AnorMED Inc. On Track To Maximize Shareholder Value Under
Leadership of Current Management & AnorMED Proposed Board Slate
VANCOUVER, March 27 /PRNewswire-FirstCall/ -- The Board of
Directors of AnorMED Inc. (TSX: AOM; AMEX:AOM) has recommended that
shareholders vote in favor of the AnorMED slate of director
nominees and reject any slate of director nominees that may be
proposed by a dissident group of shareholders, represented by The
Baker Group, holding approximately 23 percent of the Company's
shares. The slate of directors recommended by the AnorMED Board and
Management includes three(x) new nominees selected for their
expertise in drug commercialization, operational and financial
leadership and the management of profitable companies: Michael
Abrams, President & CEO, Director & Founder, AnorMED Inc.
2006 Recipient of the 2006 Julia Levy award for biomedical
innovation and commercialization in Canada. (x) William L. Hunter,
President & CEO, and co-founder, Angiotech Pharmaceuticals,
Inc., Director of the Michael Smith Foundation for Health Research.
Former director of Neuromed Technologies, Vigil Health Management
and Viewpoint. (x) Jeanette Fritzky, Independent Consultant. Former
Head of Global and US Marketing for Chiron Corporation,
BioPharmaceutical Division. (x) Michael Van Every, CA, Current
Director of Biovail Corporation and Chair of Biovail Corporation's
Audit Committee. Current Director of Kelman Technologies. Julia
Levy, Director of AnorMED Inc., former President & CEO, and
co-founder of QLT Inc., Director of a number of private
biotechnology companies and Working Opportunity Fund, a
labour-sponsored mutual fund, Past President of the Canadian
Federation of Biological Sciences, and an Officer of the Order of
Canada. Colin Mallet, Director of AnorMED Inc., former President
and CEO of Sandoz Canada Inc. (now Novartis), past Chair of the
Canadian Association of Research-based Pharmaceutical companies,
Director on the boards of Axcan Pharma Inc., MethylGene Inc. and
Migenix Inc. Michael Cleare, Director of AnorMED Inc., Executive
Director, Science & Technology Ventures, Columbia University,
Former Managing Director & President, Electronics Materials
Division and Pharmaceutical Materials Group, Johnson Matthey plc
David Scott, Chairman of AnorMED Inc., Corporate Director, Former
President MDS Ventures Pacific Inc., a subsidiary of MDS Capital
Corporation. Shareholders are recommended to vote their BLUE
AnorMED proxy in advance of the Special Meeting to be held on April
21, 2006. Only registered and appointed proxyholders will be able
to vote at the Special Meeting. For more information on how to vote
your BLUE proxy or where to receive the AnorMED Management Proxy
Circular please contact Georgeson Shareholder, AnorMED's proxy and
information agent at the following North American toll free number
1-866-267-8910 or collect at 416-642-7069. For additional and
updated information shareholders are welcomed to visit our website
at http://www.anormed.com/ The reasons for the Board's
recommendation that shareholders vote FOR AnorMED's slate of
directors, outlined in AnorMED's proxy circular, are summarized
below. - As of the time of today's announcement, the Baker Group
has disclosed neither the basis for their requisition to replace
the Board nor any specific plans for AnorMED Inc. - The Baker
Group's slate lacks independence needed to act in the best
interests of all shareholders. The Baker Group are attempting to
obtain control of AnorMED without paying a control premium, and
therefore are not acting in the best interests of AnorMED and its
shareholders. Dr. Baker's Rights Offering Proposal in the fall of
2005 is an example of his attempt to further his own interests and
disregard those of all AnorMED shareholders. - The Baker Group's
slate of nominees is not independent, because at least six of the
eight nominees of the Dissidents have business connections to the
Baker Group. The election of the Baker Group's proposed slate of
nominees would result in the Baker Group achieving effective
control of the Corporation through control of the Board without
having to pay AnorMED Shareholders a change of control premium. For
this reason, Dr. Michael Abrams, the Corporation's Chief Executive
Officer and founder, declined to participate on the Baker Group's
slate of nominees. - AnorMED is in advanced partnering discussions
for the commercialization of MOZOBIL(TM). These partnerships are
expected to maximize value and provide cash to fund the ongoing
development activities of the Corporation through 2007 - completion
of these arrangements may be impaired by the Baker Group's
initiatives. - AnorMED's senior management is crucial for its
scientific and clinical success, and its ability to maximize the
value of AnorMED's shares; yet Dr. Baker has deliberately created a
climate of uncertainty regarding his intentions for AnorMED and the
ongoing role of the Corporation's senior management. This has
significant implications for AnorMED's ability to retain and
attract key employees and management. - In support of AnorMED's
plan to commercialize MOZOBIL(TM), AnorMED's lead Phase III
product, the Board and Management recently hired a Vice President
of Marketing and Director of Medical Affairs to develop and prepare
a commercialization plan and build market awareness of MOZOBIL(TM).
