IsoTis / GenSci Merger Complete: 'IsoTis OrthoBiologics' Emerges as
a Major New Global Player LAUSANNE, Switzerland and BILTHOVEN, The
Netherlands and IRVINE, Calif., Oct. 27 /PRNewswire-FirstCall/ --
IsoTis (SWX/Euronext Amsterdam: ISON) is proud to announce the full
completion of the merger between IsoTis S.A. and GenSci
OrthoBiologics Inc. (TSX: GNS). This marks the creation of a new
global contender in the rapidly growing field of OrthoBiologics.
With the combination of the two companies' sales and marketing
functions and the integration of R&D virtually complete, IsoTis
now stands well positioned towards establishing itself as a world
market leader in OrthoBiologics, the fastest growing segment of the
US$16 billion orthopedics market. The OrthoBiologics sector, driven
in large part by an aging, increasingly active population, is
expected to keep growing at double digit percentages for the next
several years. IsoTis OrthoBiologics combines considerable
expertise in natural bone grafts, synthetic bone graft substitutes,
carrier technologies and growth factors. IsoTis has 6 leading edge
products on the market, 9 more in the near to medium term pipeline
and a focused, clearly defined longer-term research and product
development program. The independent distribution network of 400
sales representatives provides a solid foundation for future top
line North American growth, while a full product offering of
leading edge technologies will help fuel the vigorous expansion of
the highly fragmented, relatively underdeveloped European and
international markets. As previously stated, in light of recent
revenue growth and market penetration trends of the company's
products, management expects that full-year 2003 sales of IsoTis
OrthoBiologics will slightly exceed 2002 combined sales of US$23
million. Management expects IsoTis OrthoBiologics to become
cash-flow break-even and profitable during 2005. Jacques Essinger,
CEO of IsoTis OrthoBiologics said: "We are delighted at the
completion of the merger. The opportunities for the company and its
shareholders are significant. We have a strong product range on the
market with substantial distribution power; we have a near-term
pipeline and the development expertise to keep introducing new
orthobiologics solutions; we have access to one of the world's
largest research groups in our field to fuel long-term growth; and
we have the organization and the financial resources to put the
company on a steep growth curve in the years to come." IsoTis
OrthoBiologics -- IsoTis OrthoBiologics was created in Q4 2003
through the merger of GenSci OrthoBiologics, a US-based
orthobiology company, and IsoTis SA, a Swiss-Dutch biomedical
company. The company operates out of its corporate headquarters in
Lausanne, Switzerland, and its facilities in Bilthoven, The
Netherlands and in Irvine, California, US. IsoTis OrthoBiologics
has approximately 150 employees, a product portfolio with 6
orthobiology products on the market and 9 in development, pro-forma
product sales of US$ 23 million in 2002, and is traded under the
symbol "ISON" on both the Official Market Segment of Euronext
Amsterdam, and the Main Board of the Swiss Exchange. For
information contact: Hans Herklots Louis G. Plourde Media &
investor relations Investor/shareholder relations Tel: +31(0)30 229
5271 Tel: + (800) 561-2955 (North America) Fax: +31(0)30 228 0255
E-mail: E-mail: Website: http://www.isotis.com/ (Certain statements
in this Press Release are "forward-looking statements", including
those that refer to management's plans and expectations for future
operations, prospects and financial condition. One can identify
these forward-looking statements by use of words such as
'strategy,' 'expects,' 'plans,' 'anticipates,' 'believes,' 'will,'
'continues,' 'estimates,' 'intends,' 'projects,' 'goals,' 'targets'
and other words of similar meaning. One can also identify them by
the fact that they do not relate strictly to historical or current
facts. Such statements are based on the current expectations of the
management of IsoTis S.A. and GenSci only. Reliance should not be
placed on these statements because, by their nature, they are
subject to known and unknown risks and can be affected by factors
that are beyond the control of IsoTis/GenSci. Actual results could
differ materially from current expectations due to a number of risk
factors and uncertainties, including but not limited to the timely
commencement and success of IsoTis' and GenSci's clinical trials
and research endeavors, delays in receiving U.S. FDA or other
regulatory approvals (a.o. EMEA, CE), market acceptance of the
combined Company's' products, development of competing therapies
and/or technologies, the terms of any future strategic alliances,
the need for additional capital, the inability to obtain, or meet
conditions imposed for the required governmental and regulatory
approvals and consents, the risk that implementing the merger may
not provide all or any of the benefits projected, as it will place
significant demands on our management. For a more detailed
description of the risk factors and uncertainties affecting IsoTis,
refer to the Joint Information Circular and to IsoTis' reports
filed from time to time with the Swiss Stock Exchange, SWX,
Euronext Amsterdam N.V. For a more detailed description of the risk
factors and uncertainties affecting GenSci, refer to the Joint
Information Circular and to GenSci's reports filed from time to
time with the Canadian securities regulators, available at
http://www.sedar.com/. IsoTis and GenSci are not obligated to
update or revise any forward-looking statements, whether as a
result of new information or otherwise. This communication shall
not constitute an offer to sell or the solicitation of an offer to
buy securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of such jurisdiction.) ANNEX NOTICE TO GENSCI
SHAREHOLDERS The merger has been effected by way of a Plan of
Arrangement under the Company Act (British Columbia). In accordance
with the Plan, the directors of GenSci Regeneration Sciences Inc.
