Biosurface Technology

Feb 20, 2014

.." The Free Library. 1994 Business Wire 03 Jun. 2015 http://www.thefreelibrary.com/Genzyme%2c+BioSurface+shareholders+approve+acquisition.-a015967732 Chicago style: The Free Library. S.v. Genzyme, BioSurface shareholders approve acquisition.." Retrieved Jun 03 2015 from http://www.thefreelibrary.com/Genzyme%2c+BioSurface+shareholders+approve+acquisition.-a015967732 APA style: Genzyme, BioSurface shareholders approve acquisition.. (n.d.) >The Free Library. (2014). Retrieved Jun 03 2015 from http://www.thefreelibrary.com/Genzyme%2c+BioSurface+shareholders+approve+acquisition.-a015967732 CAMBRIDGE, Mass.--(BUSINESS WIRE)--Dec. 12, 1994--Genzyme Corp.(NASDAQ:GENZ) and BioSurface Technology Inc. (NASDAQ:BSRF) todayannounced that the shareholders of BioSurface have given final approvalfor Genzyme to acquire BioSurface and merge it into the new GenzymeTissue Repair Division. As part of the transaction, Genzyme's shareholders alsoapproved the issuance of a new class of common stock (NASDAQ:GENZL) thatwill represent the business of the Tissue Repair Division. The remainder of Genzyme's businesses will constitute thecompany's General Division and will be represented by the class ofGenzyme common stock that will be called General Division Common Stockand will continue to trade under the symbol GENZ. The acquisition will be effective on Dec. 16. BioSurface willcease trading on Dec. 15. Trading in Genzyme Tissue Repair stock willbegin on Dec. 16 on NASDAQ. In a tax free exchange, BioSurfaceshareholders will receive a total of 5 million shares of Tissue Repairstock, or approximately .571 shares of GENZL for each BioSurface share.3.3 million shares will be distributed on Dec. 23 to Genzyme Generalshareholders of record as of Dec. 16 in a tax free distribution ofapproximately .135 share of GENZL for each share of GENZ. 1.7 millionshares of Tissue Repair will be reserved for stock option, warrant andconvertible bond holders, upon exercise and conversion. Genzyme Tissue Repair will have one product on the market for twoindications, as well as one of the largest and most advanced researchand development pipelines in the emerging field of biologically activeproducts for tissue repair. These products are intended to treatcartilage damage, burns, chronic skin ulcers, and multiple sclerosis.An estimated $13 billion are spent annually in the United States oncurrent standard care for such disorders. Fully Integrated Business The Tissue Repair Division is a fully integrated business withannual sales of $6 million from the Epicel(TM) skin graft product. Thedivision will shortly begin marketing an autologous cultured cartilagecell product. As reported in the October 6 issue of the New EnglandJournal of Medicine, this product has been shown to regenerate damagedknee cartilage. With current therapies, such injuries lead toosteoarthritis and often result in the need for total knee replacement.An estimated 250,000 patients who undergo knee surgeries annually in theUnited States could benefit from this product. In addition to cultured cartilage cells and Epicel, the divisionhas four other products in clinical development for seven indications.Among these are Vianain(R) debriding agent, designed to removenon-viable tissue from burns and skin ulcers; TGF-B2, a recombinantgrowth factor intended to heal chronic skin ulcers and treat multiplesclerosis; and Acticel(TM), a biologically active wound dressing forburns and ulcer treatment. The Tissue Repair Division is developing a comprehensive productportfolio based upon the broadest range of advanced technologies of anycompany in the tissue repair field. "We believe this comprehensiveapproach is essential to solve the medical problems in tissue repair.It also has the advantages of increasing the probability of clinicalsuccess and of portfolio diversification," said Genzyme Senior VicePresident Gregory D. Phelps, who will be president of the Tissue RepairDivision. To fund its business, the Tissue Repair Division has available$53 million -- approximately $23 million initially and a commitment fromGenzyme's General Division over the next three and a half years toallocate $30 million in capital contributions at $10 per share. Tracking Stock Classes of stock that track the performance of differentbusinesses of a company are know as "tracking" stocks. Themain advantage of tracking stock to investors is that it affords them anopportunity to invest selectively in different businesses whose valuesare based upon different criteria. It also provides an opportunity forthe company to independently finance the growth of the businesses. This structure also enables the Tissue Repair Division toleverage the General Division's considerable infrastructure inclinical research, regulatory affairs, manufacturing, and sales andmarketing. The use of tracking stock is new to the biotechnology industry;however, it has been employed successfully in other industries for anumber of years. Also known as "letter" stock, it was firstused in 1984 in General Motors' acquisition of Electronic DataSystems. A year later GM used tracking stock to acquire HughesAircraft. In the 1990s USX Corp. issued tracking stocks for its steel,oil, and natural gas units, and the Pittston Co. did the same for itsmining and service divisions. CONTACT: Genzyme Corp., Cambridge Kathleen Rinehart, 617-252-7570 or Susan Cogswell, 617/252-7581 COPYRIGHT 1994 Business Wire No portion of this article can be reproduced without the express written permission from the copyright holder. Copyright 1994, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company. Reader Opinion