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Press Release

Ecopia announces agreement with caprion to combine their businesses and launch a $30 million private placement


Montreal, January 4, 2007 - Ecopia BioSciences Inc. (TSX: EIA) ("Ecopia") and Caprion Pharmaceuticals Inc. ("Caprion") have announced earlier today that they have entered into a combination agreement whereby they have agreed, subject to certain conditions, to combine their respective businesses through a plan of arrangement pursuant to which Ecopia and Caprion will amalgamate to form a new company with a strategic objective to create a leading oncology and infectious disease company.  The amalgamated company will have a portfolio of three active clinical therapeutic programs in advanced stages of development in cancer and infectious disease on a rapid path to commercialization and a sustainable pipeline of new opportunities.

Shareholders of Caprion will receive 69,871,584 common shares of the amalgamated company representing 50% of the amalgamated company's total outstanding common shares following the closing of the proposed transaction, which is subject to the completion of a financing.  Desjardins Securities Inc. and Dundee Securities Inc. have been engaged to act as co-lead agents in connection with a proposed issuance of units of the amalgamated company by way of private placement on a best efforts basis for gross proceeds of at least $30 million.

Picchio Pharma Inc., a joint venture healthcare investment firm owned by FMRC Family Trust (a trust of which Dr. Francesco Bellini is a beneficiary), and Power Technology Investment Corporation, a subsidiary of Power Corporation of Canada, has placed a lead order of $4 million in the proposed financing.  It is contemplated that each unit will be issued at a price of $0.25, which has been determined based on the market price of the common shares of Ecopia during the negotiations relating to the private placement. Each unit will entitle its holder to acquire from the amalgamated company one common share and one-half of a warrant, each whole warrant entitling its holder to purchase one common share of the amalgamated company at a price of $0.375 for a period of 36 months.

"The combination is a bold move to create an integrated biotechnology company with scale, critical mass and diversified, later-stage clinical products. We are delighted to have received the support of a lead investor such as Picchio Pharma for this vision" said Lloyd M. Segal, currently president and chief executive officer of Caprion who will be chief executive officer of the amalgamated company.

"This merger and financing will create a strong entity with a balanced product pipeline focused in infectious disease and cancer as well as a strong balance sheet to continue the development of our three clinical products" said Pierre Falardeau, currently president and chief executive officer of Ecopia who will be chief operating officer of the amalgamated company.

The combination agreement contemplates that the amalgamated company will sell Caprion's CellCarta proteomics business unit within the first 12 months following closing, so as to focus on exclusively pharmaceutical product development.  The agreement also provides that the current shareholders of Caprion will be entitled, subject to certain conditions, to certain payments in connection with any sale of CellCarta.

The amalgamated company will have a nine member board of directors. It will be composed of two members designated by Ecopia, two members designated by Caprion, one member designated by Picchio Pharma, three new independent members and the chief executive officer of the amalgamated company as representative of management on the board of directors.

Under the proposed terms of the transaction, all outstanding and unexercised options and warrants to acquire common shares of Ecopia will, on closing, be exchanged (on a one for one basis) for options and warrants to acquire common shares of the amalgamated company, and all outstanding and unexercised options and warrants to acquire common shares of Caprion will, on closing, be cancelled, except for certain warrants held by a third party which will be exchanged for warrants to purchase an aggregate of 5,300,000 common shares of the amalgamated company at a price of $0.375 per share for a prescribed period.

Conditions Precedent and Required Approvals

Completion of the proposed transaction is subject to the fulfillment or waiver of various conditions precedent as more particularly set forth in the combination agreement, including the receipt of all required third party consents and all required regulatory, court and shareholder approvals.

A 66% majority of the holders of common shares of Caprion and a 66% majority of the holders of Class A preferred shares of Caprion, voting separately as classes at a special meeting of the shareholders of Caprion to be called to approve the proposed transaction, will be required.

A 66% majority of the holders of common shares of Ecopia voting at a special meeting of the shareholders of Ecopia to be called to approve the proposed transaction, will be required.

Caprion will, as soon as practicable, apply under Section 192 of the Canada Business Corporations Act for an interim order from the Québec Superior Court in order, among other things, to be able to convene the special meetings of the shareholders of each of Ecopia and Caprion expected to take place by March 2007.

The plan of arrangement will also have to be approved by a final order of the Québec Superior Court.

Board Recommendation

The board of directors of Ecopia (i) has determined unanimously that the proposed transaction is in the best interests of Ecopia and is fair to all of its shareholders (ii) has received a written fairness opinion from its financial advisors, Desjardins Securities Inc., to the effect that the consideration to be provided by Ecopia in the proposed transaction is fair from a financial point of view to Ecopia's shareholders and (iii) will recommend in its circular to be delivered to its shareholders that such holders vote in favour of the proposed transaction.

The board of directors of Caprion (i) has determined unanimously that the proposed transaction is in the best interests of the company and is fair to all of its shareholders and (ii) will recommend in its circular to be delivered to its shareholders that such holders vote in favour of the proposed transaction.

Conduct of Business Pending Completion of the Proposed Transaction

Each of Ecopia and Caprion has agreed in the combination agreement that, other than in connection with certain permitted matters, until the proposed transaction is completed, it shall conduct its business only in, and shall not take any action except in, the ordinary course of business.