AnorMED also intends to seek a Chief Operating Officer within the
next year to support its commercial operations. As AnorMED
continues to progress, the Board will assess all senior management
roles, responsibilities and requirements. - The Board is confident
that once shareholders understand the facts and motivations
surrounding the Baker Group's attempt to takeover AnorMED,
shareholders will vote for AnorMED's nominee directors, including
Michael Abrams, the current CEO. The Board of Directors of AnorMED
urges shareholders to NOT sign or return any forms of proxy that
may be sent to you by the dissident shareholder group. AnorMED is a
chemistry-based biopharmaceutical company focused on the discovery,
development and commercialization of new therapeutic products in
the areas of hematology, HIV and oncology. The Company has a
product in Phase III development, a product in Phase II development
and a research program focused on a novel class of compounds that
target specific chemokine receptors known to be involved in a
variety of diseases including HIV. Additional information on
AnorMED Inc. is available on the Company's website
http://www.anormed.com/. Note: Certain of the statements contained
in this press release may contain forward-looking statements and
forward-looking information within the meaning of applicable
securities laws, including the Ontario Securities Act, Section 27A
of the U.S. Securities Act of 1933 and Section 21E of the U.S.
Securities Exchange Act of 1934. Statements or information
regarding strategy, future operations, future financial position,
future revenues, projected costs, prospects and plans and
objectives of management are forward- looking statements. The words
"anticipates, "believes", "budgets", "could", "estimates",
"expects," "forecasts", "intends", "may", "plans", "projects",
"schedule", "should", "will", "would" and similar expressions are
intended to identify forward-looking statements or information,
although not all forward- looking statements or information contain
these identifying words. Plans, intentions or expectations
disclosed in any forward-looking statements or information should
not be read as guarantees of future results or events, and will not
necessarily be accurate indications of whether or the times at or
by which such results or events will be achieved. Forward-looking
statements or information 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 or information. Investors are referred to the discussion
of such risks, uncertainties and other factors in AnorMED's Final
Short Form Prospectus dated December 1, 2005 filed on SEDAR with
Canadian securities regulatory authorities and in Exhibit 99.1 to
AnorMED's Report on Form 6-K filed with the U.S. Securities and
Exchange Commission on December 23, 2005. Except as required by
law, AnorMED expressly disclaims any intention and undertakes no
obligation to update any forward-looking statements or information
as conditions change. TELECONFERENCE CALL NOTIFICATION: Monday,
March 27, 2006
-------------------------------------------------------- 9:00am
EST/6:00am PST --------------------- On March 27, 2006, AnorMED
Inc. will host a teleconference call at 9:00 am EST (6:00 am PST).
Participants will be in listen only mode. To listen to the
teleconference please dial 1-800-558-5253 in Canada and the U.S. or
1-416-626-4100 Internationally after 9:00 am EST. The reservation
number required for access is No. 21288034. This call will be
available on replay until April 26, 2006. This call will also be
webcast from AnorMED's website at http://www.anormed.com/. For
further information: Dr. Michael Abrams President & CEO Tel:
604-530-1057 E-mail: Elisabeth Whiting, M.Sc. VP Corporate
Development & Communications Tel: 604-532-4667 Cell:
604-763-4682 E-mail: ADDITIONAL INFORMATION FROM THE ANORMED PROXY
CIRCULAR FOR SHAREHOLDERS AND REPORTERS RATIONALE TO SUPPORT
ANORMED'S NOMINEES
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The Baker Group is attempting to obtain control of AnorMED without
paying AnorMED Shareholders a control premium, and therefore Dr.
