Dor (AMEX:DOR)
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DOR BioPharma, Inc. (AMEX: DOR) ("DOR" or the
"Company"), announced today that it has signed a binding letter of
intent to acquire Gastrotech Pharma A/S ("Gastrotech"), a private
Danish biotechnology company based in Copenhagen, Denmark. Gastrotech
develops therapeutics based on peptide hormones to treat cancer and
gastrointestinal (GI) diseases and conditions. Gastrotech was founded
on technology developed at the Sahlgrenska University Hospital in
Sweden which is known as the development cradle of Growth Hormone and
IGF-1 research.
Following the close of this acquisition, DOR's pipeline will be
bolstered by the addition of two Phase 2 programs: GTP-010, an
analogue of glucagon-like peptide-1 ("GLP-1"), and GTP-200,
Gastrotech's wild type ghrelin compound, a naturally occurring peptide
hormone produced in the stomach to stimulate appetite.
GTP-010 is being studied in collaboration with Eli Lilly in a
Phase 2, double-blinded, placebo-controlled trial for the treatment of
pain associated with irritable bowel syndrome ("IBS"). The product
also has application in the treatment of functional dyspepsia. GLP-1
has been shown to reduce the gastrointestinal contractions associated
with IBS and other GI disorders.
Preclinical and clinical studies have demonstrated GTP-200's
positive effect on regulation of appetite, food intake, and
metabolism. Cancer cachexia is estimated to be a $4 billion market and
an unmet medical need affecting 50% of all cancer patients and fatal
in 40% of patients. GTP-200 completed patient treatment in a Phase 1/2
clinical trial for the treatment of cancer cachexia in September 2005.
Results from this study will be available later this quarter. GTP-200
is also being evaluated for the treatment of gastrectomized patients
as well as for several other indications.
In connection with the closing of this acquisition, DOR will issue
the stockholders of Gastrotech $9 million in shares of DOR common
stock priced at the 10-day volume weighted average price immediately
prior to the close of the transaction. In no event will DOR issue less
than 20 million or more than 30 million shares of its common stock to
Gastrotech's shareholders. This corresponds to a price collar on the
transaction of between $0.30 and $0.45 per share of DOR. In addition,
DOR will pay Gastrotech shareholders another $30 million in cash or
stock upon the occurrence of a series of developmental, regulatory and
commercial milestones, $20 million of which are payable in connection
with first product sales of $50 million and $200 million in any
calendar year.
The companies intend that the acquisition would include the
transfer to DOR of Gastrotech's ongoing clinical programs as well as
all intellectual property and facilities. This acquisition will be
concluded pursuant to the execution of definitive documents and must
be approved by a majority of DOR BioPharma's shareholders. BIO-IB LLC,
a New York based healthcare investment banking boutique, acted as
financial advisor to DOR BioPharma.
Pursuant to the acquisition, DOR intends to maintain an office in
Copenhagen, Denmark which will oversee current and planned clinical
development efforts of the combined company in Europe. At a later
stage, DOR may apply for listing on the Copenhagen Stock Exchange and
maintain a dual listing in Denmark and the United States. DOR will
file a registration statement covering the new shares issued to
Gastrotech after the acquisition is completed. Nordic Biotech, a
venture capital firm based in Copenhagen and focused on biotechnology
companies in the Nordic region, is Gastrotech's largest investor and
will be subject to a staged lockup period in connection with new DOR
shares that it will own.
"We view this acquisition as synergistic with our orBec(R)
program," stated Michael T. Sember, President and Chief Executive
Officer of DOR. "This acquisition will deepen our product pipeline and
fortify DOR's focus on cancer/GI disease research through the
acquisition of two clinical-stage programs that are complementary to
orBec(R). This will enable us to eventually launch other GI focused
cancer products as a follow-up to our anticipated orBec(R) launch.
Gastrotech's senior management team will assume an active role at DOR,
contributing valuable clinical and regulatory expertise to the DOR
team, as we advance these programs towards commercialization. With
regard to GTP-200, we view appetite stimulation through supplemental
ghrelin hormone therapy to be a logical approach to the treatment of
cancer cachexia. We believe that the combination of DOR and Gastrotech
will increase our profile in the investment community and establish us
as a formidable presence in the GI/cancer arena."
In connection with the acquisition, Hans Schambye, M.D., Ph.D.,
currently Chief Executive Officer of Gastrotech will become the Chief
Operating Office of DOR. Dr. Schambye commented, "We are excited to be
joining forces with DOR. Our pipelines complement each other well and
the combined company will have drugs in every stage of clinical
development. orBec(R) is an appealing product, which addresses a
significant unmet medical need. We are impressed with the data package
on orBec(R) and look forward to working on this and DOR's other
programs."
Gastrotech's Chairman, Professor Olle Isaksson, M.D., Chairman of
the Endocrine Department at Gothenburg University added, "I believe
Gastrotech has what it takes to develop successfully as an independent
company, but being acquired by DOR is a good alternative. The combined
company will be stronger than each separate entity and will have a
deep, clinical stage pipeline."
About GTP-200
GTP-200 is based on ghrelin, a naturally occurring peptide hormone
with many important physiological activities, including stimulation of
growth hormone secretion, induction of appetite and modification of
metabolism. Ghrelin is primarily produced in the stomach and is an
extremely potent inducer of appetite and food intake. We intend to
take advantage of these properties and plan to develop GTP-200 for the
treatment of a number of diseases, including cancer cachexia.
