PREVENTX(R)
FOR IMMEDIATE RELEASE INVESTOR CONTACT:
Steve Phillips
Edward Howard & Co.
(216) 781-2400
MEDIA CONTACT:
Diana Lueptow or Steve Phillips
Edward Howard & Co.
(216) 781-2400
EMPYREAN BIOSCIENCE AND INTERNATIONAL BIOSCIENCE
FORM JOINT VENTURE
COMPANIES SETTLE ALL OUTSTANDING LEGAL ISSUES
CLEVELAND, August 10, 2000 - Empyrean Bioscience Inc. (OTCBB: EMDG) and
International Bioscience Corp. (IBC) today announced the formation of a joint
venture, to manufacture, market, sell and distribute innovative personal care
products throughout the world. The products will be based upon proprietary
formulations licensed from IBC designed to prevent the spread of infectious
diseases. The creation of this 50/50 joint venture is part of an overall
settlement wherein the two companies have resolved all outstanding legal issues
between them.
The joint venture will operate under a business plan developed jointly by
Empyrean and IBC. A board of directors representing both companies will provide
oversight, and a team comprising marketing personnel from Empyrean and
scientific personnel from IBC will coordinate new product development.
Under the agreement, Empyrean will retain full and exclusive rights to
sell, market and distribute a wide range of products in the United States based
upon IBC formulations. Empyrean will license all Preventx(R) trademarks and
logos to IBC and the joint venture. Empyrean will pay IBC a five percent royalty
on net sales within the United States.
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IBC will be granted full and exclusive rights to sell, market and
distribute all products using IBC formulations in Brazil. IBC will retain the
right, title and interest in all product formulations and will license the
GEDA(R) trademarks to both Empyrean and the joint venture. IBC will pay Empyrean
a five percent royalty on net sales within Brazil.
In exchange for the issuance of 5,000,000 shares of Empyrean common stock,
IBC will forgo the payment by Empyrean of any further minimum guaranteed
royalties, which total $13,657,000 for the seven years remaining in the initial
term of the existing license agreement and $46,311,000 in the first ten-year
renewal term. In addition, Empyrean will grant IBC an option to purchase another
2,226,000 shares of Empyrean common stock, having a strike price of $0.83 a
share and vesting based upon IBC's completion of critical strategic initiatives.
As part of the agreement, IBC agreed to fund clinical trials for the
microbicidal contraceptive gel, with a commitment to invest up to $10 million.
The trials will be designed to fulfill all requirements for United States Food
and Drug Administration approval of the product. The trials will test the
efficacy and safety of the microbicidal contraceptive gel against various
sexually transmitted diseases including HIV.
For all markets other than the United States and Brazil, Empyrean and IBC
will operate the joint venture to manufacture, market, sell and distribute
products based on the IBC formulations by granting distribution rights to
independent, third-party distributors, which will be qualified under
requirements developed in the joint venture.
"Maximizing the strengths of both companies and truly aligning our
interests for the first time, the joint venture will enable us to focus our
full, collective attention on realizing the potential that our products offer,"
said Richard C. Adamany, Empyrean's president and chief executive officer. "By
combining forces, we can now aggressively bring products to market that will not
only help our shareholders achieve maximum value, but can also lead the
worldwide battle against infectious diseases. The joint venture is the perfect
marriage of Empyrean's sales, marketing and distribution capabilities with IBC's
world-class research, development and regulatory expertise."
"We are particularly excited about the potential of our microbicidal
contraceptive gel," continued Adamany, "which we believe will be shown to be
effective against HIV and a host of other sexually transmitted diseases, and
thereby become the leading product in an estimated $2 billion global market."
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"The settlement allows IBC and Empyrean to work together with regulatory
agencies toward expediting the approval of our products," said IBC's President
and Chief Executive Officer, Sara Gomez de Ferro. "This cooperation is
especially critical to obtain approval for our microbicidal contraceptive gel,
which will begin Phase III trials in Brazil for gonorrhea, chlamydia, syphilis,
herpes and Trichomonas within the next 120 days, as these trials will be
conducted in accordance with USFDA guidelines. IBC has waived its guaranteed
minimum royalty payments in exchange for the shares of Empyrean and the
opportunity to work together to execute our joint business plan, which we
anticipate will be far more profitable to our company than the royalty
guarantees."
