EVANSTON, Ill., Aug. 22 /PRNewswire-FirstCall/ -- Northfield Laboratories
Inc. (Nasdaq: NFLD), a leading developer of an oxygen-carrying blood
substitute for trauma and elective surgery situations, today mailed a letter
to its shareholders in which Steven A Gould, M.D., Northfield's Chairman and
Chief Executive Officer, questioned the experience, judgment and credibility
of the director nominees proposed by dissident shareholder Robert Coates and
contrasted the superior qualifications of Northfield's Board nominees. The
following is the text of Dr. Gould's letter:
Your vote at this year's Annual Meeting of Northfield shareholders is
extremely important. As you know, your Board and management are engaged in an
aggressive effort to resolve the FDA's remaining concerns and achieve
regulatory approval for PolyHeme(TM). Yet, at this critical juncture in
Northfield's history a dissident shareholder - C. Robert Coates - has mounted
an unwarranted and disruptive campaign to seat himself and an associate, Bert
R. Williams III, on the Northfield Board of Directors. We are convinced that
the presence of Mr. Coates and Mr. Williams on the Northfield Board is not in
your best interests and could harm the value of your investment in Northfield.
To protect your investment, I urge you to sign, date and return the enclosed
BLUE proxy card today.
You should know that Mr. Coates has chosen to frame his campaign in such a
way that if he is successful, two highly qualified Board nominees, John F.
Bierbaum and Dr. Paul M. Ness, will not be elected at the Annual Meeting. It
is the Board's opinion that each of these individuals can make a valuable
contribution to Northfield and help to achieve the successful
commercialization of PolyHeme.
We believe Mr. Bierbaum and Dr. Ness bring a stronger set of skills and
knowledge to the job of protecting your interests. Consider their
qualifications:
John F. Bierbaum is Executive Vice President of Investor Relations and
Corporate Growth of PepsiAmericas, Inc., a public company with over $3 billion
in annual sales. PepsiAmericas, Inc. is Northfield's largest shareholder.
Mr. Bierbaum's extensive business experience, investment knowledge and
relationships within the financial community will add important expertise to
the Board regarding future funding.
Paul M. Ness, M.D. is Professor of Pathology, Medicine and Oncology at
Johns Hopkins University School of Medicine. He has been the director of the
School's Transfusion Medicine Division since 1979. He served on the Blood
Products Advisory Committee of the FDA from 1996 to 1998, and has also served
on many FDA advisory panels. Dr. Ness is an internationally known expert in
transfusion medicine, and has had extensive interaction with the FDA, the
National Institutes of Health and other governmental organizations.
Contrast these credentials with those of Mr. Coates and his associate:
C. Robert Coates is a private investor and President of Management
Insights, Inc., a privately held tax consulting operation. Mr. Coates has:
-- no health-care industry experience
-- no indicated capital raising experience
-- no public company executive-level experience
-- no FDA regulatory experience
In addition, Mr. Coates has little public corporate board experience. In
1999 he served as a director of Inprise Corp. but resigned after only eight
months, turning his back on that company and its shareholders.
In our opinion, Mr. Coates' lack of experience and judgment is clearly
evident in his recent behavior. His frustration with the decline in
Northfield's share price is shared by all of us. However, we do not believe
that his recent spate of press releases -- which implicitly criticize the FDA
while touting PolyHeme -- are helpful or appropriate at this critical stage of
our discussions with that agency. Were he to engage in such communications as
a board member, we fear it could severely compromise our ability to secure FDA
approval for PolyHeme.
We also believe that his public statements that Northfield could sell
shares at $20 under current market conditions are both irresponsible and
misleading. When I asked Mr. Coates to provide details about this
"transaction" to support his claims, he refused to do so. In all events, we
believe it is both unprofessional and unwise to attempt to negotiate any such
purported transaction in the media.
Bert Williams is, in our opinion, similarly lacking in the skills and
experience that would recommend him to the Northfield Board. He has spent his
entire career working for small private medical device companies controlled by
his family. His indicated experience in the medical device field is far
removed from the complexities of a breakthrough biological product such as
PolyHeme. In addition, Mr. Williams lacks any public company executive or
board experience.
Furthermore, we are seriously concerned that the background information
Mr. Williams supplied Northfield in connection with his nomination was
misleadingly incomplete. He failed to disclose that he was both an officer
and director of Rupp & Bowman Company when it filed for bankruptcy in 1994.
We find this lack of disclosure disturbing.
Your company's independent nominating committee carefully considered Mr.