Baker is not acting in the best interests of AnorMED and its
Shareholders
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The Baker Group's Slate Lacks Independence Needed to Act in the
Best Interests of All Shareholders The election of the Baker
Group's proposed slate of nominees would result in the Baker Group
achieving effective control of the Corporation through control of
the Board without having to pay AnorMED Shareholders a change of
control premium. At least six of the eight nominees of the
Dissidents have business connections to the Baker Group, including:
- Dr. Baker himself. - Kelvin Neu - an associate at Baker Brothers
Advisors, LLC. - Berl Nadler - The Baker Group's Canadian lawyer. -
Jacques Lapointe - Certain entities of the Baker Group hold
approximately 23% of the shares of ConjuChem Inc. (on a
fully-diluted basis), a company in which Dr. Baker and Mr. Lapointe
are directors. Mr. Lapointe was also President and Chief Executive
Officer of ConjuChem Inc. from October 2003 to October 2005 during
which time certain entities of the Baker Group were the sole
purchasers of a $15 million convertible senior subordinated notes
financing. - Henry Fuchs - Certain entities of the Baker Group
owned 26.4% of a company in which Mr. Fuchs was at the time the
chief executive officer. Mr. Fuchs later joined another company as
chief medical officer just prior to certain entities of the Baker
Group expanding their ownership in such company. - Joseph Dougherty
- Mr. Dougherty's company, Seaview Securities LLC, was engaged in
2003 by ConjuChem Inc., a company in which Dr. Baker is a director
and which is chaired by another Baker Group nominee, Jacques
Lapointe (see above). Seaview received 200,000 options, half of
which it exercised, selling the resulting shares for a profit of
approximately $250,000. The Baker Group asks that Shareholders
abandon the best corporate governance practices currently followed
by AnorMED in favour of a board of directors comprised mainly of
individuals whose business interests are related to the Baker
Group. If the Baker Group wants to control the board of AnorMED,
and therefore the Corporation itself, they should propose a
take-over bid and pay a fair price for control. The lack of
independence in the Baker Group's proposed slate of directors is
troubling to the Corporation's management and to all Board members
with the exception of Dr. Baker. Dr. Baker's Rights Offering
Proposal was an Attempt to Further his Own Interests and Not Those
of the Corporation's Shareholders Dr. Baker's motives to increase
the Baker Group's control over the Corporation were evidenced by
his actions in the fall of 2005 when the Corporation required
capital to fund its operations and development pipeline. Dr. Baker
insisted that the Corporation conduct a rights offering that the
Baker Group would backstop and purchase, for a fee payable by the
Corporation to the Baker Group's companies, any Common Shares not
taken up by the Corporation's minority Shareholders. One of the
features of Dr. Baker's proposal was that the discount of the
purchase price to the then market value of the Corporation's Common
Shares would be relatively modest (contrary to typical rights
offerings), thereby not creating an incentive for Shareholders,
other than the Baker Group, to participate. This could have
resulted in the Baker Group increasing their ownership in AnorMED,
potentially up to 36%, without having to pay a change of control
premium to existing Shareholders. In response to the Board's
concern that the Baker Group may effectively acquire control by
backstopping the proposed rights offering, Dr. Baker suggested that
any shares purchased by the Baker Group that caused the Baker Group
to exceed a 24% ownership level of the Corporation would be subject
to a voting trust agreement with the Corporation. While Dr. Baker's
proposal attempted to address the issue of voting control in part,
it would still have allowed the Baker Group's voting interest in
the Corporation to increase and in any case, his proposal did not
address the fact that Shareholders of the Corporation would not be
receiving a control premium, nor did it prevent the Baker Group
from selling their control position at a premium to a third party.
As a director of the Corporation, Dr. Baker has a duty to act
honestly and in good faith with a view to the best interests of the
Corporation and the Shareholders at large and exercise the care,
diligence and skill that a reasonably prudent person would exercise
in comparable circumstances. Even after the Board received
independent financial advice from Blair Franklin Partners Inc.
advising the Board to proceed with a bought deal financing, Dr.
Baker continued to insist that the appropriate capital markets
strategy for AnorMED was his proposed rights offering. Dr. Baker's
actions subsequent to the closing of the financing suggest that Dr.