have fixed the initial share exchange ratio (the portion of an
IsoTis Share to be exchanged for each GenSci share) at a minimum of
0.46 of an IsoTis Share for each GenSci Share. Later this week, on
October 31, the GenSci board will make a final determination of
GenSci's tax and other liabilities resulting from the plan of
arrangement, at which time the final share exchange ratio will be
determined. In no event will the share exchange ratio be less than
0.46 of an IsoTis Share for each GenSci share. The issuance of new
IsoTis Shares is subject to formal registration of the shares in
Switzerland, which is expected to be completed on October 30, 2003,
barring any unforeseen circumstances. CORPORATE FACTSHEET
Orthobiologics Defined: Orthobiologics combines advances in
biotechnology, materials sciences and tissue biology to promote and
enhance the body's natural ability to regenerate and repair
musculoskeletal tissue. Corporate Overview ISOTIS Orthobiologics
was created as a result of the merger between Swiss-Dutch
biomedical company ISOTIS S.A., and US-based GenSci Orthobiologics,
of Irvine, California. With expected 2003 revenues slightly
exceeding the US$23 million pro-forma for 2002, more than US$50
million cash by the end of 2003, and highly complementary product
and technology platforms, the new company is set to become a
significant global force in orthobiologics, the fastest growing
segment of the US$16 billion orthopedics market. The combined
entity expects to sustain continued long-term growth in revenues
through immediate development of its innovative orthobiologics
pipeline. The companies have already identified a variety of
ongoing product development programs that have the potential to
lead to breakthrough products in musculoskeletal repair. Recent
Developments The just-completed merger transaction and the months
leading to its completion have provided both companies an
opportunity to restructure, sharpen our focus, dramatically reduce
operating expenses and divest or out-license non-core research
programs, with a view to achieving rapid top line revenue growth
and profitability while securing a downstream interest in non-core
technology product development programs. * 10/03: ISOTIS and
University of Twente Establish World Class Orthobiologics Research
Group * 08/03: ISOTIS signs worldwide exclusive licensing agreement
for Allox, its lead cell-based product treatment of chronic skin
wounds with Healthpoint Inc. (USA) The Orthobiologics Market Bone
graft substitutes, processed allograft products, and genetically
engineered bone growth factors have significant future potential
within orthopaedics. In line with trends in all of the major
orthopaedic market segments, demographics will be the biggest
driver increasing both value and volume of the bone graft
substitutes market. As the global population continues to age, and
the average level of physical activity grows, the number of
orthopaedic procedures which require the use of bone grafts and
substitutes will continue to increase. Further, minimally invasive
procedures will encourage a greater percentage of the population to
seek treatment. Principal Applications for Products Spinal Fusion
Degenerative disc disease, characterized by a progressive
compression of the intervertebral discs, afflicts nearly half the
US population between forty and sixty years of age and
approximately 90 percent of Americans older than sixty. Trauma Over
500,000 orthopaedic fractures occurring annually in the US
eventually progress to delayed union or nonunion fractures. Among
fractures not resulting from osteoporosis, sports injuries,
automobile and heavy machinery accidents are the main culprits.
Joint Revision Hip, knee, shoulder, and small joint replacements
are common orthopaedic procedures designed to replace the function
of joints, most often necessary due to advanced osteoarthritis.
