Filed by Endorex Corporation pursuant to Rule 425 of the Securities Act of 1933,
as amended, and deemed to be filed pursuant to Rule 14a-12 of the Securities
Exchange act of 1934, as amended.
Subject: Corporate Technology Development, Inc.
Commission File No. 1-14778
THIS QUESTIONS AND ANSWERS MATERIAL CONTAINS "FORWARD LOOKING STATEMENTS" AS
DEFINED IN THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 REGARDING
ENDOREX CORPORATION'S ("ENDOREX"), CORPORATE TECHNOLOGY DEVELOPMENT, INC.'S
("CTD") AND THE COMBINED COMPANIES' PLANS, EXPECTATIONS, INTENTIONS AND
STRATEGIES REGARDING THE FUTURE. THESE STATEMENTS INCLUDE "FORWARD LOOKING
STATEMENTS" ABOUT ENDOREX'S, CTD'S AND THE COMBINED COMPANIES' PRODUCTS, PRODUCT
DEVELOPMENT AND PRODUCT PIPELINE AND ENDOREX'S CURRENT OPERATIONS, PRODUCTS,
BUSINESS, JOINT VENTURES AND CORPORATE PARTNERSHIPS. ALL FORWARD-LOOKING
STATEMENTS INCLUDED IN THIS RELEASE ARE BASED UPON INFORMATION AVAILABLE TO
ENDOREX AND CTD AS OF THE DATE OF THIS MATERIAL, AND NEITHER ENDOREX, CTD NOR
THE COMBINED COMPANIES ASSUME ANY OBLIGATION TO UPDATE ANY SUCH FORWARD-LOOKING
STATEMENTS. THESE STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE OR RESULTS
AND ACTUAL RESULTS COULD DIFFER MATERIALLY FROM CURRENT EXPECTATIONS. FACTORS
THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT LIMITED
TO, PRODUCT INTEGRATION RISK, THE POSSIBILITY THAT THE OPERATIONS AND MANAGEMENT
OF ENDOREX AND CTD WILL NOT BE SUCCESSFULLY INTEGRATED, THE POSSIBILITY THAT THE
TRANSACTIONS DESCRIBED HEREIN MIGHT NOT BE CONSUMMATED, THE EFFECTS OF THE
PUBLIC ANNOUNCEMENT ON ENDOREX'S STOCK PRICE AND THE PROGRESS OF CERTAIN DRUG
DEVELOPMENT PROJECTS AND THAT BENEFITS SOUGHT TO BE ACHIEVED BY THE TRANSACTION
WILL NOT BE ACHIEVED. FURTHERMORE, ENDOREX, CTD AND THE COMBINED COMPANIES
CANNOT ASSURE YOU THAT THEY WILL BE ABLE TO SUCCESSFULLY DEVELOP OR
COMMERCIALIZE PRODUCTS BASED ON THEIR TECHNOLOGY, PARTICULARLY IN LIGHT OF THE
SIGNIFICANT UNCERTAINTY INHERENT IN DEVELOPING DRUG AND DRUG DELIVERY PRODUCTS,
CONDUCTING CLINICAL TRIALS AND OBTAINING REGULATORY APPROVALS, THAT THEIR
TECHNOLOGIES WILL PROVE TO BE SAFE AND EFFECTIVE, THAT THEIR CASH EXPENDITURES
WILL BE AT PROJECTED LEVELS, THAT THEY WILL HAVE SUFFICIENT CASH TO DEVELOP OR
COMMERCIALIZE PRODUCTS, THAT PRODUCT DEVELOPMENT AND COMMERCIALIZATION EFFORTS
WILL NOT BE REDUCED OR DISCONTINUED DUE TO DIFFICULTIES OR DELAYS IN CLINICAL
