HUDDINGE, Sweden, Aug. 29, 2002 (PRIMEZONE) -- Tripep AB (publ):
-- Continued work on GPG and its metabolite has made it clear that the company currently has no candidate drug in the HIV field. -- The collaboration with Ipsat has been broken off by Ipsat owing to the actions of shareholders Rolf Nordstrom, Anders Vahlne, Peter Horal, Bo Svennerholm and Matti Sallberg. -- The bid from Diamyd submitted on 20 June 2002 has been rejected by shareholders representing 55 per cent of the shares. -- Financier and property owner Rolf Nordstrom, and researchers Anders Vahlne, Peter Horal, Bo Svennerholm and Matti Sallberg, who together represent around 40 per cent of the shares and votes, have requested an extraordinary shareholders' meeting on 17 September 2002 with a view to electing a new Board of Directors. Attorney Erik Nerpin, Rolf Nordstrom, Matti Sallberg and Anders Vahlne have been proposed for election to the Board. -- The current Board of Directors proposes to sell the assets and use the proceeds to repay shareholders. Board members Harry Faulkner, Johan Malmsten and Lars Lindegren are standing for re-election and will be supplemented by the election of attorney Otto Rydbeck, the company's legal advisor.
Extraordinary shareholders' meeting on 17 September 2002 Five shareholders, together representing 5,494,400 shares or the equivalent of around 40 per cent of the company's shares, have requested an extraordinary shareholders' meeting to discuss the question of electing a new Board of Directors.
The Board of Tripep AB (publ) has therefore called an extraordinary shareholders' meeting on 17 September 2002 at 18.00 at Naringslivets hus, Storgatan 19 in Stockholm.
They have put forward Erik Nerpin and Matti Sallberg for election to the new Board, in addition to Nordstrom and Vahlne. The group has previously stated that its members intend to promote the payment of dividends or equivalent of SEK 7.50 per share, a proposal previously made by the current Board.
Among other things, the group intends to pursue Tripep's basic research activities in the company's pre-clinical projects. It has also recently stated that its members intend to make every effort to ensure that as large a sum as is permitted, once the capital requirements for a three- year period of operations have been secured, is distributed to shareholders, either in the form of dividends or the redemption of shares. They can therefore no longer actively promote the payment of dividends or similar of SEK 7.50 per share.
The current Board is firmly convinced that the best option for the company's shareholders in the prevailing situation is to request the remission of the loan from Industrifonden of SEK 20 million and then sell the company's assets and use the proceeds to repay its shareholders.
In contrast to previous notifications, the members of the current Board who are not employed by the company, i.e. Board members Harry Faulkner, Johan Malmsten and Lars Lindegren, have decided to stand for re- election, and will be supplemented on the Board by the election of attorney Otto Rydbeck. Should these four people be elected to the new Board, they intend to make every effort to ensure the implementation of the current Board's proposals to sell the company's assets and use the proceeds at the earliest possible date to repay the shareholders. Barring unforeseen difficulties, this should mean that each shareholder would receive around SEK 8.50 per share no later than Q2 2003. This is however conditional on the application for and granting of a remission of the company's SEK 20 million loan from Industrifonden. This loan was granted for the partial financing of the GPG project. If the loan is not remitted, either wholly or in part, the amount that can be paid to shareholders will be correspondingly lower.
Diamyd Medical's bid
On 20 June 2002, Diamyd Medical AB (publ) made a bid for Tripep AB (publ), which was conditional on more than 50 per cent of Tripep AB's shareholders redeeming their shares. Shareholders representing around 55 per cent of the number of outstanding shares do not support Diamyd Medical AB's (publ) bid for Tripep AB (publ). The Board of Tripep AB (publ) therefore noted that the conditions stipulated by Diamyd Medical AB (publ) could not be met.
Collaboration with Ipsat terminated On 6 June 2002, Tripep published a collaboration agreement with Ipsat Therapies Oy, a Finnish biotechnology company. The companies planned to pursue the joint development of a completely new type of drug that will prevent the formation and spread of multi-resistant bacteria in connection with treatment with antibiotics.
Five of the company's shareholders, Rolf Nordstrom, Anders Vahlne, Peter Horal, Bo Svennerholm and Matti Sallberg, made it known that they were opposed to the investment in Ipsat Therapies Oy, and, in view of the prevailing uncertainty, Ipsat Therapies Oy has declined further collaboration.