Baker was being motivated by a desire to increase the percentage
interest in the Corporation held by the Baker Group and not by his
concerns for the best interests of the Corporation or its
Shareholders at large.
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AnorMED's senior management is crucial for its scientific and
clinical success, and its ability to maximize the value of your
shares; yet Dr. Baker has deliberately created a climate of
uncertainty regarding his intentions for AnorMED and the ongoing
role of the Corporation's senior management. This has significant
implications for AnorMED's ability to retain and attract key
employees and management.
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After being actively involved with the other directors in
establishing strategy for AnorMED, and voting in favour of the most
recent strategic plan and objectives, Dr. Baker has aggressively
questioned the competence of the Board in its guidance of the
Corporation. This criticism has not been productive in light of his
failure to indicate any preferred alternative strategy. Despite
repeated requests, Dr. Baker has reinforced the Board's position
that he is more interested in gaining control rather than in
creating value for the Shareholders of the Corporation other than
the Baker Group. By choosing to requisition a Special Meeting,
rather than actively pursuing a mutually agreeable resolution
focused on the optimal strategic direction for the Corporation, Dr.
Baker has deliberately taken a path that will incur significant and
unnecessary expenses for the Corporation and its shareholders. Not
only have substantial legal expenses been incurred by both sides,
but, if his slate is elected, all of the existing change of control
provisions will be triggered, at a potential cost of $2.7 million
and accelerated option vesting for management, if they stay in the
employ of the Corporation for the first six months after the date
of the Shareholders meeting. This is an important fact which Dr.
Baker failed to mention in his press release on March 17, 2006. For
two months, Dr. Baker refused any form of compromise, despite
numerous approaches by David Scott, the Chair of the Board and by
Mike Abrams, the Chief Executive Officer. In fact, on February 27,
2006 he stated that his position, outlined on January 5, 2006 had
not been intended for negotiation. When he did finally move towards
a compromise proposal, this was accepted by the Special Committee
of the Board, with the proviso that there be adequate severance
protection for the senior executives of AnorMED in the event of
termination. This was due to the prolonged and contentious nature
of the process and the magnitude of change to the Board under the
compromise proposal. Employment provisions for change in control
are not abnormal, and are usually triggered if 50% or more of the
Board members are replaced in a two (2) year period (as is the case
in the compromise solution suggested by Dr. Baker). There is,
however, a mechanism in AnorMED's change of control agreements, to
deal with regular attrition, where a major change in the Board
agreed by at least 80% of the directors would not be defined as
triggering the change in control mechanism. Contrary to Dr. Baker's
assertions in his Press Release on March 17, 2006, the Special
Committee and the senior management team of nine (9) people at
AnorMED supported a position in which the management would not
receive the approximately $2.7 million retention bonuses or the
accelerated vesting of options, specified in the change of control
agreements. However, the approval of the compromise solution by the
Special Committee was contingent on the retention of severance
provisions for management, similar to those in the change of
control contracts; these would cost AnorMED nothing, if there were
no plans to terminate or constructively dismiss senior management.
Rather than taking this opportunity to heal some of the wounds
caused by the process, Dr. Baker rejected the offer and insisted on
termination terms, which, in the case of long service, were less
than terms that some senior management already had in their
standard employment contracts. Dr. Baker further compounded the
problem, by insisting that the individual change of control
contracts, which are due for extension every two (2) years, should
not be extended for the another two year period, undermining senior
management's confidence in their future with AnorMED with a Board
heavily influenced by Dr. Baker. This rejection by Dr. Baker of the
compromise solution seems incomprehensible, particularly in light
of the fact that the election of Dr. Baker's slate will trigger the
full cost and severance provisions in the change of control
contracts. Furthermore, Dr. Baker's actions have exacerbated the
uncertainty among members of the Special Committee and senior
management of AnorMED as to Dr. Baker's intentions. As a result,
the view of the Special Committee is that if Dr. Baker's slate is
elected, there is a high risk that progress in the development of
MOZOBIL(TM) and AnorMED, and the value of the Corporation, could be
seriously undermined.
