INEX to purchase convertibles for $36.5 million

By Lisa Kerner

Charlotte, N.C., June 20 - INEX Pharmaceuticals Corp. said it signed a definitive note purchase and settlement agreement with all of the holders of some of its convertible promissory notes for upfront and potential future consideration totaling $36.5 million, the principal and interest outstanding at March 31.

Owned by institutional investors, including Stark Trading and Shepherd Investments Ltd., The notes were issued by a wholly-owned subsidiary of INEX and guaranteed by INEX, according to a company news release.

The upfront payment consists of a $2.5 million cash payment and 1.1 million shares of Hana Biosciences, Inc., which closed at $8.60, making the total value of the upfront payment $12.1 million.

INEX said the remaining $24.4 million payment is contingent on future milestone and royalty payments from Hana.

Should it reorganize, INEX would transfer its pharmaceutical assets to its subsidiary, Tekmira

Pharmaceuticals Corp.

"Today's debt settlement announcement is a key turning point for INEX and its shareholders," president and chief executive officer Timothy M. Ruane said in the release.

"We are well positioned to advance our pipeline of anticancer products both internally and in collaboration with our corporate partners."

INEX is in line to receive an additional $30.5 million from Hana if development and regulatory milestones are achieved.

The company had cash at March 31 of $8.9 million and expects to end the second quarter with approximately $6.2 million.

INEX is a biopharmaceutical company based in Vancouver, B.C.

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