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urche

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urche

Re: None

Thursday, 03/23/2006 9:08:35 AM

Thursday, March 23, 2006 9:08:35 AM

Post# of 2096
Response Biomedical

It's been a while since Response has been mentioned here. Its claim as a bird flu play is its point of care (bedside) test for influenza that shows promise as likely being more sensitive than
Quidel's for the H5N1 strain. The test is also of interest for use in animals which would hugely increase its potential market.

Here is a cross post from Biotech Values board highlighting some recent developments with the company:



Very interesting stuff going on with this company.

I think the recent activity with this company (high volume and 150% increase in share price since early October) has to do partly with being in the sweet spot as a bird flu play, but more importantly and directly with this PR from last week:

http://biz.yahoo.com/cnw/060316/response_biomed_ppt.html?.v=1

Response Biomedical Accepts Proposal to Undertake $10 Million Brokered Private Placement and Board Reorganization
Thursday March 16, 8:30 am ET

VANCOUVER, March 16 /CNW/ - Response Biomedical Corp. (TSX-V: RBM, OTCBB: RPBIF), announced today that it has accepted a proposal received from potential new investors. The proposal requires the Company to arrange a brokered private placement for aggregate gross proceeds of $10 million and to undertake a restructuring of its Board.

The private placement is to consist of 20,000,000 units at a price of $0.50 per unit, each unit consisting of one common share and one-half of one common share purchase warrant. Each whole warrant shall entitle the holder thereof to purchase one common share of the Company at a price of $0.62 per share for a period of 24 months from the closing date of the private placement. The private placement will be brokered by both a US-based investment bank and a Canadian-based firm on a best efforts basis subject to regulatory approval. The Company will pay commissions in connection with the financing. The securities issued under the private placement will have a hold period under Canadian law of four months from the closing.

The proposal also provides that concurrent with and conditional upon the completion of this $10 million private placement, Dr. Anthony Holler, Mr. Todd Patrick, Mr. Ian Webb, and Mr. Richard Bear are to be appointed as directors of the Company and the five existing independent directors of the Company will resign. The current management will remain in place following the closing of the financing.

As a condition of the proposal, the Company also expects to close the non-brokered financing announced on December 14, 2005 of up to $2 million at the same time and on the same terms as the above brokered financing. Completion of these financings is subject to approval by the TSX Venture Exchange.



At first I thought this sounded like a hostile takeover of an undercapitalized company desperate for cash. But, a closer look reveals otherwise. The guys taking over as the Response BOD are essentially the former top tier of ID Biomedical, a Canadian company that became so valuable for its vaccine pipeline that it was acquired by Glaxo late last year.

For example, here is a bio on the former CEO:

The recipient of the Executive of the Year Award, Dr. Anthony Holler, CEO of IDBiomedical moved his company forward in 2004 towards its objective of becoming a premier vaccine company with significant marketed products worldwide and an extensive pipeline in both clinical and preclinical development.

During the course of 2004, Dr. Holler demonstrated exceptional vision, focus, and leadership in the following key achievements:

* Acquisition of Shire Pharmaceuticals Group plc’s vaccine business
* Addition of two marketed products in Canada (FLUVIRAL and NEISVAC-C), and related government contracts
* Acquisition of an antigen supply for ID Biomedical’s intranasal FluINsure vaccine
* Acquisition of R&D and manufacturing facilities
* Earned revenues from sale of commercialized product
* Announcement of positive results from FluINsure and StreptAvax clinical trials
* Receipt of NIH grants for development of nasally delivered plague vaccine, SARS vaccine, and cell culture based vaccine for pandemic influenza
* Announcement of strategic alliances for the U.S. marketing and distribution of Fluviral vaccine


So, in a stunning turn of events, Response has just received a high-powered new BOD with significant experience in the field of vaccines and virology as well as a $CDN 12 million infusion to help put it on more solid footing.

For anyone interested, the company has a lot more in its pipeline, and still looks attractively valued to me. But this post is already too long to go on.

Urche
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