EPIX and Predix Pharmaceuticals Complete Merger
Wednesday, August 16, 2006
 
EPIX Pharmaceuticals, Inc. (NASDAQ: EPIX - News) announced today the completion of its previously announced merger with Predix Pharmaceuticals Holdings, Inc. Pursuant to the merger agreement, Predix merged with and into EPIX Delaware, Inc. and became a wholly-owned subsidiary of EPIX. The combined company will continue to operate as EPIX.

"We are pleased that the shareholders of both EPIX and Predix approved the combining of the two companies and that the merger is now complete," stated Michael G. Kauffman, M.D., Ph.D., chief executive officer of EPIX Pharmaceuticals. "This merger creates a biopharmaceutical company with a novel MRI angiographic agent, Vasovist(TM), approved in Europe, five internally-discovered clinical-stage product candidates and a deep pipeline of preclinical compounds. We believe these assets provide us with significant opportunities for near-term value creation similar to our collaborations with Amgen and Schering AG."

Andrew Uprichard, M.D., president of EPIX added, "I am excited about the breadth of talent and resources we have assembled that will enhance our ability to improve patients’ lives by developing products that meet significant, unmet clinical needs and thereby drive significant shareholder value."

The combined company has a broad pipeline of product candidates, an experienced management team and approximately $114 million in cash and marketable securities as of June 30, 2006. Vasovist(TM), EPIX’s novel blood pool imaging agent, which is marketed in Europe by Schering AG, has been recommended for approval in Australia, and is the subject of an appeal following two approvable letters from the U.S. Food and Drug Administration. In addition, the combined company has five drug candidates in clinical trials:

PRX-00023 in Phase 3 for anxiety, with the results of this trial expected later this year;
EP-2104R in Phase 2 for MRI imaging of arterial and venous blood clots;
PRX-08066 in Phase 2 development for pulmonary hypertension associated with chronic obstructive pulmonary disease (CODP);
PRX-03140, which has completed Phase 1b trials, is expected to enter Phase 2 in combination with Aricept® for Alzheimer’s disease later this year; and
PRX-07034 in Phase 1 and expected to be developed for the treatment of obesity and also for cognitive impairment (associated with Alzheimer’s disease or schizophrenia).
The combined company also has a portfolio of several pre-clinical product candidates, including a partnership with Amgen around preclinical compounds targeting S1P1 for the treatment of autoimmune diseases. EPIX has begun to initiate discussions to selectively license its later-stage products to larger pharmaceutical or biotechnology companies at a point where it can maximize the value of these products.

Dr. Kauffman added, "With several milestones on the horizon, including the FDA’s response to our appeal regarding Vasovist and the results from our Phase 3 clinical trial of PRX-00023 in patients with generalized anxiety disorder, we believe we will have continued momentum and significant growth opportunities going forward."

Reverse Stock Split and Merger Consideration

In connection with the merger, EPIX effected a 1-for-1.5 reverse stock split of its outstanding common stock. Accordingly, each Predix share (on an as-converted to common stock basis) was converted in the merger into the right to receive .826698 shares of EPIX common stock. In addition, all outstanding Predix options and warrants were assumed by EPIX in the merger. The Predix stockholders, option holders and warrant holders are also entitled to receive their pro rata portion of an additional milestone payment of $35 million. Pursuant to the terms of the merger agreement, the board of directors has determined to pay $20 million of the milestone payment in cash on October 29, 2006. The remaining $15 million of the milestone will be paid in shares of EPIX common stock on October 29, 2007 except to the extent that such shares would exceed 49.99% of EPIX’s outstanding shares immediately after such milestone payment when combined with all shares of EPIX issued in the merger and issuable upon exercise of all Predix options and warrants assumed in the merger.

The post reverse-split common stock of EPIX is anticipated to start trading on the NASDAQ Global Market on August 17, 2006 under the symbol "EPIX." As a result of the merger and reverse stock split, a "D" will be appended to EPIX’s NASDAQ trading symbol for the next 20 days.
 
 

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