About Cancer Cachexia
Cancer cachexia is a serious condition characterized by abnormal
weight loss, weakness and general bodily decline that occurs in many
cancer patients. The condition is a significant factor in the poor
performance and high mortality rate of cancer patients. Cachectic
patients have worse outcomes from surgery, chemotherapy and radiation
therapy. No specific treatment is available for cancer cachexia which
affects around 1 million patients in the US and Europe at any given
time.
About Irritable Bowel Syndrome
Irritable bowel syndrome (IBS) is a chronic, relapsing functional
bowel disorder characterized by symptoms of pain or discomfort in the
digestive tract or abdominal wall and abnormality of bowel habit. IBS
affects more than 80 million people worldwide and pain is among the
most dominant symptoms in these patients. More than three million
patients are estimated to have frequent, severe pain attacks but no
treatment is currently available for these attacks.
About DOR BioPharma, Inc.
DOR BioPharma, Inc. is a biopharmaceutical company focused on the
development of therapeutic products and biomedical countermeasures for
areas of unmet medical need. Our lead product, orBec(R) (oral
beclomethasone dipropionate), is a potent, locally-acting
corticosteroid being developed for the treatment of intestinal
Graft-versus-Host disease (iGVHD), a common serious complication of
bone marrow transplantation for cancer, as well as other GI disorders
characterized by severe inflammation. We plan to file a new drug
application (NDA) with the FDA for orBec(R) for the treatment of iGVHD
in early 2006.
Through our BioDefense Division, we are developing biomedical
countermeasures pursuant to the paradigm established by the recently
enacted Project BioShield Act of 2004. Our biodefense products in
development are bioengineered vaccines designed to protect against the
deadly effects of ricin toxin and botulinum toxin, both of which are
considered serious bioterrorism threats. Our ricin toxin vaccine,
RiVaxTM, has completed the clinical portion of its Phase I clinical
trial in normal volunteers. We have also announced the initiation of a
new botulinum toxin therapeutic development program based on rational
drug design.
For further information regarding DOR BioPharma, please visit the
Company's website located at http://www.dorbiopharma.com.
This press release contains forward-looking statements, within the
meaning of Section 21E of the Securities Exchange Act of 1934, that
reflect DOR BioPharma's current expectations about its future results,
performance, prospects and opportunities, including statements
regarding the potential use of orBec(R) for the treatment of iGVHD and
the prospects for regulatory filings for orBec(R). Where possible, DOR
BioPharma has tried to identify these forward-looking statements by
using words such as "anticipates", "believes", "intends", or similar
expressions. These statements are subject to a number of risks,
uncertainties and other factors that could cause actual events or
results in future periods to differ materially from what is expressed
in, or implied by, these statements. DOR BioPharma cannot assure you
that it will be able to successfully develop or commercialize products
based on its technology, including orBec(R), particularly in light of
the significant uncertainty inherent in developing vaccines against
bioterror threats, manufacturing and conducting preclinical and
clinical trials of vaccines, and obtaining regulatory approvals, that
its technologies will prove to be safe and effective, that its cash
expenditures will not exceed projected levels, that it will be able to
obtain future financing or funds when needed, that product development
and commercialization efforts will not be reduced or discontinued due
to difficulties or delays in clinical trials or due to lack of
progress or positive results from research and development efforts,
that it will be able to successfully obtain any further grants and
awards, maintain its existing grants which are subject to performance,
enter into any biodefense procurement contracts with the U.S.
Government or other countries, that it will be able to patent,
register or protect its technology from challenge and products from
competition or maintain or expand its license agreements with its
current licensors, that it will be able to maintain its listing on the
American Stock Exchange ("AMEX") by completing a transaction which
will provide it with shareholders' equity of at least $6 million prior
to a date set by AMEX for a hearing regarding the continued listing on
AMEX of Dor BioPharma's common stock, or that its business strategy
will be successful. Important factors which may affect the future use
of orBec(R) for iGVHD include the risks that: because orBec(R) did not
achieve statistical significance in its primary endpoint in the
pivotal Phase III clinical study (i.e. a p-value of less than or equal
to 0.05), the FDA may not consider orBec(R) approvable based upon
existing studies, orBec(R) may not show therapeutic effect or an
acceptable safety profile in future clinical trials, if required, or
could take a significantly longer time to gain regulatory approval
than DOR BioPharma expects or may never gain approval; Dor BioPharma
is dependent on the expertise, effort, priorities and contractual
obligations of third parties in the clinical trials, manufacturing,
marketing, sales and distribution of its products; or orBec(R) may not
gain market acceptance; and others may develop technologies or
products superior to orBec(R). Dor BioPharma's business strategy has
been revised to include the issuance of its securities to acquire
companies or assets. Dor BioPharma presently is involved in
negotiations which could result in the issuance of a significant
number of shares of its equity securities, thereby diluting the equity
interests of present stockholders. These and other factors are
described from time to time in filings with the Securities and
Exchange Commission, including, but not limited to, DOR BioPharma's
most recent reports on Form 10-QSB and Form 10-KSB. DOR BioPharma
assumes no obligation to update or revise any forward-looking
statements as a result of new information, future events, and changes
in circumstances or for any other reason.