Bone Void Filling, Iliac Crest Backfills When a tumor is removed,
or another type of bone void exists, bone graft or a bone
substitute will usually be utilized to replace lost volume and
provide an osteoconductive material to encourage bone growth.
Craniomaxillofacial Surgery Grafting and bone substitutes are used
in conjunction with craniomaxillofacial reconstruction and repairs.
Oral and Periodontal Repair Oral and periodontal repairs usually
require the use of a bone graft, filler or substitute and may be
performed by oral surgeons, periodontists, and general dentists.
Existing Product Platforms GenSci OrthoBiologics is recognized as a
significant participant in the North American bone graft
substitutes market. Its OrthoBlast(R) II, DynaGraft(R) II, and
Accell(R) DBM 100 product lines are well-recognized and accepted in
the orthopaedic community. ISOTIS contributes its innovative
synthetic bone graft substitute OsSatura(TM), its family of other
small medical devices, and its promising PolyActive(TM) BCP
program, which constitutes a potential breakthrough in the
treatment of osteochondral defects. In the first half year of 2003,
OsSatura(TM) received both the CE mark (on the claim of
osteoconductivity and osteoinductivity) and FDA 510(k) approval (on
the claim of osteoconductivity) in quick succession. Business
Strategy & Key Forward Market Drivers ISOTIS Orthobiologics
becomes a company with immediate and substantial critical mass in
the fast growing field of orthobiologics. Its goal, based on sales
growth and improving margins, is to enter the top tier of the
global orthobiology industry. Management identified the following
drivers for growing sales and improving margins: Leverage existing
US distribution channel ISOTIS intends to fully support independent
distributors and their 400 dedicated sales reps with the potential
for substantially increased sales to their existing customer base
by: * offering a combined "natural" and "synthetic" product mix,
initially consisting of OrthoBlast(R) II, Dynagraft(R) II,
Accell(R) DBM 100 and OsSatura(TM); * aggressive R&D
initiatives to develop and obtain timely approvals for a series of
superior new products; * having the means for a pointed ISOTIS
OrthoBiologics corporate marketing campaign; * providing solid
product marketing, sound scientific and clinical data to support
product claims. Accelerate European and other international sales
The breadth of the new ISOTIS' combined product platforms and an
established European production sales and marketing infrastructure
provides an opportunity to rapidly ramp up European and
international sales and establish a stronghold in what remains a
highly fragmented, underdeveloped marketplace. Combined new product
development The merger has brought together GenSci's expertise in
natural bone (demineralized bone matrix) and carrier technologies
with ISOTIS' expertise in synthetic bone graft substitutes.
Combining natural and synthetic technology platforms will enable
the Combination to obtain approval for a number of new, superior
bone graft substitute products in the course of 2004 and 2005, and
launch these products through the existing distribution channels.
By 2006, the Combination expects to obtain regulatory approval for
its potential breakthrough solution for osteochondral defects,
PolyActive(TM) BCP. Exclusive focus on orthobiology and applying a
strict medical device product development approach will ensure a
clearer regulatory pathway. Management Jacques R. Essinger, Ph D,
Chief Executive Officer Pieter Wolters, Chief Financial Officer
John F. Kay, Ph D, Chief Scientific Officer Jim Hogan, President,
EMEA/Asia Pacific Board of Directors of ISOTIS OrthoBiologics James
S. Trotman, Chairman Aart Brouwer, Vice-Chairman Patrick Aebischer
Darrell Elliott Jacques Essinger Henjo Hielkema Daniel Kollin
Corporate Headquarters: 18-20, Avenue de Sevelin 1004 Lausanne,
Switzerland Phone: +41 21 620 60 00 Fax: +41 21 620 60 60
http://www.isotis.com/ European Operations: Prof. Bronkhorstlaan
10-D 3723 MB Bilthoven, The Netherlands PO Box 98, 3720 AB
Bilthoven, The Netherlands Phone: +31 30 229 5 229 Fax: +31 30 228
0 255 North American Operations: 2, Goodyear Irvine, CA 92618
Phone: 949 595 8710 Fax: 949 595 8711 Website:
http://www.isotis.com DATASOURCE: IsoTis CONTACT: Hans Herklots,
media & investor relations, +31(0)30-229-5271, fax,
+31(0)30-228-0255, , or Louis G. Plourde, investor/shareholder
relations, +1-800-561-2955 (North America),
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