"The global need for an effective microbicide to prevent the transmission
of sexual diseases, including enveloped viruses such as HIV, has never been
greater," said Dr. David Thornburgh, IBC's chairman. "We are anxious to begin
large clinical trials which we hope will confirm the favorable results that were
obtained in several pilot studies. By resolving the outstanding issues between
our companies, we can now direct our attention to this important task."
All pending legal actions between Empyrean and IBC will be dismissed. As
part of the settlement, IBC agreed to fully indemnify Empyrean for any damages
Empyrean may incur resulting from the legal actions involving Optima Holding Co.
Empyrean and IBC will also join forces to resolve the claims against Optima.
Empyrean Bioscience is a consumer products company specializing in the
marketing, sale and distribution of innovative personal care products designed
to prevent the spread of infectious diseases. The company markets its products
under the Preventx(R) and Coleman(R) brand names. For more information, see
www.empyreanbio.com.
International Bioscience Corporation is a company with revolutionary
breakthrough products that it believes will change the medical world and
people's lives everywhere. The company is the owner of the formulation for GEDA
Plus, a microbicidal contraceptive gel and Peloderm, a healing, pain reducing
wound dressing. For more information, see www.intlbio.net.
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THIS PRESS RELEASE INCLUDES STATEMENTS THAT MAY CONSTITUTE FORWARD-LOOKING
STATEMENTS MADE PURSUANT TO THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995. THE STATEMENTS REGARDING "DESIGNED TO PREVENT THE
SPREAD OF INFECTIOUS DISEASES," "WILL PROVIDE OVERSIGHT," "WILL COORDINATE NEW
PRODUCT DEVELOPMENT," "GRANTING DISTRIBUTION RIGHTS TO INDEPENDENT, THIRD-PARTY
DISTRIBUTORS," "FOCUS OUR FULL, COLLECTIVE ATTENTION ON REALIZING THE POTENTIAL
THAT OUR PRODUCTS OFFER," "AGGRESSIVELY BRING PRODUCTS TO MARKET," "HELP OUR
SHAREHOLDERS ACHIEVE MAXIMUM VALUE," "LEAD THE WORLDWIDE BATTLE AGAINST
INFECTIOUS DISEASES," "WHICH WE BELIEVE WILL BE SHOWN TO BE EFFECTIVE," "BECOME
THE LEADING PRODUCT," "EXPEDITING THE APPROVAL OF OUR PRODUCTS," "WHICH WILL
BEGIN PHASE III TRIALS," "WHICH WE ANTICIPATE WILL BE FAR MORE PROFITABLE,"
"BEGIN LARGE CLINICAL TRIALS WHICH WE HOPE WILL CONFIRM THE FAVORABLE RESULTS,"
"EMPYREAN AND IBC WILL ALSO JOIN FORCES TO RESOLVE" AND "WILL CHANGE THE MEDICAL
WORLD AND PEOPLE'S LIVES EVERYWHERE" ARE FORWARD-LOOKING IN NATURE. THESE
STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL
RESULTS TO DIFFER MATERIALLY FROM THE FORWARD-LOOKING STATEMENTS. SUCH RISKS
INCLUDE, AMONG OTHER FACTORS, THE SUCCESS OF THE CLINICAL TRIALS, THE JOINT
VENTURE'S ABILITY TO OBTAIN GOVERNMENT APPROVAL, THE ACCEPTABILITY OF THE
POTENTIAL PRODUCT IN THE MARKETPLACE, AND THE ABILITY TO OBTAIN SUFFICIENT
CAPITAL TO FUND OPERATIONS. ADDITIONAL FACTORS, WHICH COULD CAUSE ACTUAL RESULTS
TO DIFFER MATERIALLY FROM EXPECTATIONS IN THE FORWARD-LOOKING STATEMENTS, ARE
SET FORTH IN THE COMPANY'S FORM 10K-SB ANNUAL REPORT FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.
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