RE: BT: Protox gets credibility boost from WarburgA URL address should always be posted in hypertext format. Here it is after a bit of cut and paste:
Protox gets credibility boost from Warburg Pincus
November 9, 2010
An equity injection of up to $35million from private equity giant Warburg Pincus represents a huge vote ofconfidence in Protox Therapeutics (TSX:PRX) and its lead PRX302 drug forenlarged prostate or benign prostatic hyperplasia (BPH), with the drugpotentially able to target two other diseases: prostate cancer and prostatitis.
“We went through an incredibleamount of scrutiny with respect to the investment they decided to make,” CEODr. Fahar Merchant says in an exclusive interview with BioTuesday.ca.“The due diligence team they brought together was quite amazing. Theybrought in experts in intellectual property, pricing, reimbursement, marketresearch, drug development, regulatory activities, including a former directorof the FDA urology division.”
Subject to shareholder approval in avote on Nov. 16, 2010, Protox is in line to receive an initial $10 millioninvestment at the end of the month and an additional $25 million investment ifthe FDA gives the company a special protocol assessment before Sept. 30, 2011for its Phase 3 clinical trial with PRX302.
On closing the first tranche, threemembers of the current board will be replaced by Warburg Pincus nominees,including Dr. Lars Ekman who will be appointed chairman of the board.Within 90 days of the closing of the first tranche, an additional independent designateacceptable to the company and Warburg, as well as an additional Warburgdesignee will be appointed to the Board. After the second tranche and fullyexercising its warrants, Warburg Pincus will own up to 59% of Protox.
Dr. Merchant recalls how intriguedhe was that an investor the size of Warburg Pincus agreed to meet with him andhear the Protox story while he was making the rounds in the U.S. earlier thisyear. “It didn’t make sense that they’d meet with us about the smallfinancing rounds we had been doing. So my antenna was raised. Theycame to us later and indicated they would like to do something substantial,” herecalls. “The past few months were incredibly intensive.”
In response to the Warburg Pincusdeal, Dundee Capital Markets analyst David Martin moved Protox to “fullcoverage”, with a “buy, speculative risk” target and 12-month price target of85 cents. The target would increase to $1 after the second tranche isreceived, he writes. The stock closed Friday at 44.5 cents.