TRIALS OR DUE TO LACK OF PROGRESS OR POSITIVE RESULTS FROM RESEARCH AND
DEVELOPMENT EFFORTS, THAT THEY WILL BE ABLE TO SUCCESSFULLY PATENT, REGISTER OR
PROTECT THEIR TECHNOLOGY, TRADEMARKS AND PRODUCTS, OR THAT THE BUSINESS
STRATEGIES OF ENDOREX, CTD OR THE COMBINED COMPANIES WILL BE SUCCESSFUL. ENDOREX
CANNOT ASSURE YOU THAT IT OR ITS JOINT VENTURES OR ITS COLLABORATIONS WITH OTHER
COMPANIES IN THE U.S. AND ABROAD WILL SUCCESSFULLY DEVELOP PRODUCTS OR BECOME
PROFITABLE, THAT ITS JOINT VENTURES OR ITS COLLABORATIONS WITH OTHER COMPANIES
WILL CONTINUE, THAT ITS BUSINESS STRATEGY WILL BE SUCCESSFUL OR THAT IT WILL BE
ABLE TO CARRY OUT OUR PLANS FOR 2001 AND BEYOND. IN ADDITION TO THE MATTERS
DESCRIBED IN THIS PRESS RELEASE, RISK FACTORS AS DESCRIBED FROM TIME TO TIME IN
ENDOREX'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING, BUT
NOT LIMITED TO, ENDOREX'S MOST RECENT REPORTS ON FORM 10-QSB, FORM 10-KSB, AS
AMENDED, AND ENDOREX'S REGISTRATION STATEMENT ON FORM S-3, AS AMENDED, MAY
AFFECT ENDOREX'S FINANCIAL RESULTS.
ADDITIONAL INFORMATION AND WHERE TO FIND IT: IT IS EXPECTED THAT ENDOREX WILL
FILE A REGISTRATION STATEMENT ON SEC FORM S-4 AND ENDOREX AND CTD WILL FILE A
JOINT PROXY STATEMENT/PROSPECTUS WITH THE SEC IN CONNECTION WITH THE
TRANSACTION, AND THAT ENDOREX AND CTD WILL MAIL A JOINT PROXY
STATEMENT/PROSPECTUS TO STOCKHOLDERS OF ENDOREX AND CTD CONTAINING INFORMATION
ABOUT THE TRANSACTION. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE
REGISTRATION STATEMENT AND THE JOINT PROXY STATEMENT/PROSPECTUS CAREFULLY WHEN
THEY ARE AVAILABLE. THE REGISTRATION STATEMENT AND THE JOINT PROXY
STATEMENT/PROSPECTUS WILL CONTAIN IMPORTANT INFORMATION ABOUT ENDOREX, CTD, THE
TRANSACTION, THE PERSONS SOLICITING PROXIES RELATING TO THE TRANSACTION, THEIR
INTERESTS IN THE TRANSACTION AND RELATED MATTERS. INVESTORS AND SECURITY HOLDERS
WILL BE ABLE TO OBTAIN FREE COPIES OF THESE DOCUMENTS THROUGH THE WEBSITE
MAINTAINED BY THE SEC AT HTTP://WWW.SEC.GOV. FREE COPIES OF THE JOINT PROXY
STATEMENT/PROSPECTUS AND THESE OTHER DOCUMENTS MAY ALSO BE OBTAINED FROM ENDOREX
BY DIRECTING A REQUEST BY MAIL TO ENDOREX AT 28101 BALLARD DRIVE, SUITE F, LAKE
FOREST, IL 60045-4544, TELEPHONE (847) 573-8990, OR FROM CTD BY DIRECTING A
REQUEST BY MAIL TO CTD AT 1680 MICHIGAN AVENUE, SUITE 700, MIAMI, FLORIDA 33139,
TELEPHONE 305-777-2258.
