LAUSANNE, Switzerland and BILTHOVEN, The Netherlands and IRVINE, Calif.,
Oct. 27 /PRNewswire-FirstCall/ -- IsoTis (SWX/Euronext Amsterdam: ISON) is
proud to announce the full completion of the merger between IsoTis S.A. and
GenSci OrthoBiologics Inc. (TSX: GNS). This marks the creation of a new
global contender in the rapidly growing field of OrthoBiologics.
With the combination of the two companies' sales and marketing functions
and the integration of R&D virtually complete, IsoTis now stands well
positioned towards establishing itself as a world market leader in
OrthoBiologics, the fastest growing segment of the US$16 billion orthopedics
market.
The OrthoBiologics sector, driven in large part by an aging, increasingly
active population, is expected to keep growing at double digit percentages for
the next several years. IsoTis OrthoBiologics combines considerable expertise
in natural bone grafts, synthetic bone graft substitutes, carrier technologies
and growth factors.
IsoTis has 6 leading edge products on the market, 9 more in the near to
medium term pipeline and a focused, clearly defined longer-term research and
product development program. The independent distribution network of 400
sales representatives provides a solid foundation for future top line North
American growth, while a full product offering of leading edge technologies
will help fuel the vigorous expansion of the highly fragmented, relatively
underdeveloped European and international markets.
As previously stated, in light of recent revenue growth and market
penetration trends of the company's products, management expects that
full-year 2003 sales of IsoTis OrthoBiologics will slightly exceed 2002
combined sales of US$23 million. Management expects IsoTis OrthoBiologics to
become cash-flow break-even and profitable during 2005.
Jacques Essinger, CEO of IsoTis OrthoBiologics said: "We are delighted at
the completion of the merger. The opportunities for the company and its
shareholders are significant. We have a strong product range on the market
with substantial distribution power; we have a near-term pipeline and the
development expertise to keep introducing new orthobiologics solutions; we
have access to one of the world's largest research groups in our field to fuel
long-term growth; and we have the organization and the financial resources to
put the company on a steep growth curve in the years to come."
IsoTis OrthoBiologics -- IsoTis OrthoBiologics was created in Q4 2003
through the merger of GenSci OrthoBiologics, a US-based orthobiology company,
and IsoTis SA, a Swiss-Dutch biomedical company. The company operates out of
its corporate headquarters in Lausanne, Switzerland, and its facilities in
Bilthoven, The Netherlands and in Irvine, California, US. IsoTis
OrthoBiologics has approximately 150 employees, a product portfolio with 6
orthobiology products on the market and 9 in development, pro-forma product
sales of US$ 23 million in 2002, and is traded under the symbol "ISON" on both
the Official Market Segment of Euronext Amsterdam, and the Main Board of the
Swiss Exchange.
For information contact:
Hans Herklots Louis G. Plourde
Media & investor relations Investor/shareholder relations
Tel: +31(0)30 229 5271 Tel: + (800) 561-2955 (North America)
Fax: +31(0)30 228 0255 E-mail: louis.plourde@isotis.com
E-mail: investor.relations@isotis.com
Website: http://www.isotis.com
(Certain statements in this Press Release are "forward-looking
statements", including those that refer to management's plans and expectations
for future operations, prospects and financial condition. One can identify
these forward-looking statements by use of words such as 'strategy,'
'expects,' 'plans,' 'anticipates,' 'believes,' 'will,' 'continues,'
'estimates,' 'intends,' 'projects,' 'goals,' 'targets' and other words of
similar meaning. One can also identify them by the fact that they do not
relate strictly to historical or current facts. Such statements are based on
the current expectations of the management of IsoTis S.A. and GenSci only.
Reliance should not be placed on these statements because, by their nature,
they are subject to known and unknown risks and can be affected by factors
that are beyond the control of IsoTis/GenSci. Actual results could differ
materially from current expectations due to a number of risk factors and
uncertainties, including but not limited to the timely commencement and
success of IsoTis' and GenSci's clinical trials and research endeavors, delays
in receiving U.S. FDA or other regulatory approvals (a.o. EMEA, CE), market
acceptance of the combined Company's' products, development of competing
therapies and/or technologies, the terms of any future strategic alliances,
the need for additional capital, the inability to obtain, or meet conditions
imposed for the required governmental and regulatory approvals and consents,
the risk that implementing the merger may not provide all or any of the
benefits projected, as it will place significant demands on our management.
