Ottawa Citizen ArticleOttawa Citizen article
Back in business: Bryden joins board of PharmaGap
The Ottawa Citizen
Tue 07 Dec 2004
Page: F1 / Front
Section: Business
Byline: Bert Hill
Source: The Ottawa Citizen
Rod Bryden is taking on PharmaGap, a struggling start-up developing a cancer treatment, as his first big project in the wake of clearing out the financial mess left from his ownership of the Ottawa Senators.
Robert McInnis, a long-term associate of Mr. Bryden, will become the chief executive of PharmaGap; Mr. Bryden will sit on the board.
Their job is to develop a business plan that will allow the two-year-old National Research Council spinoff find new financing for drug development.
SC Stormont, Mr. Bryden's consulting firm, has the right to buy about 20 per cent of PharmaGap stock for $2 million over the next 18 months.
PharmaGap has repeatedly run short of cash in efforts to move testing of GLI0005, a compound with potential to treat human cancers and assess the disease-immunity of livestock, from the test-tube to animal testing stages.
It might be effective in treating lung, prostate and certain forms of breast cancer, and neuroblastoma, a lethal form of childhood cancer.
PharmaGap has deals with an undisclosed major pharmaceutical company and an animal drug company. It has also done some contract research work to generate revenue.
But a chronic shortage of cash has prevented the company from developing its technology, forcing employees into job-sharing arrangements to save cash.
Mr. Bryden said he is impressed with the quality of the PharmaGap scientific research and the dedication of a team of about 20 staff to keep the company alive "at a fraction of the salaries they would get in the open market."
Pharmagap plans to raise $500,000 through a private placement primarily to existing shareholders later this month.
Mr. Bryden said he won't be part of that round "because, as you know, I have nothing."
To settle $125.8 million in personal guarantees left from his unsuccessful efforts to refinance debts owned by the Ottawa Senators and Corel Centre, Mr. Bryden surrendered $1.1 million in borrowed cash and his remaining World Heart Corp. stock this month.
PharmaGap stock traded close to $2 in the spring of 2002 when it went public, raising about $3 milion. The shares fell sevens cents to 28 cents when trading was halted yester to announce the new deal.
PharmaGap chairman Dan Larkin said he does not believe Mr. Bryden's well-publicized troubles at the Senators and with WorldHeart will hurt the tiny company.
"Pharmagap has great technology and we are very fortunate to get someone of Rod's financial acumen to help us develop the business side."
He said the new management will allow company founders Jenny Phipps, the chief scientific officer, and her husband, Michael, to concentrate on developing their drug.
Robert Letellier, a founder and former chief executive, continues on board. Simon Goulet continues as chief operating officer and Gerald Leahy is the new chief financial officer.