Press Releases
ARBIOS RAISES $4.8 MILLION TO ADVANCE ITS SEPET™ LIVER ASSIST DEVICE INTO PIVITAL CLINICAL TRIALS
WALTHAM, MA – APRIL 23, 2007 -- Arbios Systems, Inc. (OTC:ABOS), a biomedical device and cell therapy company developing proprietary liver assist products for the treatment of liver failure, today announced that the Company has closed a private placement of units, consisting of its common stock and warrants to purchase its common stock, for gross proceeds of $4.8 million. MicroCapital Funds led the financing round.
Arbios represents an exceptionally high quality development stage opportunity that has not been widely appreciated by the investment industry, said Ian Ellis, President and Portfolio Manager of MicroCapital, LLC. "It is unusual to find a company in the microcap market that is potentially this close to commercializing a product (SEPET™) that could serve such a large, unmet medical need. We have sufficient confidence in the Arbios opportunity that we have not sought seniority over existing investors, thereby facilitating future investment. The financing terms also provide the possibility of up to nearly $9 million in further funding for Arbios through the future exercise of callable warrants."
"We anticipate that these funds will enable us to move forward aggressively with our plans for product registration of our SEPET™ liver assist device in Europe under the medical device CE Mark as well as initiation of a pivotal clinical trial of SEPET™ in support of future commercialization of the product in the United States," stated Walter Ogier, President and Chief Executive Officer of Arbios. "I want to extend our appreciation, both to our current investors, as well as to our new investors, for their support of our mission to help the millions of patients worldwide who experience liver failure."
Financing Terms
The units were sold at a price of $1.30 per unit. Each unit consists of i) two shares of Arbios common stock, ii) one warrant to purchase one share of Arbios common stock exercisable for a period of 2.5 years at an exercise price of $1.00 and iii) one warrant to purchase one share of Arbios common stock exercisable for a period of 5 years at an exercise price of $1.40, comprising a total of 7,478,462 shares of Arbios common stock and warrants to purchase 7,478,462 shares of Arbios common stock. The warrants have no provision for cashless exercise and, subject to certain requirements, may be called by the Company provided that the common stock of the Company trades consistently above $1.50 for the first tranche of warrants and above $2.80 for the second tranche of warrants. Participating in the financing were several new investors, including funds managed by MicroCapital, LLC, as well as several current investors including Bristol Investment Fund, Ltd. Musket Research Associates, an investment banking firm focused on emerging healthcare companies, served as placement agent.
The shares of common stock and warrants offered and sold by the Company in this private placement have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or state securities laws, and may not be offered or sold in the United States without registration under or exemption from the Securities Act, or any applicable state securities laws. The Company has agreed to file a registration statement with the SEC for the resale of the shares of common stock and the shares of common stock underlying the warrants sold in the private placement. This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state.
About SEPET™ Liver Assist Device
The SEPET™ Liver Assist Device is a sterile, disposable cartridge containing microporous hollow fibers with unique permeability characteristics. When a patient's blood is passed through these fibers, blood plasma components of specific molecular weights are expressed through the micropores, thereby cleansing the blood of harmful impurities (i.e., hepatic failure toxins as well as various mediators of inflammation and inhibitors of liver regeneration). These substances would otherwise progressively accumulate in the patient's bloodstream during liver failure, causing hypotension, increasing risk of sepsis development and accelerating damage to the liver, lungs and other organs, including the brain and kidneys, and suppressing the function and regeneration of the liver. SEPET™ is designed for use with standard blood dialysis systems available in hospital intensive care units.
About Liver Disease
According to the American Liver Foundation, chronic liver disease is the tenth leading cause of death in the U.S., resulting in approximately $10 billion in annual healthcare costs. The World Health Organization estimates that 20 million people worldwide have cirrhosis of the liver and/or liver cancer, arising predominantly among the estimated 500 million persons (nearly 10% of the world population) who are afflicted with persistent hepatitis B or hepatitis C viral infections. Liver failure may also result from excessive alcohol consumption, aggressive forms of fatty liver disease or other chronic liver disorders. It can also be caused by ingestion of common medications, such as acetaminophen, contaminated herbal medicines, or toxic mushrooms. An estimated one to two million persons worldwide die each year from liver failure, with more than 50,000 deaths per year in the United States. Liver failure typically develops slowly, and its progression usually goes unnoticed until it becomes life-threatening. It occurs in persons of all ages but is most common (representing the fifth leading cause of death) among 25 to 65 year olds.
There is currently no satisfactory therapy available to treat patients in liver failure, other than maintenance and monitoring of vital functions and keeping patients stable through provision of intravenous fluids and blood products, administration of antibiotics and support of vital functions, such as respiration. While a patient's liver may regenerate on its own to varying degrees, a chronic liver failure patient often continues to lose more and more liver cell mass and function as the disease progresses and ultimately needs to undergo liver transplant surgery. A shortage of livers and other factors make such therapy unavailable to the large majority of liver failure patients worldwide.
Arbios Systems, Inc. is developing proprietary medical devices and cell-based therapies to enhance the survival of millions of patients each year who experience, or are at risk for, life-threatening episodes of liver failure. The Arbios product candidate portfolio includes the SEPET™ Liver Assist Device, a novel blood purification therapy that provides enhanced "liver dialysis," and the HepatAssist™ Cell-Based Liver Support System, a bioartificial liver that combines blood detoxification with liver cell therapy to replace whole liver function in patients with the most severe forms of liver failure. For more information on the Company, please visit http://www.arbios.com.
This press release contains forward-looking statements that involve risks and uncertainties that could cause actual events or results to differ materially from the events or results described in the forward-looking statements, including risks or uncertainties related to the goals and results of clinical trials, compliance with regulatory requirements, labeling of the Company's products, the need for subsequent substantial additional financing to complete clinical development of its products, future markets and demand for the Company's products, and Arbios' ability to successfully market its products and technologies. These statements represent the judgment of Arbios' management as of this date and are subject to risks and uncertainties that could materially affect the Company. Arbios cautions investors that there can be no assurance that actual results or business conditions will not differ materially from those projected or suggested in such forward-looking statements. Please refer to our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2005 for a description of risks that may affect our results or business conditions. The Company does not undertake any obligation to publicly release the result of any revisions to such forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events except as required by law. SEPET™ and HepatAssist™ are trademarks of Arbios Systems, Inc.