For a more detailed description of the risk factors and uncertainties
affecting IsoTis, refer to the Joint Information Circular and to IsoTis'
reports filed from time to time with the Swiss Stock Exchange, SWX, Euronext
Amsterdam N.V. For a more detailed description of the risk factors and
uncertainties affecting GenSci, refer to the Joint Information Circular and to
GenSci's reports filed from time to time with the Canadian securities
regulators, available at http://www.sedar.com. IsoTis and GenSci are not obligated
to update or revise any forward-looking statements, whether as a result of new
information or otherwise.
This communication shall not constitute an offer to sell or the
solicitation of an offer to buy securities, nor shall there be any sale of
securities in any jurisdiction in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws
of such jurisdiction.)
ANNEX
NOTICE TO GENSCI SHAREHOLDERS
The merger has been effected by way of a Plan of Arrangement under the
Company Act (British Columbia). In accordance with the Plan, the directors of
GenSci Regeneration Sciences Inc. have fixed the initial share exchange ratio
(the portion of an IsoTis Share to be exchanged for each GenSci share) at a
minimum of 0.46 of an IsoTis Share for each GenSci Share. Later this week, on
October 31, the GenSci board will make a final determination of GenSci's tax
and other liabilities resulting from the plan of arrangement, at which time
the final share exchange ratio will be determined. In no event will the share
exchange ratio be less than 0.46 of an IsoTis Share for each GenSci share.
The issuance of new IsoTis Shares is subject to formal registration of the
shares in Switzerland, which is expected to be completed on October 30, 2003,
barring any unforeseen circumstances.
CORPORATE FACTSHEET
Orthobiologics Defined:
Orthobiologics combines advances in biotechnology, materials sciences and
tissue biology to promote and enhance the body's natural ability to regenerate
and repair musculoskeletal tissue.
Corporate Overview
ISOTIS Orthobiologics was created as a result of the merger between
Swiss-Dutch biomedical company ISOTIS S.A., and US-based GenSci
Orthobiologics, of Irvine, California. With expected 2003 revenues slightly
exceeding the US$23 million pro-forma for 2002, more than US$50 million cash
by the end of 2003, and highly complementary product and technology platforms,
the new company is set to become a significant global force in orthobiologics,
the fastest growing segment of the US$16 billion orthopedics market. The
combined entity expects to sustain continued long-term growth in revenues
through immediate development of its innovative orthobiologics pipeline. The
companies have already identified a variety of ongoing product development
programs that have the potential to lead to breakthrough products in
musculoskeletal repair.
Recent Developments
The just-completed merger transaction and the months leading to its
completion have provided both companies an opportunity to restructure, sharpen
our focus, dramatically reduce operating expenses and divest or out-license
non-core research programs, with a view to achieving rapid top line revenue
growth and profitability while securing a downstream interest in non-core
technology product development programs.
* 10/03: ISOTIS and University of Twente Establish World Class
Orthobiologics Research Group
* 08/03: ISOTIS signs worldwide exclusive licensing agreement for Allox,
its lead cell-based product treatment of chronic skin wounds with
Healthpoint Inc. (USA)
The Orthobiologics Market
Bone graft substitutes, processed allograft products, and genetically
engineered bone growth factors have significant future potential within
orthopaedics. In line with trends in all of the major orthopaedic market
segments, demographics will be the biggest driver increasing both value and
volume of the bone graft substitutes market. As the global population
continues to age, and the average level of physical activity grows, the number
of orthopaedic procedures which require the use of bone grafts and substitutes
will continue to increase. Further, minimally invasive procedures will
encourage a greater percentage of the population to seek treatment.
Principal Applications for Products
Spinal Fusion
Degenerative disc disease, characterized by a progressive compression of
the intervertebral discs, afflicts nearly half the US population between forty
and sixty years of age and approximately 90 percent of Americans older than
sixty.
Trauma
Over 500,000 orthopaedic fractures occurring annually in the US eventually
progress to delayed union or nonunion fractures. Among fractures not
resulting from osteoporosis, sports injuries, automobile and heavy machinery
accidents are the main culprits.
Joint Revision
Hip, knee, shoulder, and small joint replacements are common orthopaedic
procedures designed to replace the function of joints, most often necessary
due to advanced osteoarthritis.