IN ADDITION TO THE REGISTRATION STATEMENT AND THE JOINT PROXY
STATEMENT/PROSPECTUS, ENDOREX FILES ANNUAL, QUARTERLY AND SPECIAL REPORTS, PROXY
STATEMENTS AND OTHER INFORMATION WITH THE SEC. YOU MAY READ AND COPY ANY
REPORTS, STATEMENTS OR OTHER INFORMATION FILED BY ENDOREX AT THE SEC PUBLIC
REFERENCE ROOMS AT 450 FIFTH STREET, N.W., WASHINGTON, D.C. 20549 OR AT ANY OF
THE SEC'S OTHER PUBLIC REFERENCE ROOMS IN NEW YORK, NEW YORK AND CHICAGO,
ILLINOIS. PLEASE CALL THE SEC AT 1-800-SEC-0330 FOR FURTHER INFORMATION ON THE
PUBLIC REFERENCE ROOMS.
ENDOREX'S FILINGS WITH THE SEC ARE ALSO AVAILABLE TO THE PUBLIC FROM COMMERCIAL
DOCUMENT-RETRIEVAL SERVICES AND AT THE WEBSITE MAINTAINED BY THE SEC AT
HTTP://WWW.SEC.GOV.
ENDOREX, CTD, DIRECTORS AND CERTAIN EXECUTIVE OFFICERS OF ENDOREX AND CTD,
PARAMOUNT CAPITAL, INC. AND CERTAIN AFFILIATES AND EMPLOYEES OF PARAMOUNT
CAPITAL, INC., MAY BE CONSIDERED PARTICIPANTS IN THE SOLICITATION OF PROXIES IN
CONNECTION WITH THE MERGER. CERTAIN DIRECTORS AND EXECUTIVE OFFICERS MAY HAVE
DIRECT OR INDIRECT INTERESTS IN THE MERGER DUE TO SECURITIES HOLDINGS OF ENDOREX
AND CTD AND RIGHTS TO BONUS PAYMENTS FOLLOWING THE MERGER. PARAMOUNT CAPITAL,
INC. AND CERTAIN AFFILIATES AND EMPLOYEES OF PARAMOUNT CAPITAL, INC. MAY BE PAID
TO SOLICIT PROXIES IN CONNECTION WITH THE MERGER AND MAY HAVE DIRECT OR INDIRECT
INTERESTS IN THE MERGER DUE TO THEIR SECURITIES HOLDINGS OF ENDOREX AND CTD. IN
ADDITION, CERTAIN DIRECTORS AND OFFICERS, AFTER THE MERGER, WILL BE INDEMNIFIED
BY ENDOREX AND WILL BENEFIT FROM INSURANCE COVERAGE FOR LIABILITIES THAT MAY
ARISE FROM THEIR SERVICE AS DIRECTORS AND OFFICERS OF CTD PRIOR TO THE MERGER.
ADDITIONAL INFORMATION REGARDING THE PARTICIPANTS IN THE SOLICITATION WILL BE
CONTAINED IN THE JOINT PROXY STATEMENT/PROSPECTUS TO BE FILED BY ENDOREX AND CTD
WITH THE SEC.
ENDOREX CORPORATION, A DELAWARE CORPORATION, DISTRIBUTED THE FOLLOWING QUESTIONS
AND ANSWERS MATERIAL INTERNALLY TO ITS EMPLOYEES:
CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL
ENDOREX ACQUIRES CORPORATE TECHNOLOGY DEVELOPMENT, INC.
QUESTIONS AND ANSWERS FOR INTERNAL PURPOSES ONLY:
CATEGORIES:
- Terms of the agreement
- Time frame
- Pros/Cons
- Structure of new company (including management team)
- Current agreements with Elan, Schein (now Watson), etc
- Managing new portfolio of drugs
TERMS OF THE AGREEMENT
Q. WHAT ARE THE TERMS OF THE AGREEMENT?
A. Under the terms of the merger agreement, each share of CTD common stock
will convert into the right to receive approximately .271443 of a share of
Endorex common stock and each share of CTD Series A Preferred stock will convert
into the right to receive approximately 1.008466 of a share of Endorex common
stock. Endorex will issue approximately 9.4 million shares of common stock at
the closing of the merger and will reserve approximately .6 million shares of
common stock for issues upon exercise of CTD options and warrants assumed by
Endorex.
