XTL Biopharmaceuticals To Acquire Kitov Pharmaceuticals
HERZLIYA, Israel, June 19, 2012 /PRNewswire/ --
XTL Bi opharmaceuticals Ltd. (TASE:XTL)( OTC :XTLBY), a biopharmaceutical development company, announced today it will acquire Kitov Pharmaceuticals Ltd. in consideration for shares as well as cash milestone payments throughout Kitov's development and business progress of up to $48 million, which may be payable in XTL shares.
Kitov Pharmaceuticals Ltd., a company that researches and develops combination drug products, has focused on the treatment of hypertension and pain induced by osteoarthritis with its lead drug product, which is now ready to begin a phase 3 clinical trial under an FDA Special Protocol Assessment (SPA).
According to the agreement, XTL shall allocate shares and warrants to Kitov shareholders representing 19.9% of the Company's issued and outstanding share capital upon such allocations. In addition, XTL shall pay cash milestone payments throughout the development and business progress, which may add up to $48 million. XTL may pay such payment by issuing its shares representing up to 26.4% of XTL issued and outstanding share capital post the transaction.Kitov shareholders undertook a voluntary lock-up period in relation to the shares received in the transaction (including shares received upon meeting milestones) for a period of 12 to 24 months from the date of closing, except for part of the milestone payment shares. XTL has undertaken to execute a phase 3 development plan for Kitov's lead drug. According to this undertaking, the Company will invest up to $1.5 million in financing the sole planned pivotal trial, which will be conducted over an 18-month period. If XTL fails to meet this undertaking (to perform the above development plan) excluding certain cases, the voluntary lock-up period will expire for 50% of the Company's restricted shares allocated to Kitov. Kitov estimates it will require an accumulative investment of approximately $9 million for the development of its lead drug and through its approval for marketing. Upon the completion of the transaction, Dr. Paul Waymack will join the board of directors of XTL as Active Chairman of the board and President. He will be responsible for the clinical and regulatory development of all of XTL's products. Dr. Waymack is the founder of Kitov and has many years of experience in drug development, including interacting with the U.S. Food and Drug Administration (FDA). Kitov will have the right to appoint an additional director to XTL's board. The completion of the transaction is contingent upon meeting several conditions, among others: Due diligence; pre-ruling from the Israeli Tax Authority; valuation report for Kitov; approval of the general meeting of the XTL's shareholders; approval of the Tel-Aviv Stock Exchange; completion of the transaction by September 15, 2012. "We are happy to acquire Kitov with its late stage drugs. Kitov and its experienced team bring a high level of development capabilities, especially Dr. Paul Waymack, who previously worked for the FDA and has been developing drugs for many years" said David Grossman, CEO of XTL, "We are sure his contribution will benefit all of our products in development". Ronen Twito, XTL's Deputy CEO and CFO noted that "the structure of the transaction, by which XTL makes a down payment in shares, plus additional shares or payments upon meeting milestones throughout the development, creates common business interest with Kitov shareholders, which enables putting the financial and business efforts for the benefit of the products development and success of XTL". About XTL Biopharmaceuticals Ltd. ("XTL) XTL Biopharmaceuticals, Ltd., a biopharmaceutical company, focuses on the acquisition, development, and commercialization of pharmaceutical products for the treatment of clinical unmet needs. XTL is focused on late stage clinical development of drugs for the treatment of multiple myeloma, schizophrenia, and hepatitis C.
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