Bone Void Filling, Iliac Crest Backfills
When a tumor is removed, or another type of bone void exists, bone graft
or a bone substitute will usually be utilized to replace lost volume and
provide an osteoconductive material to encourage bone growth.
Craniomaxillofacial Surgery
Grafting and bone substitutes are used in conjunction with
craniomaxillofacial reconstruction and repairs.
Oral and Periodontal Repair
Oral and periodontal repairs usually require the use of a bone graft,
filler or substitute and may be performed by oral surgeons, periodontists, and
general dentists.
Existing Product Platforms
GenSci OrthoBiologics is recognized as a significant participant in the
North American bone graft substitutes market. Its OrthoBlast(R) II,
DynaGraft(R) II, and Accell(R) DBM 100 product lines are well-recognized and
accepted in the orthopaedic community. ISOTIS contributes its innovative
synthetic bone graft substitute OsSatura(TM), its family of other small
medical devices, and its promising PolyActive(TM) BCP program, which
constitutes a potential breakthrough in the treatment of osteochondral
defects. In the first half year of 2003, OsSatura(TM) received both the CE
mark (on the claim of osteoconductivity and osteoinductivity) and FDA 510(k)
approval (on the claim of osteoconductivity) in quick succession.
Business Strategy & Key Forward Market Drivers
ISOTIS Orthobiologics becomes a company with immediate and substantial
critical mass in the fast growing field of orthobiologics. Its goal, based on
sales growth and improving margins, is to enter the top tier of the global
orthobiology industry. Management identified the following drivers for growing
sales and improving margins:
Leverage existing US distribution channel
ISOTIS intends to fully support independent distributors and their 400
dedicated sales reps with the potential for substantially increased sales to
their existing customer base by:
* offering a combined "natural" and "synthetic" product mix, initially
consisting of OrthoBlast(R) II, Dynagraft(R) II, Accell(R) DBM 100 and
OsSatura(TM);
* aggressive R&D initiatives to develop and obtain timely approvals for
a series of superior new products;
* having the means for a pointed ISOTIS OrthoBiologics corporate
marketing campaign;
* providing solid product marketing, sound scientific and clinical data
to support product claims.
Accelerate European and other international sales
The breadth of the new ISOTIS' combined product platforms and an
established European production sales and marketing infrastructure provides an
opportunity to rapidly ramp up European and international sales and establish
a stronghold in what remains a highly fragmented, underdeveloped marketplace.
Combined new product development
The merger has brought together GenSci's expertise in natural bone
(demineralized bone matrix) and carrier technologies with ISOTIS' expertise in
synthetic bone graft substitutes. Combining natural and synthetic technology
platforms will enable the Combination to obtain approval for a number of new,
superior bone graft substitute products in the course of 2004 and 2005, and
launch these products through the existing distribution channels. By 2006,
the Combination expects to obtain regulatory approval for its potential
breakthrough solution for osteochondral defects, PolyActive(TM) BCP.
Exclusive focus on orthobiology and applying a strict medical device product
development approach will ensure a clearer regulatory pathway.
Management
Jacques R. Essinger, Ph D, Chief Executive Officer
Pieter Wolters, Chief Financial Officer
John F. Kay, Ph D, Chief Scientific Officer
Jim Hogan, President, EMEA/Asia Pacific
Board of Directors of ISOTIS OrthoBiologics
James S. Trotman, Chairman
Aart Brouwer, Vice-Chairman
Patrick Aebischer
Darrell Elliott
Jacques Essinger
Henjo Hielkema
Daniel Kollin
Corporate Headquarters:
18-20, Avenue de Sevelin
1004 Lausanne, Switzerland
Phone: +41 21 620 60 00
Fax: +41 21 620 60 60
http://www.isotis.com
European Operations:
Prof. Bronkhorstlaan 10-D
3723 MB Bilthoven, The Netherlands
PO Box 98, 3720 AB Bilthoven, The Netherlands
Phone: +31 30 229 5 229
Fax: +31 30 228 0 255
North American Operations:
2, Goodyear
Irvine, CA
92618
Phone: 949 595 8710
Fax: 949 595 8711
SOURCE IsoTis
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Related links:
http://www.isotis.com
CONTACT:
Hans Herklots, media & investor relations,
+31(0)30-229-5271, fax, +31(0)30-228-0255,
investor.relations@isotis.com , or Louis G. Plourde,
investor/shareholder relations, +1-800-561-2955 (North America),
louis.plourde@isotis.com
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