Coates and Mr. Williams as director nominees -- and found them seriously
lacking in the qualifications that Northfield shareholders deserve. The Board
unanimously determined that the Northfield director nominees are far better
equipped to guide your company through this critical period. (A brief
biographical description of our other director nominees appears on the
following page.)
In recent months, we have been engaged in what we believe is a productive
dialogue with the FDA. Don't allow that process to be jeopardized. I urge
you to act today to protect the value of your investment by signing, dating
and returning the BLUE proxy card today.
If you have any questions or comments voting your shares or the issues
facing our company, please call Innisfree M&A Incorporated, who is assisting
us, toll-free at 1-888-750-5834.
Thank you for your continued support.
REMEMBER-ONLY YOUR LATEST DATED PROXY COUNTS!
If you have already voted a White proxy card in error, you have every legal
right to change your vote by signing and returning a later-dated BLUE proxy
card today.
To ensure that your vote is counted for Northfield's director nominees, do NOT
sign any White proxy card sent to you by C. Robert Coates, even to withhold
your support for the Coates nominees. Simply discard the White card.
If you have any questions or need assistance in voting your shares, please
call:
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, New York 10022
Call Toll-Free: (888) 750-5834
Banks and Brokers call collect (212) 750-5833
CURRENT NORTHFIELD DIRECTORS:
Bruce S. Chelberg is a former Chairman and Chief Executive Officer of
PepsiAmericas, Inc. Mr. Chelberg is a seasoned veteran in corporate America,
and provides a level of experience and sophistication that is useful to a
development stage company like Northfield.
Steven A. Gould, M.D. is the Chairman and Chief Executive Officer of
Northfield, a founding member of the Northfield scientific team, and Professor
of Surgery at the University of Illinois College of Medicine. Dr. Gould led
the presentations to institutional investors that resulted in the highly
successful public offerings in 1994 and 1995 that raised more than
$70 million. He has been involved in development of national transfusion
policy through his participation in the activities of the National Heart Lung
Blood Institute, the National Blood Resource Education Panel, the Department
of Defense, the American Association of Blood Banks, the American College of
Surgeons and The American Red Cross.
Gerald S. Moss, M.D. is Dean of the University of Illinois College of
Medicine and a founding member of the Northfield scientific team. Dr. Moss
has been involved in development of national transfusion policy through his
participation in the activities of the National Heart Lung Blood Institute,
the National Blood Resource Education Panel, the Department of the Defense,
the American Association of Blood Banks, the American College of Surgeons and
The American Red Cross.
Jack Olshansky has had a long career in the health care industry. He is a
former President of McGaw Laboratories, a division of American Hospital Supply
Company, and was a founding General Partner of Montgomery Medical Ventures.
His experience on both the operating side of health care and the funding of
multiple development stage companies provides an important perspective to both
the Board and management.
David A. Savner is currently the Senior Vice President and General Counsel
of General Dynamics Corporation. Mr. Savner was previously Senior Partner in
the law firm of Jenner & Block in Chicago. Mr. Savner is actively involved
in mergers and acquisitions in his present role, as he was in his former
capacity. At General Dynamics, Mr. Savner has extensive interaction with many
governmental agencies, including the Department of Defense. This experience
and his Washington relationships provide Northfield with an important
resource.
Statements in this release that are not strictly historical are "forward-
looking" statements that are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. Forward-looking
statements involve known and unknown risks, which may cause the company's
actual results in the future to differ materially from expected results. These
risks include, among others: competition from other blood substitute products;
the company's ability to obtain regulatory approval to market PolyHeme
commercially; the company's and/or its representative's ability to
successfully market and sell PolyHeme; the company's ability to manufacture
PolyHeme in sufficient quantities; the company's ability to obtain an adequate
supply of raw materials; the company's ability to maintain intellectual
property protection for its proprietary product and to defend its existing
intellectual property rights from challenges by third parties; the
availability of capital to finance planned growth; and the extent to which the
hospitals and physicians using PolyHeme are able to obtain third-party
reimbursement, as described in the company's filings with the Securities and
Exchange Commission.
Visit the Northfield website at: http://www.northfieldlabs.com .
SOURCE Northfield Laboratories Inc.
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Related links:
http://www.northfieldlabs.com
CONTACT:
Steven A. Gould, M.D., Chief Executive
Officer of Northfield Laboratories, +1-847-864-3500, or
Investors, Lisa Fortuna, +1-312-640-6779, or Media, Cindy Martin,
+1-312-640-6741, both of FRB Weber Shandwick
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