Non-Solicitation, Superior Proposal and Termination Fee

Subject to certain exceptions, each of Ecopia and Caprion has agreed in the combination agreement that it will not solicit offers by any third parties to effect a business combination with any third party, and as to procedures regarding any superior proposals.  The combination agreement also specifies the terms and conditions under which the combination agreement may be terminated, as well as for the payment of a Cdn. $250,000 termination fee to either party in the event the proposed transaction is not completed under certain circumstances set out in the combination agreement.

Advisors and Counsel

Ecopia's financial advisor is Desjardins Securities Inc. and its legal counsel is McCarthy Tétrault LLP. Caprion's financial advisor is Orion Securities Inc. and its legal counsel is Stikeman Elliott LLP. Osler, Hoskin & Harcourt LLP is acting as counsel to the agents in connection with the private placement.

About Ecopia

Ecopia is finding novel anticancer therapies from soil-dwelling microorganisms that are one of the most prolific sources of drugs. Our current focus is to move our flagship compound ECO-4601 through Phase I clinical trials. ECO-4601 is a novel small molecule that, based on advanced animal models, crosses the blood brain barrier and is effective in significantly inhibiting primary brain tumor growth and other types of cancers. Just like well-known chemotherapies such as doxorubicin and mitomycin C, ECO-4601 comes from microorganisms that live in common soil. However, unlike these drugs that were discovered many decades ago, ECO-4601 represents a new chemical class that is derived from Ecopia's proprietary drug discovery platform Decipher®. The common shares of Ecopia are listed on the TSX (symbol: EIA).

Additional information about the Company can be obtained from Ecopia's website at

About Caprion

Caprion Pharmaceuticals Inc. is a clinical-stage biotechnology company developing pharmaceutical products in the areas of infectious disease and oncology. The Company's clinical-stage programs include Shigamabs®, a product for the treatment of Shigatoxin-producing E. coli bacterial infections, and CAP-232, a targeted therapy with potential efficacy in multiple oncology indications. CellCarta®, Caprion's proprietary proteomics technology, provides Caprion with an effective means to identify novel drug targets, predict which therapeutics may be safer and more efficacious, and identify which patients may benefit most from a particular therapy.

Additional information about Caprion can be obtained from Caprion's website at

Forward-Looking Statements

Certain statements in this press release that do not relate exclusively to historical facts are forward-looking statements. These statements relate to future events or the Company's future performance. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "targeting", "intend", "could", "might", "continue", or the negative of these terms or other comparable terminology. These statements are only predictions. In addition, this press release may contain forward-looking statements attributed to third party industry sources. Undue reliance should not be placed on these forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By its nature, forward-looking information involves numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur and may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Forward-looking statements in this press release speak only as of the date of this press release and include, but are not limited to, statements with respect to (i) the potential combination of Ecopia and Caprion, (ii) the potential private placement of securities of the amalgamated company, (iii) the ability to raise future capital to fund the Corporation's research and development activities; (iv) success and timely completion of clinical studies; (v) the pursuit of clinical trials in the United States; (vi) the potential of ECO-4601 as a chemotherapy against primary brain cancer; (vii) the potential of ECO-4601 in the treatment of breast, prostate, colon, lung and ovarian cancers; (viii) the identification of a second generation ECO-4601 compound; (ix) the identification of a non-ECO-4601 related compound as a candidate for another regulatory filing; (x) the grant by the United States Patent and Trademark Office of a patent directed to ECO-4601 based on the Corporation's notice of allowance; and (xi) the earning of revenues from the exercise of exclusivity options on out-licensed patent properties may rely on a number of assumptions concerning future events and are therefore subject to a number of risks and uncertainties, many of which are outside Ecopia's control. Actual results may therefore vary materially from the expectations expressed by the Corporation and depend on a number of factors. These factors include, but are not limited to: (i) the possibility of not satisfying all closing conditions to complete the combination of Ecopia and Caprion, (ii) the ability of Ecopia of raising sufficient capital for purposes of the proposed private placement, (iii) risks related to the integration of acquisitions, (iv) the possibility of delays in approval of patients in Phase I trial; (v) scientific uncertainties relating to the correlation between preclinical animal data and human clinical data; (vi) the safety and efficacy of ECO-4601 as a cancer treatment; (vii) timely progress and completion of Phase I study; (viii) withdrawal of a notice of allowance by the United States Patent and Trademark Office; (ix) uncertainties related to the regulatory process for drug development; (x) the ability for the Corporation to fund its future operations in light of the lack of operating revenues for the years to come;(xi) and the impact of general economic conditions. A more complete discussion of the risks and uncertainties facing the Corporation appears in Ecopia's 2005 Annual Report under Management's Discussion and Analysis of Financial Position and Results of Operations for fiscal 2005 and the 2005 Annual Information Form available at Except as required by law, Ecopia does not undertake and disclaims any obligation to update or revise its forward-looking statements or forward-looking information whether as a result of new information, future events, or otherwise.

For further information

Anne Marie Guertin, CA
Vice President Finance
Ecopia BioSciences Inc.
7290 Frederick-Banting
Saint-Laurent, Québec  H4S 2A1
Telephone: (514) 336-2700
Fax: (514) 336-8827

Michael Singer, CGA
Vice President, Chief Financial Officer
Caprion Pharmaceuticals Inc.
7150 Alexander-Fleming
Montréal, Québec  H4S 2C8
Direct Tel: 514-940-3610
Fax: 514-336-2343

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