LORUS
THERAPEUTICS INC.
Material
Change Report
Section
75(2) of the Securities Act (Ontario)
Section
85(1)(b) of the Securities Act (British Columbia)
Section
146(1)(b) of the Securities Act (Alberta)
Section
84(1)(b) of The Securities Act, 1988 (Saskatchewan)
Section
81(2) of the Securities Act (Nova Scotia)
Section
76(2) of the Securities Act (Newfoundland)
1.
Reporting Issuer
Lorus
Therapeutics Inc.
2
Meridian Road
Toronto,
Ontario
M9W
4Z7
2.
Date of Material Change
January
16, 2006
3.
Press Release
The
press release prescribed by section 75(1) of the Securities Act
(Ontario) (and attached
hereto)
was issued at Toronto on January 16, 2006.
4.
Summary of Material Change
Lorus
Therapeutics Inc. (“Lorus”) announced it had signed a term sheet in respect of a
tax assisted financing which, if completed, will raise net cash proceeds
of
$21.6 million before transaction costs. In addition, Lorus has
reached an agreement with the holder of its $15 million convertible secured
debentures (the “Debentures”) The Erin Mills Investment Corporation, subject to
the successful completion of the tax assisted financing transaction, to repay
the Debentures prior to maturity.
5.
Full Description of Material Change
Please
see attached press release.
6.
Reliance on Confidentiality Provisions of Securities
Legislation
Not
applicable.
7.
Omitted Information
No
significant facts remain confidential in, and no information has been omitted
from, this report.
8.
Senior Officers
For
further information please contact
Jim
A. Wright,
President
and C.E.O., at (416) 798-1200 (ext. 340).
9.
Statement of Senior Officer
The
foregoing accurately discloses the material change referred to
herein.
DATED
at Toronto, Ontario, this 25th day of
January
2006.
By:
“Jim A. Wright”
Jim
A. Wright
President
and C.E.O.
Lorus
Therapeutics. Inc.
Contacts:
Lorus
Therapeutics Inc.
|
Media
Contacts
|
US
Investor Relations
|
Grace
Tse
|
Susana
Hsu / Emily Brunner
|
Tim
Clemensen
|
Corporate
Communications
|
Mansfield
Communications
|
Rubenstein
& Co.
|
Tel:
(416) 798-1200 ext. 380
|
(416)
599-0024 / (212) 370-5045
|
(212)
843-9337
|
Email: ir@lorusthera.com
|
susana@mcipr.com
/ emily@mcipr.com
|
tim@rir1.com
|
LORUS
ANNOUNCES $21.6 MILLION TAX ASSISTED FINANCING AND REPAYMENT OF CONVERTIBLE
DEBENTURES
TORONTO,
CANADA, January 16, 2006 - Lorus Therapeutics Inc. (Lorus), a
biopharmaceutical company specializing in the development and commercialization
of pharmaceutical products and technologies for the management of cancer,
announced that it has signed a term sheet in respect of a tax assisted financing
which, if completed, will raise net cash proceeds of $21.6 million before
transaction costs. The tax assisted financing is managed by
Biotechnology Management Corporation (the “Manager”). The completion
of the transaction is subject to a number of conditions precedent, including
regulatory and corporate approvals and the completion of legal documentation
satisfactory to the parties, and is expected to close on or before February
15,
2006.
Pursuant
to the transaction, Lorus intends to licence certain patents relating to
product
candidates, Virulizin®, GTI-2040
and
GTI-2501 (the “Technology”) in designated countries as part of a transfer of
Technology businesses (the “Business”) to a limited partnership, PHBLP XLIV
Limited Partnership (the “Operating Partnership”). The Operating
Partnership will commercialize the Business pursuant to the patent licence
and
Lorus (or a wholly-owned subsidiary of Lorus) as General Partner will manage
the
Operating Partnership after closing. Lorus will subscribe for Class B
Units of the Operating Partnership and JBX Limited Partnership (“JBX”) will
subscribe for Class A Units of the Operating Partnership. Lorus
understands that the sole limited partner of JBX will be The Erin Mills
Development Corporation. The Operating Partnership will continue to
have the ability to sub-license the Technology to any potential partners
with
the potential to become a licence with Lorus when Lorus re-acquires the
Business.
