News

London, 23 January 2006

The AIM admission will be effected through the proposed reverse takeover of AIM-listed General Industries plc by ImmuPharma. Under the proposal General Industries has undertaken to make a share exchange offer for ImmuPharma’s entire equity capital which, on successful completion, will result in the existing shareholders of ImmuPharma taking a controlling interest in General Industries.

ImmuPharma is currently developing drug candidates for three different medical conditions, each of which would represent a significant breakthrough in its field. The furthest advanced drug candidate targets Lupus, a disease for which there is currently no cure or specific treatment. By 2010 there will be an estimated 1.4 million patients diagnosed with Lupus in the seven key markets. The other two address moderate to severe pain (such as that experienced by cancer sufferers and post-operative patients), and MRSA and similar severe hospital-acquired resistant infections.

All three have significant sales potential as well as low marketing costs and a relatively low risk of development failure. One or more have the potential to be fast-tracked by the US Food and Drug Administration so they could be available to patients in 2010.

Dimitri Dimitriou, ImmuPharma chief executive officer, says: "Over the last decade the big companies in the pharmaceutical industry have become increasingly interested in licensing novel blockbuster drugs from small research and development-based companies. With ImmuPharma’s innovative portfolio of drug candidates in niche therapeutic areas, we are well placed to meet this need and attract major corporate deals."

Key to the potential success of ImmuPharma is its unique collaborative agreement with Centre National de la Recherche Scientifique, France’s scientific research institution. This agreement grants ImmuPharma worldwide exclusive rights to exploit certain key discoveries.

On successful completion of the acquisition and an accompanying placing of around 4.8 million shares with institutional and private investors, there will be approximately 67.8 million shares in issue. This means that, at the placing price of 42.5p a share, the company would be capitalised at some £28.8 million.

The cash resources of GI and the proceeds of the Placing, together with certain grants, are expected to fund the IPP – 201101 (Lupus) phase I trial and a phase II study, which is expected to give an early indication of efficacy and to finance further development of the other drug candidates.

KBC Peel Hunt Ltd are brokers to the acquisition and placing and ImmuPharma’s nominated advisers are Dawnay, Day Corporate Finance Ltd.

Following completion of the transaction the existing directors of General Industries will resign and the current directors of ImmuPharma will be elected in their place. The new board would then seek a change of name from General Industries to ImmuPharma plc.

ImmuPharma was formed and is led by a management team with significant international pharma industry and business experience. This includes executive chairman Richard Warr, with 20 years of investment banking experience; chief executive officer Dimitri Dimitriou, a former senior director at GlaxoSmithKline with 20 years in the pharma sector; president and chief scientific officer Dr Robert Zimmer, formerly head of research and development at SkyePharma with 20 years pharma industry experience; and chief financial officer Paddy Walker-Taylor, former finance director of Woolworths.

In addition to its three leading drug candidates, ImmuPharma has a drug development pipeline using its rights to a virtual chemical library of hundreds of thousands of molecules as well as an innovative technology for converting peptides to drug candidates.

Dr Robert Zimmer, president and chief scientific officer, commented further: "The new proprietary technologies either developed in house or coming from the CNRS collaboration allow new peptides and peptide mimics to be considered as very promising drug candidates. Development times are faster and the risk is lower, offering ImmuPharma an exceptionally strong product pipeline."

ImmuPharma has the option to commercialise its assets itself or to license them to other pharmaceutical companies at an earlier stage.

Richard Warr, ImmuPharma executive chairman, says: "We believe ImmuPharma represents an exciting opportunity for investors to take part in one of the most promising and revolutionary biotech companies to come to the market to date."

This is a long-term treatment for Lupus, a chronic, life-threatening autoimmune disease where the immune system attacks healthy cells. There is currently no cure and existing medications only treat the symptoms whereas ImmuPharma’s drug candidate has the potential to produce remission of the disease in a substantial proportion of patients.