The operations
GPG
During the preparations for the pharmacological study of GPG and its active metabolite on pigs, certain problems were noted in connection with the way the substance metabolised in pig's blood, and the study was therefore not completed. These findings also mean that toxicological studies on pigs used as the main reference material for the assessment of GPG's safety can no longer be used, since the metabolism of this species differs from that of humans.
The Board has thus been forced to note that GPG was used on a total of 51 patients in two clinical studies with no proven effect. The effect obtained in 5 of the patients at CTN 001 phase I/II must be viewed as highly uncertain, since no patients responded in the subsequent CTN 002 study. Subsequent work has shown that GPG is metabolised immediately in humans. The metabolite formed was active in vitro, but has apparently had no effect on human HIV. The company thus currently has no candidate drug in the HIV field.
Any continued basic research could perhaps lead to the identification of a new candidate drug that could hopefully be patented. Should this work be successful, however, it will be many years before any results are obtained that might be relevant from the industrial point of view.
Vaccines
ChronVac-C(TM) - Hepatitis C - therapeutic vaccine The problem of developing a drug targeting hepatitis C is that, like HIV, this virus constantly mutates (changes), thereby evading the immune system. Tripep's researchers have therefore focused their research on trying to develop a molecule based on the stable parts of the Hepatitis C virus, i.e. parts that are not altered by mutations. The discovery made by Tripep's researchers results, in model systems, in an immune response that is considerably better than that reported by other research groups. Development of the molecule and of the administration forms has yielded excellent results and a candidate drug has been selected. Tripep has commenced work on finding a partner for the continued preclinical development. The patent situation is however extremely complex
CarryVac-HIV 1
The amino-acid sequences patented by Tripep are being used in research into a prophylactic HIV vaccine, as well as a therapeutic vaccine to be used in combination with inhibitory agents. Collaboration in this field is under way with the Vaccine Research Institute of San Diego, from which Tripep has inlicensed a very promising carrier technology which will probably lead to a far better immune response than existing technologies. Tests are being performed on the first of Tripep's virus sequences. The development work focusing on further components of this multivalent vaccine is under way. The first component has been developed and the immunisation of mice with this component has yielded positive results in vitro when it comes to inhibiting HIV.
RAS(TM), Redirecting Antibody Specificity Staphylococcus aureus Research is under way on a unique method of attacking resistant staphylococci that cause nosocomial (hospital-acquired) infections. A number of promising substances have been identified for evaluation in in- vivo models that will simulate a clinical situation. The optimisation of these substances is under way, and the models are also being developed for "proof of concept" purposes.
All projects are currently at the basic research stage and it will be many years before finished products may be available.
Patents
At the end of the period, the company had 13 registered patents and 53 patents pending.
In the light of the results that have emerged, the capitalised value of the GPG and PPI patents has been written off in its entirety (SEK 2.9 million). Remaining patents are still deemed by the company to have a commercial value at least equal to their book value.
Human resources
At the end of the period, the company had 14 employees (17 the previous quarter). Since the end of the period, 8 employees have left the company or reached agreements about leaving the company, and one part-time employee has joined the company, giving a total of 3 full-time employees and 4 part-time employees.
As previously announced, the President and CEO will be leaving his position once the extraordinary shareholders' meeting is held. According to his employment contract, the President and CEO has a 6-month period of notice during which he is entitled to his full salary. He is also entitled to 18 months' severance pay, bringing the total to 24 months.
A special agreement has been reached whereby the President and CEO will receive a one-off payment corresponding to 20 monthly salaries, reduced by 10 per cent. Payment will be made when his duties are terminated. The Board's view is that a one-off payment consisting of his salary during the notice period and his severance pay is not detrimental to the company, since the nominal amount is then reduced. The company's auditor shares the view of the Board that the reduction in the total amount comprising salary during the notice period plus severance pay involved in this one-off payment is reasonable and financially advantageous from the company's point of view.
Change to the Board of Directors
Anders Vahlne, ordinary member of the Board of Tripep AB (publ), resigned from the company's Board on 11 June 2002 with immediate effect.
Financial results
The company does not yet have any revenue. Operating expenses came to SEK 22.7 million (SEK 14.2 m) in Q2 and SEK 34.5 million (SEK 30.9 m) for the first half of 2002.
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