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AnorMED is in advanced partnering discussions for the
commercialization of MOZOBIL(TM). These partnerships are expected
to maximize value and provide cash to fund the ongoing development
activities of the Corporation through 2007 - completion of these
arrangements may be impaired by the Baker Group's initiatives
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AnorMED is currently focused on achieving worldwide approval for
the sale of MOZOBIL(TM) for collection of stem cells for stem cell
transplantation in cancer patients. In this indication alone,
MOZOBIL(TM) represents a US$200 million to US$300 million annual
market opportunity worldwide, which could increase significantly if
any of the applications in adjunctive cancer treatment and/or
tissue repair come to fruition. AnorMED is focused on a strategy to
commercialize MOZOBIL(TM) either alone or with a partner in North
America and to license MOZOBIL(TM) to a partner in the EU and rest
of the world. The Corporation is in advanced discussions with
several potential partners regarding the commercialization of
MOZOBIL(TM) in Europe and globally. Terms discussed to date include
significant upfront payments, milestone payments and royalty rates
that reflect the advanced development stage of the product. The
ongoing discussions suggest that the Corporation will receive a
royalty rate consistent with rates that would be obtained if the
Phase III results were already known. The royalty rates being
discussed are currently in the range of 25% to 40% of revenue and
may vary based on the magnitude of the milestone payments and the
level of revenue. The Corporation believes that the upfront and
near term milestone payments should be sufficient to avoid further
financings prior to the Corporation's publication of top-line data
from its pivotal Phase III clinical trials. The hostile process
initiated by the Corporation's largest Shareholder and a potential
change in control of the Corporation through the election of the
Dissident's slate of nominees has and will continue to make it
difficult for AnorMED to finalize a partnership. Potential partners
are concerned about the Board's ongoing support of such a
significant collaboration, and have expressed concern regarding the
potential loss of senior management and staff crucial to the
successful execution of the MOZOBIL(TM) program. Europe is a
substantial market representing roughly half of the potential
worldwide sales for MOZOBIL(TM). AnorMED has the opportunity to
accelerate, by one year, the commercialization of MOZOBIL(TM) in
Europe through an early Conditional Marketing Approval (CMA). This
CMA will only be possible if AnorMED rapidly establishes a European
partner to undertake certain critical European Union regulatory
responsibilities and provide sales launch expertise. AnorMED does
not currently have the resources to substantially develop or launch
MOZOBIL(TM) in the European Union. A delay in the development of
MOZOBIL(TM) in Europe will adversely effect the launch timing and
likely the potential market size thereby reducing the value of this
important asset. AnorMED's partners in Europe will influence what
it can achieve in North America. Some potential partners for Europe
are also interested in partnering in North America. Such
alternatives could offer substantial synergies. AnorMED has engaged
an experienced financial advisor to assist the Corporation in
assessing alternatives to maximize the value of AnorMED and its
MOZOBIL(TM) asset.
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Important Steps Being Implemented to Strengthen the Board and
Management
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As the Corporation completes the development of MOZOBIL(TM) and
begins to execute its commercialization strategy, senior management
of the Corporation and the Board will be critical to the success of
the Corporation's commercialization efforts. In order to move the
Corporation from its current stage of research and development and
clinical trials to commercialization, the Board has long recognized
that additional commercial and operating expertise will be
necessary at both the senior management and Board levels. To
address these requirements the Nominating Committee and Special
Committee has recommended the following new nominees to the Board,
namely Jeanette Fritzky, William L. Hunter, and Michael Van Every.
The new nominees were selected for their expertise in drug
commercialization, leadership in transition to profitability and
finance. The Board has recently played an active role in hiring a
Vice President of Marketing and the Corporation has hired a
Director of Medical Affairs to develop and prepare a
commercialization plan and build awareness of MOZOBIL(TM) within
the target market. The Corporation also intends to hire a Chief
Operating Officer with commercial experience within the next year
to aid in the Corporation's transition from that of a purely
research and development company to one which includes commercial
operations. As the Corporation continues to progress, the Board
will assess all senior management roles, responsibilities and
requirements. DATASOURCE: AnorMED Inc. CONTACT: Dr. Michael Abrams,
President & CEO, Tel: (604) 530-1057, E-mail: ; Elisabeth
Whiting, M.Sc., VP Corporate Development & Communications, Tel:
(604) 532-4667, Cell: (604) 763-4682, E-mail:
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