Between
November 15, 2007 and June 30, 2009, Lorus will have the right to, and intends
to, re-acquire the Business at its fair market value by purchasing all of
the
issued and outstanding Class A
Units
of the Operating Partnership in consideration of, among other things, the
issuance of between 25,846,000 and 32,308,500 common shares of
Lorus. In connection with its participation in this transaction,
Lorus will issue 10 million warrants to the Manager to acquire common shares
of
Lorus at an exercise price of $0.45 per common share.
In
addition, Lorus has reached an agreement with the holder of its $15 million
convertible secured debentures (the “Debentures”) The Erin Mills Investment
Corporation (“TEMIC”), subject to the successful completion of the tax assisted
financing transaction, to repay the Debentures prior to maturity. In
consideration of the early repayment of the Debentures, TEMIC has agreed
to
cancel the warrants exercisable at $1.00 per common share that were originally
issued upon entering into the Debentures in October 2004.
“This
transaction will improve the financial position of Lorus both by eliminating
our
currently outstanding $15 million in convertible debentures, as well as the
monthly interest costs of approximately $75,000 and the corresponding monthly
issuance of approximately 250,0000 common shares to pay the
interest. It will also provide Lorus with significant additional
funds to use towards the advancement of our small molecule and antisense
drug
development programs.” said Dr. Jim Wright, President and C.E.O. “Lorus
continues to focus on forming partnerships for drugs under clinical development,
primarily, its proprietary antisense products, as well as Virulizin®.”
About
Lorus
Lorus
is a
biopharmaceutical company focused on the development and commercialization
of
cancer therapies. Lorus' goal is to capitalize on its research, preclinical,
clinical and regulatory expertise by developing new drug candidates that
can be
used, either alone, or in combination, to successfully manage cancer. Through
its own discovery efforts and an acquisition and in-licensing program, Lorus
is
building a portfolio of promising anticancer drugs. Late-stage clinical
development and marketing may be done in cooperation with strategic
pharmaceutical partners. Lorus currently has products in human clinical trials
with a pipeline of eight clinical trials in Phase II clinical trial programs
and
recently has completed a Phase III registration clinical program. Lorus
Therapeutics Inc. is a public company listed on the Toronto Stock Exchange
under
the symbol LOR, and on the American Stock Exchange under the symbol LRP.
Virulizinâ
is a registered trademark of Lorus Therapeutics Inc.
Forward
Looking Statements
Except
for
historical information, this press release contains forward-looking statements,
which reflect the Company's current expectation and assumptions, and are
subject
to a number of risks and uncertainties that could cause actual results to
differ
materially from those anticipated. These forward-looking statements involve
risks and uncertainties, including, but not limited to, changing market
conditions, the Company's ability to obtain patent protection and protect
its
intellectual property rights, commercialization limitations imposed by
intellectual property rights owned or controlled by third parties, intellectual
property liability rights and liability claims asserted against the Company,
the
successful and timely completion of clinical studies, the establishment of
corporate alliances, the impact of competitive products and pricing, new
product
development, uncertainties related to the regulatory approval process, product
development delays, the Company's ability to attract and retain business
partners and key personnel, future levels of government funding, the Company's
ability to obtain the capital required for research, operations and marketing
and other risks detailed from time-to-time in the Company's ongoing quarterly
filings, annual information forms, annual reports and 40-F filings. We undertake
no obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or
otherwise. Lorus Therapeutics Inc.'s press releases are available
through the Company's Internet site: http://www.lorusthera.com/.