FOR IMMEDIATE RELEASE
CytRx Corporation Zynaxis, Inc.
154 Technology Parkway 371 Phoenixville Pike
Norcross, Georgia 30092 Malvern, Pennsylvania 19355
Contact: James M. Yahres Contact: Martyn D. Greenacre
(770) 368-9500 x102 (610) 889-2200
email: yahres@cytrx.com
CYTRX TO MERGE ZYNAXIS WITH VAXCEL SUBSIDIARY TO CREATE
PUBLIC COMPANY WITH MULTIPLE VACCINE DELIVERY TECHNOLOGIES
Atlanta, Georgia and Malvern, Pennsylvania, December 6, 1996 -- CytRx
Corporation [NASDAQ:CYTR] and Zynaxis, Inc. [NASDAQ:ZNXS] today announced they
have agreed, subject to Zynaxis shareholder approval, to merge Zynaxis with
CytRx's Vaxcel, Inc. subsidiary to create a new public company with multiple
novel vaccine delivery opportunities. Paul J. Wilson, Vaxcel's current President
and CEO, will head the "new" Vaxcel which will be headquartered in Atlanta.
Before closing, which is expected by the end of the first quarter of 1997, CytRx
will provide secured interim financing of up to $2 million to Zynaxis, subject
to certain conditions. After closing, Vaxcel shares are expected to publicly
trade on the NASDAQ SmallCap market. CytRx will own approximately 87% of
Vaxcel's outstanding shares.
New Company will Benefit both CytRx and Zynaxis
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"This merger is significant for both Zynaxis and Vaxcel," commented Jack J.
Luchese, CytRx President and Chief Executive Officer. "It is a win-win
situation, as we are establishing a company with greater capabilities than
either company alone. Furthermore, the Vaxcel/Zynaxis combination is a
successful example of CytRx's strategy to create wholly-owned subsidiaries
around distinct technology platforms, develop value in them, and then take each
public. We believe this publicly traded company will provide equity market
recognition of the value in CytRx subsidiaries."
"This is also an ideal opportunity for Zynaxis," added Martyn Greenacre,
Chairman and CEO of Zynaxis. "Vaxcel specializes in human vaccine delivery
technologies. I am confident this will maximize the potential of our
complementary technologies."
Technologies Address Injectable, Oral, and Mucosal Delivery of Vaccines
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"The addition of Zynaxis technologies will round out Vaxcel's portfolio of
proprietary vaccine delivery technologies to provide multiple opportunities for
success," noted Paul Wilson. "Our Optivax(R) adjuvant is primarily focused on
enhancing the effectiveness of injectable vaccines, while the Zynaxis
technologies are primarily targeted on improving oral and mucosal vaccine
delivery. Our strategy will be to license these three technologies on a
vaccine-by-vaccine basis to companies engaged in vaccine research and
development."
Preclinical studies using Optivax with a variety of vaccines have demonstrated
that Optivax represents a more effective way of administering injectable
vaccines. A Phase I human clinical trial was initiated in January 1996 to
evaluate the human safety and adjuvant activity of Optivax administered in
combination with an immunotherapeutic vaccine for patients with metastatic
cancer. Results are expected in early 1997.
Zynaxis' PLG microspheres are a proprietary microencapsulation technology
designed to allow for delivery of oral vaccines. In preclinical studies, PLG
encapsulated vaccines have reproducibly induced systemic and mucosal antibody
responses following oral administration. ALK, a world leader in allergy
therapeutics, has licensed the PLG technology for oral delivery of allergy
vaccines. They are currently conducting a Phase II human clinical trial in
Europe.
Zynaxis' mucoadhesive polymer offers potential for oral delivery as vaccines can
be formulated with these compounds and delivered to mucosal sites. A recent
preclinical study showed the polymer induced a stronger mucosal immune response
following a single oral dose of an influenza virus vaccine than the injected
vaccine.
As part of the agreement, Zynaxis is seeking a buyer for its Cauldron Process
Chemistry division with closing expected in 1997. Cauldron, located in Malvern,
Pennsylvania, provides process research and development and production of bulk
pharmaceutical chemicals under Good Manufacturing Practices (cGMP) conditions.
QED Technologies of Malvern, Pa. provided advisory services to CytRx in this
transaction.
CytRx Corporation's business strategy is to build shareholder value through the
development and commercialization of high value human therapeutic products,
while capitalizing on other bio-pharmaceutical opportunities through its unique
subsidiary structure.
Zynaxis' technology portfolio includes proprietary oral and mucosal delivery
systems to enhance the performance of vaccines.
Certain statements, expectations and assumptions contained in this release are
forward-looking and are subject to a number of risks and uncertainties.
Although CytRx and Zynaxis have used their best efforts to be accurate in making
these forward-looking statements, it is possible that the assumptions made by
management may not materialize. In addition, other important factors which
could materially affect future performance include: economic conditions in the
vaccine industries; outcomes of current and future clinical trials; successful
licensing of the technologies to vaccine development companies; reviews by the
SEC, FDA and other regulatory agencies; and the risk factors set forth from time
to time in CytRx and Zynaxis SEC filings, copies of which are available upon
request from each company.
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