FOR IMMEDIATE RELEASE
Contact: Jim Hertzog
Xytronyx, Inc.
619-550-3900
XYTRONYX, INC. COMPLETES $10 MILLION PRIVATE PLACEMENT AND
ANNOUNCES OTHER SIGNIFICANT EVENTS
ANIMAL STUDIES SUGGEST XYTRONYX PDIT-TM- TREATMENT
MAY IMPACT LONG-TERM
SURVIVAL OF BREAST CANCER PATIENTS
XYTRONYX EXTENDS THE PERIOD WITHIN
WHICH IT MAY ACQUIRE BINARY THERAPEUTICS, INC.
San Diego, California . . . March 7, 1997 -- Xytronyx, Inc. (AMEX: XYX)
announced that it completed its previously announced sale of $10 million of
Premium Preferred Units-TM- including $3.345 million raised on December 19,
1996, resulting in aggregate net proceeds of $8.7 million. The Company also
announced that a successful animal study suggests IN VIVO proof of principle for
its Photodynamic Immunotherapy-TM- (PDIT-TM-) for the treatment of metastatic
breast cancer. In addition, together with Binary Therapeutics, Inc. (BTI),
Xytronyx has agreed to extend the option period during which Xytronyx may elect
to consummate the merger with BTI, the holder of certain photodynamic therapy
technology.
Xytronyx intends to use the net proceeds for the repayment of past due accrued
liabilities of approximately $2 million, continued development of its products,
working capital and for general corporate purposes. "The consummation of this
private placement represents an important milestone for the Company" said Dr. H.
Laurence Shaw, the recently appointed CEO of Xytronyx. "Xytronyx will now have
a solid opportunity to realize its potential as the Company's products continue
to progress."
Results of the PDIT-TM- animal study were presented at the BiOS '97
International Biomedical Optics Symposium by the principal investigators, Wei
Chen of the University of Oklahoma and the Oklahoma School of Science and
Mathematics and Robert E. Nordquist of Wound Healing of Oklahoma. They cited
from their paper entitled, "Laser-tissue Photobiological Interaction: A New
Mechanism for Laser-Sensitizer-Immunoadjuvant Treatment of Metastatic Cancers"
(W.R. Chen, et al.).
PDIT-TM- treatment, proprietary to Xytronyx, consists of the co-injection of an
infrared absorbing dye (photosensitizing drug) and an immunoadjuvant directly
into a tumor followed by illumination with an infrared laser. In the cited rat
metatastic breast cancer model, PDIT-TM- treatment resulted in a significant
impact on the long-term survival rate of the rats and improved their ability to
resist a tumor rechallenge. PDIT-TM- treatment is in preparation for human
clinical
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trials and may initially target breast cancer. Xytronyx believes that the
potential of PDIT-TM- therapy to destroy metatastic tumors offers an improved
methodology for treatment of cancers such as breast, lung, and prostate,
particularly when the cancer is in the more advanced stages.
"We are excited about the potential PDIT-TM- treatment could ultimately have for
the thousands of women who are diagnosed and undergo treatment for breast cancer
each year," says David A. Okrongly, Ph.D., Vice President of Research and
Development at Xytronyx, Inc. "Our PDIT-TM- treatment which involves a laser
tissue interaction and an induced immune response may prove to be crucial to the
treatment of various cancers."
"Photophysical reactions, which are both short-term and localized in action,
have been the focus of laser-tissue interactions," noted Dr. Shaw. "Our
experimental results on the treatment of implanted mammary tumors indicate that
a systemic long-term positive response against these tumors was stimulated by
our PDIT-TM- therapy. Needless to say, we are enthusiastic about these
results." No assurance can be given that the drug will be approved by the FDA or
receive market acceptance.
Xytronyx also announced that it and BTI have agreed to extend the period during
which Xytronyx may acquire BTI from April 30, 1997 until such time as BTI has
completed human clinical trials of Boronated Porphyrin Compounds (BOPP) at an
agreed upon dose level. The option period was extended at Xytronyx's request to
enable BTI to complete clinical studies, to commence clinical trials in humans
and to demonstrate that a given dose level of BOPP in humans would not cause
certain adverse events. The extension of the option should give Xytronyx
greater opportunity to assess the preliminary data resulting from the BOPP
preclinical trials and the Phase I human clinical trials before determining
whether to acquire BTI and to evaluate the possibility of adverse events in
human patients. No assurance can be given that Xytronyx will exercise its
option. In this connection, Xytronyx has determined to defer exercise of the
option and the shareholder vote in connection therewith. Dr. Shaw commented,
"This additional time will allow Xytronyx to make a thorough evaluation of the
data. The Company remains excited about the opportunity that the BOPP technology
could offer Xytronyx, especially when developed in addition to the PDIT-TM-
technology."
The closing of $10 million was the final closing in a Private Placement of Units
at a price per Unit of $100,000, representing the maximum number of Units
offered in the Private Placement. Each Unit consisted of 500 shares of
Preferred Stock, par value $25.00 per share, stated value $200.00 per share, and
50,000 Common Stock Purchase Warrants, to accredited individuals and
institutional investors pursuant to Regulation D under the Securities Act of
1933, as amended. The 25 unit over-allotment option was not exercised. Each
share of Preferred Stock may be converted at the option of the holder into
208.3333 shares of Common Stock. The Conversion Price is subject to adjustment
on the date which is twelve months after the final closing date if the average
closing bid price of the Common Stock for the thirty consecutive trading days
immediately preceding that date is less than 130% of the Conversion Price as
adjusted, subject to a limit on the number of shares that may be issued pursuant
to such reset. Each Warrant entitles the holder to purchase one share of Common
Stock at a price of $1.00 per share and may be exercised until November 26,
2005. Paramount Capital, Inc., a New York-based investment banking firm, acted
as placement agent to Xytronyx on the private placement.
Xytronyx has been informed that it is out of compliance with certain listing
requirements of the American Stock Exchange because of its record of losses,
cash outflows, reduced shareholders'
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equity and impaired financial condition. Xytronyx is in discussions with the
Exchange regarding its condition, however, there can be no assurance the listing
will be continued.
As with any company developing novel therapeutics, Xytronyx may make certain
forward-looking statements that relate to future business and financial
performance, including the statements made in this press release. Such
statements can only be predictions and the actual events or future results may
differ from those discussed and from Xytronyx's expectations, due, among other
things, to those risks described in Xytronyx's reports on Form 10-Q for the
Quarter ended December 31, 1996 and in its Form 10-K.
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