Company Brings Suit to Enforce Right to Redeem 24% of Series A Preferred Stock
PORTLAND, Ore., Oct. 1 /PRNewswire/ --
Bioject Medical Technologies Inc. (Nasdaq: BJCT), a leading developer of
needle-free drug delivery systems, today announced that it provided notice to
redeem 164,950 shares of its Series A Convertible Preferred Stock held by
Elan Pharmaceutical Investments, Ltd. for approximately $3.45 million. All
shares of the Series A Preferred Stock currently outstanding are held by Elan
and the shares to be redeemed represent approximately 24% of the outstanding
shares.
The Series A Preferred Stock accrues dividends at an annual rate of
9 percent and the preferred stock and all accrued dividends automatically
convert to Bioject common stock in 2004 at a conversion price of $7.50 a
share. Accordingly, the practical effect of this redemption is the repurchase
by Bioject of 460,000 common equivalent shares for $7.50 a share.
"This opportunity to redeem a portion of the Series A Convertible
Preferred shares comes at a good time for the company," said Jim O'Shea,
chairman, president and chief executive officer of Bioject. "We currently have
the cash resources to fund this redemption; however, to conserve cash, our
plan is to issue an equivalent number of common shares in the open market at a
premium to the effective $7.50 redemption price."
Elan responded to Bioject's notice by disputing Bioject's right to redeem
this stock at this time and on these terms. To enforce its redemption rights,
Bioject has filed a lawsuit in U.S. District Court in Oregon seeking an
injunction and declaratory judgment to compel Elan to abide by the redemption
provisions in Bioject's articles of incorporation.
Regarding the dispute with Elan, O'Shea added: "Our right to redeem these
shares was specifically negotiated with Elan. The redemption provides
substantial value to our shareholders including an increase in liquidity, a
decrease in the concentration of shares held by Elan, and a reduction in the
annual dividend charge, which, last year was approximately $1.2 million.
Accordingly, we intend to prosecute this lawsuit vigorously to enforce our
rights."
Bioject Medical Technologies Inc., based in Portland, Oregon, is an
innovative developer and manufacturer of needle-free drug delivery systems.
Needle-free injection works by forcing medication at high speed through a tiny
orifice held against the skin. This creates a fine stream of high-pressure
fluid penetrating the skin and depositing medication in the tissue beneath.
The company is focused on developing mutually beneficial agreements with
leading pharmaceutical and biotechnology companies. Bioject's partners now
include Amgen and Serono.
This press release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995, including statements
concerning products being developed by the Company, progress in clinical
evaluations of the Company's products, possible enabling characteristics of
the Company's products, collaborations with major pharmaceutical and
biotechnology companies, current research and product development
collaborations with Amgen and Serono, and clinical research collaborators.
Such forward-looking statements involve known and unknown risks, uncertainties
and other factors which may cause the actual results, performance or
achievements of the company, or industry results, to be materially different
from any future results, performance, or achievements expressed or implied by
such forward-looking statements. Readers of this press release are referred to
the company's filings with the Securities and Exchange Commission, including
the company's Annual Report on Form 10-K and Form 10-Q for further discussions
of factors which could affect future results. Forward-looking statements are
based on the estimates and opinions of management on the date the statements
are made. The company assumes no obligation to update forward-looking
statements if conditions or management's estimates or opinions should change.
More information can be found at Bioject's home page at:
http://www.bioject.com .
SOURCE Bioject Medical Technologies Inc.
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Related links:
http://www.bioject.com
Company News On-Call:
http://www.prnewswire.com/gh/cnoc/comp/101750.html
CONTACT:
Jim O'Shea, Chairman, President & CEO of
Bioject Medical Technologies Inc., +1-503-639-7221, ext. 565; or
Jim Flanagan of IR Strategic Advisors, +1-781-863-1333, or
jflanagan@iradvisors.com, for Bioject Medical Technologies Inc.
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