Q. WHAT PRICE WILL ENDOREX BE PAYING FOR CTD?
A. 10 million shares times the stock price of Endorex at the close of trading
on the day of announcing the merger.
Q. HOW WILL ENDOREX'S BALANCE SHEET BE AFFECTED?
A. As of June 30, 2000, CTD had approximately $5 million in cash assets and no
short-term debt. It is expected that will enhance and strengthen the Endorex
balance sheet, so that post-merger, Endorex will have approximately 2 years
worth of cash. In Endorex's opinion, 2 years worth of cash is more than enough
to weather these turbulent markets.
During the course of out M&A analysis, CTD represented the only merger candidate
that had a clinical pipeline of products and came with enough cash to develop
it's products. The other acquisitions we were looking at were too capital
intensive, requiring large developmental costs to obtain FDA approval.
Q. YOU MENTIONED IN THE PRESS RELEASE THAT THE MERGER IS SUBJECT TO THE
MEETING OF "CERTAIN OTHER CLOSING CONDITIONS." COULD YOU ELABORATE ON WHAT THESE
ARE?
A. Generally, this will be the completion of the voting agreements by key CTD
shareholders and obtaining approval of Endorex's shareholders.
Q. DO CURRENT DOR SHAREHOLDERS GET ADDITIONAL SHARES?
A. No, DOR shareholders will retain the number of shares they currently hold.
TIME FRAME
Q. DESCRIBE HOW THE EVENTS WILL UNFOLD FROM NOW?
A. The two next steps are:
1) Filing our S-4 document with the SEC which will review our proposed
merger, and
2) To obtain a date for a Special Shareholders' Meeting which will
combine the 2001 annual meeting with a special meeting to vote on the
merger. We expect the meeting to be scheduled for around October.
Q. THE RECORD DATE WILL BE ESTABLISHED TO MAKE SURE ALL CURRENT SHAREHOLDERS
HAVE AN OPPORTUNITY TO VOTE.
A. We will be working closely with the regulatory bodies such as the SEC and
Amex to provide them with the documents and materials they need.
Proxy materials will be sent out to shareholders within the next few
months. We will do our utmost to provide shareholders with the information they
need to make an informed decision about the merger.
Q. WHAT NEEDS TO BE COMPLETED?
A. The core issue is that the shareholders of Endorex will be voting on the
merger to determine the future of the combined companies. We are targeting a
date of around mid-October.
Q. WHAT ABOUT THE ANNUAL MEETING?
A. The 2001 Endorex Annual Meeting will be held at the same time as the
Special Meeting.
PROS/CONS
Q. WHAT DO YOU THINK WILL BE THE BENEFITS TO THE CURRENT ENDOREX SHAREHOLDERS
WITH THIS MERGER?
A. We are very excited by this merger because combining the two companies will
be a sum that is greater than the two parts. The novel drug delivery
capabilities and having two products in clinical trials (with one product in a
pivotal phase III trials) of the two companies together in addition to the
combined balance sheet and organization network creates an exciting company with
products to enhance patient quality of life. Post merger, Endorex will have 22
million shares outstanding representing considerable upside for the current
Endorex shareholders.
CTD has a portfolio which focuses on oral delivery of small molecule drugs
which complement Endorex's oral delivery programs of peptide and protein-based
drugs such as human growth hormone, insulin and vaccines.
Q. CONVERSELY, ENDOREX HAS HAD TROUBLE FULFILLING ITS OBJECTIVES TO ENTER
PHASE I TRIALS. WHY DO YOU THINK YOU'LL BE SUCCESSFUL IN MANAGING A COMPANY
THAT HAS A LOT MORE GOING ON?
A. As you probably know, getting a drug into clinical trials, however,
promising, is a very time-consuming process. So while we still have great faith
in Endorex's Orasome drug delivery programs, we felt that it would enhance the
value of the company to work with a portfolio of drugs that were further along
in the trials process and have a chance to get to market in a shorter amount of
time.
