EDMONTON, Alberta, Feb. 5, 2013 (GLOBE NEWSWIRE) -- Isotechnika Pharma Inc. (TSX:ISA) ("Isotechnika" or the "Company") and privately-held Aurinia Pharmaceuticals Inc. ("Aurinia") announced today the signing of a Binding Term Sheet ("Term Sheet") for the merger of the two companies, creating a premier clinical stage pharmaceutical company focused on the global nephrology market.
Aurinia is a spin-out from Vifor Pharma ("Vifor"), a company of the Switzerland-based Galenica Group ("Galenica"). In January 2012, Isotechnika announced that it had granted Vifor an exclusive license for the Company's lead drug, voclosporin, for the treatment of lupus and proteinuric nephrology indications. Aurinia's current leadership team is comprised primarily of former senior managers, Directors and Officers of Aspreva Pharmaceuticals ("Aspreva"), which Galenica acquired for C$915 million in 2008. While at Aspreva, this management team executed one of the largest and most important lupus nephritis studies ever conducted, called the Aspreva Lupus Management Study ("ALMS"), which resulted in the emergence of mycophenolate mofetil as a new standard treatment for patients suffering from this devasting and potentially fatal disease. Aurinia now holds certain rights to this large ALMS database and holds the license for voclosporin in lupus nephritis. Aurinia's lupus rights and database will be combined in the newly merged company with the transplantation and autoimmune rights, and the database held by Isotechnika.
The Term Sheet sets forth the main criteria to be incorporated into a definitive merger agreement under which Isotechnika will acquire 100% of the outstanding securities of Aurinia. The merger is expected to be effected by an exchange of Isotechnika shares for securities of Aurinia, resulting in a 60:40 post-merger ownership split between Isotechnika and Aurinia, respectively. In addition, Isotechnika and Aurinia have negotiated a tripartite settlement with ILJIN Life Science Co. Ltd. ("ILJIN") pursuant to which, upon the successful completion of the proposed merger, the combined company will re-acquire full rights to voclosporin for autoimmune indications including lupus, and transplantation in the United States, Europe and other regions of the world, outside of Canada, Israel, South Africa, China, Taiwan and Hong Kong. In return, ILJIN will be entitled to receive certain pre-defined future milestone payments in the aggregate amount of C$10 million, plus up to C$1.6 million upon the new company reaching certain financing milestones. ILJIN will own 25% of the issued and outstanding shares of the merged company.