomized clinical trials in patients with hormone refractory
prostate cancer that will support a NDA submission; - OGX-427 is
designed to reduce production of Hsp27, a protein that is
over-produced in response to many cancer treatments including
hormone ablation therapy, chemotherapy and radiation therapy.
OGX-427 is in a Phase 1 clinical trial for the treatment of solid
tumors including prostate, non-small cell lung, breast, ovarian,
and bladder cancers. The company anticipates that the single-agent
aspect of this trial will be completed in the second half of 2008,
and Phase 2 clinical development will begin in 2009. Like OGX-011,
this product candidate has potential as a treatment in a broad
number of cancers; - SN2310 is a novel prodrug of SN-38, which is a
potent anti-cancer drug belonging to the class of topoisomerase I
inhibitors. It is currently in a Phase 1 trial and progress is
being made to determine its safety and pharmacokinetic profile, in
addition to the maximum tolerated dose. SN2310 is designed to
enhance the delivery and exposure of SN-38 to the tumor by
providing greater prodrug conversion and a longer half-life than
achieved with irinotecan; and - OGX-225 aims to reduce the
production of both Insulin-Like Growth Factor Binding Protein -2
and Insulin-Like Growth Factor Binding Protein -5 with a single
product to enhance treatment sensitivity and delay tumor
progression. IGFBP-2 and IGFBP-5 are both hormones that make an
alternate hormone, IGF-1, available to the tumor that facilitates
continued tumor growth. Employing OGX-225 as a single product to
simultaneously inhibit the production of both IGFBP-2 and IGFBP-5
has the potential to delay disease progression in cancers dependent
upon IGF-1 for tumor growth. OGX-225 is in pre-clinical development
and has completed pre-clinical pharmacology. Terms of the Agreement
Under the terms of the proposed merger, OncoGenex' stock and
debenture holders will receive approximately 37 million shares of
Sonus common stock and OncoGenex will become a wholly owned
subsidiary of Sonus Pharmaceuticals, Inc. Following the close of
the proposed transaction, OncoGenex stockholders will hold 50% of
Sonus' outstanding shares of common stock. An additional 25 million
shares will be held in escrow and released to OncoGenex'
shareholders upon achievement of specific milestones that are
intended to demonstrate continued development of OncoGenex' assets
and execution of the combined company's business plan. The proposed
transaction received unanimous approval from the Boards of
Directors of Sonus and OncoGenex, and is expected to be completed
in the third quarter of 2008, subject to regulatory approval, and
the approval of Sonus' and OncoGenex' shareholders. The Board of
Directors of the combined company will be composed of seven
members, most of whom will be drawn from the existing Boards of
both companies. Three members will be nominated by the Sonus Board
members, three members will be nominated by OncoGenex Board members
and those combined six members will appoint a seventh Board member.
Ferghana Partners acted as financial adviser to Sonus throughout
the selection, analysis and negotiation of this transaction.
Additionally, Leerink Swann & Co. provided an independent
fairness opinion to the Board of Directors of Sonus. Conference
Call The company will hold a joint conference call on Wednesday,
May 28, 2008 at 11:00 a.m. Pacific Time to discuss the proposed
merger. Mike Martino, President and CEO of Sonus, and Scott
Cormack, OncoGenex' President and CEO will host the call. To
participate in the live call by telephone, please dial (866)
250-2351 from the U.S. or (303) 262-2143 from outside the U.S.
Please use conference ID number 11114594 followed by the number
sign. Participants are asked to call the above numbers
approximately 5-10 minutes prior to the start time. Additionally,
the call will be broadcast live and can be accessed on the Sonus
web site at http://ir.sonuspharma.com/events.cfm. A telephone
replay of the call will be available from May 28, 2:00 p.m. Pacific
Time, for three business days at 800-405-2236 or 303-590-3000 for
international calls; Conference ID: 11114594 followed by the number
sign. Additional Information As previously announced on November 5,
2007, Sonus received notification from the staff of The NASDAQ
Stock Market indicating that the company is not in compliance with
the $1.00 minimum bid price requirement for continued listing under
Marketplace Rule 4450(a)(5). Sonus announced on May 8, 2008, that
it had received a Determination Letter from NASDAQ indicating that
the company had failed to regain compliance and is therefore to be
delisted from The NASDAQ Global Market. Sonus has requested a
hearing before a NASDAQ Listing Qualifications Panel to appeal
NASDAQ's determination and intends to seek continued listing of its
common stock. As part of its plan of compliance, Sonus also intends
to effect a reverse stock split, subject to stockholder approval.
Subject to NASDAQ's determination, Sonus intends to submit an
application to change the ticker symbol to "OGXI" following
consummation of the merger. About Sonus Pharmaceuticals, Inc.
Headquartered near Seattle, Washington, Sonus Pharmaceuticals, Inc.
is focused on the development of cancer drugs that are designed to
provide better efficacy, safety and tolerability, and ease of use.