Lupus currently has an estimated one million diagnosed sufferers in the developed world – a number which is expected to rise to 1,400,000 in seven key markets by 2010.

According to a recent Datamonitor report, the currently unique ImmuPharma drug candidate, IPP-201101, has an "achievable" peak market share of 50 per cent. The report also suggests that the drug could sell at a similar cost to interferon, the multiple sclerosis treatment - around $10,000 a year per patient.

On the basis of these forecasts, the value of ImmuPharma’s Lupus drug is estimated to be "substantial" on its emergence from the approval process. The directors believe that, assuming it is launched in 2010, IPP-201101 could generate peak annual sales of $4 billion or more in 2016.

ImmuPharma is developing a non-addictive compound for relieving moderate to severe pain, such as experienced by cancer sufferers and post-surgical patients. Most existing treatments are opioid-based and tend to have serious side effects. ImmuPharma’s new treatment is based on met-enkephalin, the body’s internal analgesic. IPP-102199 is being developed to be easy to use with major advantages over morphine such as longer duration and reduced side effects. The market for chronic opioids in the US currently exceeds $3.5 billion and is growing by more than 10 to 20 per cent a year.

This is a novel antibiotic to counter the effects of MRSA and other severe hospital-acquired, resistant infections which affect some two million people in the US, according to the US Centers for Disease Control and Prevention. ImmuPharma’s drug candidate uniquely uses an electrical charge rather than biochemical methods against MRSA and other bacterial strains. It is hoped this novel approach will reduce their potential to become resistant.

Richard Warr, MA, executive chairman, (age 44) has 20 years experience in investment banking and the capital markets. He was previously a director of ABN Amro; director and head of European sales and marketing at Credit Lyonnais; executive director at Dresdner Kleinwort Benson Securities Ltd; and head of European equity distribution at Swiss Bank Corporation. He has extensive experience in corporate and governmental equity capital market transactions.

Dimitri F Dimitriou, MSc, chief executive officer, (age 44) has 20 years experience in the pharmaceutical and biotech industry. He was senior director, worldwide business development, at GlaxoSmithKline, where his responsibilities included licensing deals, alliances and collaborations on a worldwide basis.

Dr Robert Zimmer, MD, PhD, chief science officer, (age 58) began his career in 1985 with Roche in Basle, where he was responsible for numerous Phase I studies. In 1990 he joined JAGO in Basle and, on its acquisition by SkyePharma, became director and head of research and development at SkyePharma. His expertise includes managerial experience in multifunctional research and development and the assessment of technologies with multi-national pharmaceutical companies.

Paddy Walker-Taylor, FCA, MCT chief financial officer, (age 59) was previously finance director of Sir Robert McAlpine Ltd. He was involved in the AIM float of ISG Group, in which McAlpine had a minority shareholding. Previously he had held a number of key financial positions including finance director of Woolworths plc and treasurer of Marks & Spencer.

Douglas Paterson, MA, FCA, senior non-executive director, (age 62) has been a chartered accountant for 37 years and was a senior audit partner at Coopers & Lybrand (now PricewaterhouseCoopers) for 22 years. He currently holds a number of non-executive directorships, including Close Brothers Group plc and Goldman Sachs International Bank.

Anthony Johnson, B Pharm (Hons), MSc, MRPharmS, non-executive director, (age 62) has over 30 years experience in the pharmaceutical industry, focused on the scientific aspects of deal making, support during competitive analysis, technical due diligence and input in development strategy. He was formerly senior director of scientific licensing at SmithKline Beecham (now GlaxoSmithKline).

ImmuPharma has important collaboration arrangements with Centre National de la Recherche Scientifique, France’s scientific research institution, including a research collaboration agreement relating to the therapeutic use of peptides and peptide derivatives. ImmuPharma has been granted the worldwide exclusive rights to exploit all discoveries made under this agreement. ImmuPharma will co-own the relevant intellectual property with CNRS which will share in the revenue generated by ImmuPharma from exploiting CNRS’s licensed and co-owned rights.