By Angela McDaniels
Seattle, Jan. 17 - Lorus Therapeutics Inc. said it has signed a term sheet for a tax-assisted financing which, if completed, will raise C$21.6 million in net proceeds.
The tax-assisted financing is managed by Biotechnology Management Corp., is subject to a number of conditions and approvals and is expected to close on or before Feb. 15.
Proceeds will be used to in part to finance the early repayment of the company's C$15 million convertible secured debentures due 2009, held by The Erin Mills Development Corp .
In connection with the financing, Lorus said it plans to license some patents related to product candidates Virulizin, GTI-2040 and GTI-2501 in selected countries as part of a transfer of technology businesses to a limited partnership, PHBLP XLIV Limited Partnership. The partnership will commercialize the businesses and Lorus, or a wholly owned subsidiary of Lorus, will manage the partnership after closing.
Lorus will subscribe for class B units of the partnership and JBX Limited Partnership will subscribe for class A units of the partnership. Lorus said the sole limited partner of JBX will be Erin Mills, holder of the convertible debentures.
The partnership will continue to have the ability to sub-license the product candidates to any potential partners with the potential to become a licensee with Lorus when Lorus re-acquires the business.
Between Nov. 15, 2007, and June 30, 2009, Lorus intends to re-acquire the business at its fair market value by purchasing all of the issued and outstanding class A units of the partnership for, among other things, between 25,846,000 and 32,308,500 common shares of Lorus.
In connection with its participation in this transaction , Lorus said it will issue 10 million warrants to Biotechnology Management to acquire common shares of Lorus at an exercise price of C$0.45 per common share.
Lorus is a biopharmaceutical company based in Toronto that develops and commercializes cancer therapies.
| Issuer: | Lorus Therapeutics Inc.
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| Issue: | Tax-assisted financing
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| Amount: | C$21.6 million (net)
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| Manager: | Biotechnology Management Corp.
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| Warrants: | 10 million
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| Warrant exercise price: | C$0.45
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| Symbol: | TSX: LOR
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| Stock price: | C$0.35 at close Tuesday
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