CTD presented a great opportunity because they are already in clinical
trials, including a pivotal phase III clinical trial for new formulations or
uses with two drugs that have been already approved by the FDA. Now the process
is to get approval for these drugs for new disease indications and the new
delivery formats.
The combined companies will have a highly qualified management team and
scientists to move this process along and see the clinical trials through.
Q. WHAT WILL YOU DO IF THE SHAREHOLDERS DECIDE THEY DON'T LIKE THIS DEAL AND
VOTE AGAINST IT?
A. We hope people will be convinced of the value of the merger and will do
everything to make sure they have information to make a decision. However, it is
ultimately the shareholders who must decide with how they vote. We encourage
them to vote yes.
STRUCTURE OF THE NEW COMPANY
Q. WHAT WILL BE THE STRUCTURE OF THE NEW COMPANY?
A. At the completion of the transaction, it is anticipated that CTD's Chairman
of the Board, Colin Bier, PhD, will be joining the Endorex management team as
Chairman of the Board and CEO. Education:
/ / Received B.A. from Sir George Williams University in Montreal
/ / Master of Science in Physiology and Immunology from Long Island
University in New York,
/ / Ph.D. in Experimental Pathology from Colorado State University, Fort
Collins in 1978.
Academic training:
/ / Dr. Douglas James Fellowship in Pathology at McGill University,
Montreal (1976-77)
/ / Postdoctoral Research Fellow with the Medical Research Council of
Canada, Department of Pathology (1977-78)
/ / His special expertise is in cardiovascular, infusion technology,
pharmacokinetics, and animal modeling.
Company Experience
/ / Since 1990 Dr. Bier has served as Managing and Scientific Director and
Consultant Toxicologist at ABA BioResearch Inc. in Montreal.
/ / At the same time he is Special Advisor, Clinical Laboratories and
Research at Mount Sinai Hospital also in Montreal.
/ / From 1988 to 1990 Founder, President and CEO of ITR Laboratories Inc.
in Quebec, Canada.
/ / 1978 to 1988, Dr. Bier was responsible for toxicology and clinical
pathology at Bio-Research Laboratories serving in various capacities
beginning as
o Head, Departments of Acute Toxicology, Clinical Pathology
and Special Services
o Director of Experimental Toxicology and Clinical Pathology
o subsequently taking the role as Vice President and Director
of Experimental Toxicology and Clinical Pathology.
Ken Tempero, M.D, Ph.D., will continue to serve as a director of Endorex.
Michael S. Rosen, current Endorex President and CEO, will remain as
President and assume the newly created title of Chief Operation Officer of
Endorex. Education:
/ / Received B.A. in Sociology/International Relations from Beloit
College
/ / M.B.A. in International Business from the University of Miami.
/ / Undertaken post-graduate courses at Northwestern University and Sophia
University in Tokyo, Japan.
Company Experience"
/ / Has served as President and Chief Executive Officer of Endorex and a
member of the Board of Directors since August 1996
/ / From January 1995 until August 1996 was President and Chief Executive
Officer of PharmaMar S.A., a European biotech company.
/ / From 1987 until 1995, held several international executive positions
at Monsanto including
o General Manager of Monsanto's northern Latin American
businesses
/ / G.D. Searle, Monsanto's pharmaceutical company including
o Senior Director, International Marketing;
o Senior Director, Japan Operations; and,
o Assistant to the President.
/ / From 1985-1987, Bristol-Myers Squibb as Director of Business
Development where he was responsible for licensing and equity
investments in biotech companies.
/ / Held international marketing and management positions at Pfizer over a
10-year period.
Steve H. Kanzer, currently CTD's President and CEO, and an Endorex
director, will remain on the Endorex board. It is anticipated that three members
of the CTD board, including Dr. Bier, will become members of the Endorex board.
Q. WHO WILL BE ON THE MANAGEMENT TEAM?
A. The team will be lead by Dr. Bier and Michael Rosen with a very capable
support staff working with them.