Sonus moved an oncology product candidate, SN2310, into a Phase 1
clinical trial in September 2006. For additional information on
Sonus, including past news releases, please visit
http://www.sonuspharma.com/. About OncoGenex Technologies Inc.
OncoGenex Technologies Inc. is a private biopharmaceutical company
committed to the development and commercialization of new cancer
therapies that address treatment resistance in cancer patients. The
company's three product candidates are designed to inhibit the
production of specific proteins associated with treatment
resistance and which are over-produced in response to a variety of
cancer treatments. OGX-011 is completing evaluation in five Phase 2
clinical studies in prostate, lung, and breast cancers. OGX-427 has
begun evaluation in Phase 1 clinical studies, while the third
product candidate, OGX-225, has completed preclinical pharmacology
studies. More information is available at http://www.oncogenex.ca/.
Safe Harbor This press release contains forward-looking statements
within the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, including statements
concerning the proposed merger between Sonus and OncoGenex. These
statements are based on management's current expectations and
beliefs and are subject to a number of risks, uncertainties and
assumptions that could cause actual results to differ materially
from those described in the forward-looking statements. All
statements other than statements of historical fact are statements
that could be deemed forward-looking statements. For example,
statements of expected synergies, the strength of the combined
oncology product pipeline, the timing of clinical trials and
development efforts, the results of clinical and pre-clinical
studies, the timing of closing, execution of integration plans and
management and organizational structure are all forward-looking
statements. The potential risks and uncertainties include, among
others, the possibility that the merger does not close or that the
closing may be delayed, synergies and costs savings will not be
achieved or that the companies are unable to successfully execute
their integration strategies, the timing and costs of clinical
trials and regulatory approvals, risks that clinical trials will
not be successful, risks associated with obtaining funding from
third parties or completing a financing necessary to support the
costs and expenses of clinical studies as well as research and
development activities, risks that the combined company will not be
able to maintain listing on NASDAQ, as well as other risks relating
to the development, safety and efficacy of therapeutic drugs and
potential applications for these products. A more complete
discussion of risks and uncertainties that may affect
forward-looking statements is included in Sonus Pharmaceuticals'
filings with the Securities and Exchange Commission, including its
Annual Report on Form 10-K for fiscal year 2007, and its Quarterly
Report on Form 10-Q for the first quarter of 2008. No assurances
can be given that any of the events anticipated by the
forward-looking statements will transpire or occur, or if any of
them do so, what impact they will have on the results of operations
or financial condition of Sonus. The Company undertakes no
obligation to update the forward-looking statements contained
herein or to reflect events or circumstances occurring after the
date hereof. Proxy Solicitation In connection with the proposed
merger, Sonus intends to file with the SEC a Proxy Statement and
related materials and to mail to its stockholders the final Proxy
Statement containing information about Sonus, OncoGenex and the
proposed merger. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ
THE PROXY STATEMENT AND THE OTHER RELEVANT MATERIALS, CAREFULLY AND
IN THEIR ENTIRETY, WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT SONUS, ONCOGENEX AND THE
PROPOSED MERGER. Sonus and OncoGenex, and certain of their
directors, executive officers and other members of management and
employees may be deemed to be participants in the solicitation of
proxies in connection with the proposed transaction. Information
about the directors and executive officers of Sonus, including
their respective security holdings, is set forth in Sonus'
Amendment # 1 to Form 10-K for the fiscal year ended December 31,
2007, filed with the Securities and Exchange Commission on April
29, 2008. As of May 27, 2008, OncoGenex' directors and executive
officers beneficially owned approximately 1,755,000 shares, or
14.5%, of OncoGenex' capital stock. Investors may obtain additional
information regarding the interests of OncoGenex, Sonus and their
respective executive officers and directors in the merger by
reading the Proxy Statement for such proposed transaction when it
becomes available. The Proxy Statement and other relevant
materials, when they become available, and any other documents
filed by Sonus with the SEC, may be obtained free of charge at the
SEC's web site at http://www.sec.gov/. In addition, investors and
security holders may obtain free copies of the documents, when they
are available, filed with the SEC by Sonus by directing a request
to: Sonus Pharmaceuticals, Inc., 1522 217th Place SE, Suite 100,
Bothell, WA 98021, Phone (425) 686-1500, Fax (425) 686-1600,
Attention: Investor Relations. CONTACT: Sonus Contact: Investor:
Doug Sherk, Dahlia Bailey, (415) 896-6820, ; Media: Steve DiMattia,
(917) 620-0590, ; OncoGenex Investor & Media Contact: Jason
Spark, Porter Novelli Life Sciences, (619) 849-6005, DATASOURCE:
OncoGenex Technologies Inc. CONTACT: Sonus Contact: Investor: Doug
Sherk, Dahlia Bailey, (415) 896-6820, ; Media: Steve DiMattia,
(917) 620-0590, ; OncoGenex Investor & Media Contact: Jason
Spark, Porter Novelli Life Sciences, (619) 849-6005,
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