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Oct 1, 2008

Panacea Biotec to Invest $13.3M in PharmAthene

  • Panacea Biotec will purchase PharmAthene shares for $13.1 million, which will give it 14.5% ownership of PharmAthene.

    In a related agreement, PharmAthene has the first right of negotiation to distribute Panacea’s biodefense products in the U.S. The firm also has the right to enter into discussions with Panacea regarding potential development and manufacture of PharmAthene’s biodefense products by Panacea.

    Panacea is buying approximately 3.73 million PharmAthene shares  for $3.50 per share. This represents a 97% premium over the firm’s closing price yesterday. At close of this transaction, expected tomorrow, Panacea will receive 12-month warrants to purchase up to approximately 2.75 million additional shares of PharmAthene common stock at an exercise price of $5.10 per share.

    During the next three years Panacea Biotec agreed to not purchase additional shares of PharmAthene stock without the prior written consent of PharmAthene. Panacea Biotec's subsidiary, Kelisia Holdings through which this agreement was implemented, will be granted limited rights in future private financings by PharmAthene to maintain its current ownership level. In addition, PharmAthene will retain full rights to its proprietary information and technology and full management and operational control.

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Scientifically Studying Ecstasy

MDMA (commonly known as the empathogen “ecstasy”) is classified as a Schedule 1 drug, which is reserved for compounds with no accepted medical use and a high abuse potential. Two researchers from Stanford, however, call for a rigorous scientific exploration of MDMA's effects to identify precisely how the drug works, the data from which could be used to develop therapeutic compounds.

Do you agree that ecstasy should be studied for its potential therapeutic benefits?

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