Q. WHERE WILL THE OFFICES BE?
A. Endorex's current offices.
Q. HOW MANY PEOPLE WILL WORK FOR THE NEW COMPANY?
A. 24
Q. HOW WILL ENDOREX'S CURRENT AGREEMENTS WITH ELAN BE IMPACTED? ALSO THE
PARTNERSHIPS WITH SCHEIN (WATSON) AND NOVO NORDISK?
A. All partnerships will be re-evaluated as a result of the merger. Prior to
this announcement, we have already announced that we are evaluating the future
of our two JV's with Elan. This decision on the future is expected to be
revealed during the third quarter. As the Watson license agreement is tied to
one of the JV's, that outcome will certainly be tied to this decision. The Novo
Nordisk research agreement on human growth hormone continues to make progress.
PORTFOLIO OF NEW DRUGS
Q. EXPLAIN WHAT THE NEW DRUGS ARE FROM CTD.
A. orBec(TM) is being developed for the treatment of intestinal
graft-versus-host disease, a life threatening complication of bone marrow
transplantation. Initially, the company's strategy will be to get orBec to
market for this life threatening indication, but post approval, the company will
seek other therapeutic indication. Beclomethasone Dipropionate, a site-active
corticosteroid currently available and used only to treat asthma, is available
commercially from other companies and is traditionally delivered via a pulmonary
inhaler or nasal spray. CTD has created a dual-release oral tablet form known as
orBec(TM), and is initiating phase III multicenter trials in the U.S. for the
TREATMENT of intestinal graft-versus-host disease, a new indication for this
drug. Phase III trials for this indication are also planned to take place in
Europe. CTD has received FDA "fast track" designation for orBec(TM) in this
indication. OrBec(TM) has also received Orphan Drug designation from the FDA for
the TREATMENT of intestinal graft-versus-host disease.
Oraprine(TM), a novel liquid formulation of the immunosuppressant drug
azathioprine, currently has completed phase I trials. AZA is one of the most
widely used immunosuppressive medications in clinical medicine. AZA is commonly
prescribed in tablet form to organ transplant patients to suppress the body's
defenses against foreign bodies (specifically the transplanted organ). This
increases the chances of preventing the transplanted organ from being rejected
by the patient.
This suppression of the body's defenses makes AZA useful in treating
rheumatoid arthritis. AZA is prescribed as a "second-line" treatment for severe,
active rheumatoid arthritis in patients who do not respond to initial arthritis
medications. Faro Pharmaceuticals markets AZA as the brand name drug Imuran(R),
and AZA is sold by several generic drug companies in solid dosage, powder, and
intravenous forms. 1998 sales of Imuran(R) were $140 million.
Oraprine(TM) has completed a phase I bioequivalency clinical trial in the
United States, which demonstrated that Oraprine(TM) is equivalent to the
currently marketed Imuran(R) tablet. This drug has historically been available
only in inject able and tablet forms.
Q. WHAT CHANCE DO THEY HAVE OF GETTING TO MARKET? WHEN?
A. OrBec(R) has initiated phase III multicenter trials in the U.S. for the
TREATMENT of intestinal graft-versus-host disease, a new indication for this
drug. Phase III trials for this indication are also planned to take place in
Europe .CTD has received FDA "fast track" designation for orBec(TM) in this
indication, allowing the company to have a 6 month expedited review process.
OrBec(TM) has also received Orphan Drug designation from the FDA for the
PREVENTION of intestinal graft-versus-host disease.
Q. WHO IS THE SCIENTIFIC TEAM BEHIND THE CTD DRUGS? WILL THEY MOVE TO ENDOREX?
A. CTD is a virtual company which has hired key external CRO's for regulatory
and clinical development of its products in the U.S. and Europe
/ / CRO's are
o Clinical Tab Clinical Trials, Inc.
o Regulatory: Hoyle Consulting, Inc.;
Q. DESCRIBE THE FUTURE PATENT SITUATION?
A. Currently CTD has 8 issued patents of which
/ / 5 are U.S. patents, and
/ / 3 are international patents
And has 10 patent applications pending:
/ / 8 U.S. applications
/ / 2 international applications