By Brady Huggett

Ophidian Pharmaceuticals Inc. will mail stockholders their share of the proceeds from its sales of assets to Promega Corp., and then will execute a reverse merger with Hemoxymed Inc.

The company sold its assets to Promega on Nov. 16, and $961,000 in proceeds will be given to shareholders, with each stockholder receiving 83 cents per share of Ophidian stock. Ophidian, of Madison, Wis., will retain some of the total proceeds to cover certain operating expenses, taxes, other costs and remaining liabilities. Any leftover money will again be mailed to shareholders. It has about 1.2 million shares outstanding.

Ophidian has been reeling since 1999, when Eli Lilly and Co., of Indianapolis, gave back rights to OPHD001, an avian polyclonal antibody for the treatment of Clostridium difficile-associated disease (CDAD), and ended a potential $12.4 million deal. The compound was in Phase I trials when Ophidian and its 31 employees regained the rights, and the company moved ahead with plans for Phase II trials, seeking to enroll 160 diagnosed CDAD patients. (See BioWorld Today, June 25, 1999.)

Enrollment for the trial of OPHD001 proved difficult, though, and without Phase II results, the company could not attract significant capital, Douglas Stafford, Ophidian¿s president and CEO, said at the time. The trial was suspended. Ophidian, down to 24 employees, suspended all laboratory, product development and related company operations, and said it would focus on marketing its intellectual property and manufacturing assets, seeking a buyer for its assets and also a merger partner. Following this, the company was further winnowed to six employees. (See BioWorld Today, May 30, 2000.)

On Sept.1, Ophidian executed the sale agreement with Promega to sell substantially all of its fixed assets for about $1.2 million in cash, a $250,000 promissory note and the assumption of long-term debt of $2 million.

That left finding a merger partner.

It found one in privately held Hemoxymed, a Charlottesville, Va., company focused on developing a process to increase tissue oxygenation for the treatment of a variety of diseases. That will continue to be the focus when the companies complete their merger. Ophidian will acquire all of Hemoxymed¿s outstanding stock from Hemoxymed shareholders in exchange for Ophidian¿s issuance of 19 million new, unregistered shares. Following the transaction, Ophidian will have 20.2 million shares outstanding and Hemoxymed shareholders will hold about 94 percent of them, with Ophidian stockholders holding 6 percent.

Sue Maynard, secretary and director of administrative operations at Ophidian, verified that Hemoxymed will become a wholly owned subsidiary, will merge into the subsidiary Ophidian Holdings Inc. and then be born as a new company called HEMOXymed Inc. The closing of the transaction is subject to stockholder approval by both companies.

Ophidian¿s stock (OTCBB:OPHD) dropped about 1 cent Tuesday to close at $1.18.

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