Notice of Intent to Convert From Preferred Shareholder Enables Full Redemption
PORTLAND, Ore., Oct. 19 /PRNewswire/ --
Bioject Medical Technologies Inc. (Nasdaq: BJCT), a leading developer of
needle-free drug delivery systems, today announced that its board of directors
has approved the redemption of all outstanding shares of its Series A
Convertible Preferred Stock for approximately $14.5 million. The Series A
Preferred shares are held by Elan Pharmaceutical Investments, Ltd. (Elan).
Elan gave Bioject notice of Elan's intent to convert the Series A shares into
Bioject common stock at an unspecified future time. Bioject has until
December 31, 2001 to give Elan a binding notice of redemption.
Elan's notice followed Bioject's previously announced notice of redemption
of a portion of the Series A shares held by Elan, pursuant to alternate
redemption rights as stated in the company's articles of incorporation.
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 the planned redemption will be
the repurchase by Bioject of approximately 1.95 million common equivalent
shares for $7.50 a share.
To finance all or part of the planned redemption of Elan's Series A
shares, Bioject's board of directors also authorized the private placement of
up to 2,000,000 shares of common stock and the calling of a special meeting of
shareholders for the purpose of approving the issuance of common stock. It is
currently anticipated that the combined effect of the redemption of the Series
A Preferred Stock and the proposed private placement will generate additional
cash for the company and will not be dilutive to existing stockholders.
"Elan's action in giving notice of intent to convert its Series A shares
has created an excellent opportunity for the company," said Jim O'Shea,
chairman, president and chief executive officer of Bioject. "Redemption of
all of the Series A shares will eliminate future earnings charges for dividend
accruals, simplify our capital structure, and reduce Elan's beneficial
ownership position by over 40%."
In connection with Bioject's previous notice of partial redemption of
Elan's Series A shares, Bioject filed a lawsuit in U.S. District Court in
Oregon seeking an injunction to compel Elan to abide by the redemption
provisions in Bioject's articles of incorporation. Portions of Elan's October
10 letter to Bioject suggest that Elan may dispute Bioject's right to
partially redeem the Series A shares. Bioject will continue to take all
appropriate legal action to enforce its redemption rights, if necessary.
About Bioject Medial Technologies: 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, Serono and
Alkermes.
This press release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. 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/comp/101750.html
CONTACT:
Jim O'Shea, Chairman, President & CEO, or
John Gandolfo, Chief Financial Officer, +1-503-639-7221, both of
Bioject Medical Technologies, Inc.; or Jim Flanagan of IR
Strategic Advisors, +1-781-863-1333, or jflanagan@iradvisors.com,
for Bioject Medical Technologies, Inc
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