HILLSIDE, N.J., Feb. 27 /PRNewswire-FirstCall/ -- Integrated Health Technologies, Inc. (Bulletin Board Symbol: IHTC.OB) acquired a fifty percent interest of Natex Georgia LLC as of February 1, 2003 for $1,170,000 paid in 2,458,886 shares of the company's common stock valued on the basis of the average closing price per share for the thirty trading days immediately preceding January 14, 2003, the date of the first public disclosure of the company's intention to engage in the Natex acquisition. The company has also entered agreements to purchase over fifty percent of Paxis Pharmaceuticals, Inc., an affiliate of Natex, in consideration for less than 400,000 shares of the company's common stock and an earn out payable only out of a fraction of the Paxis net earnings that accrue to the company. The company intends to complete these purchases by July of this year.
Natex is a company engaged in the business of harvesting and collecting taxis baccatta botanical materials from government properties in the Republic of Georgia, pursuant to an exclusive ten-year license from and supervised by the Georgian government. Natex processes the materials to extract precursor paclitaxel and sells the extract to Paxis pursuant to an exclusive supply contract with Paxis.
Paxis is in the business of converting the extract to finished U.S.P. grade paclitaxel in its Boulder, Colorado facility. Paxis intends to sell the bulk paclitaxel to other companies who will convert it to dosage form or combine it with other substances, for sale and distribution as cancer therapy.
Paxis acquired key manufacturing assets and licensed the rights to intellectual property from Hauser, Inc. in May of 2002. Paxis acquired the lease on Hauser's Boulder, Colorado, paclitaxel manufacturing facility and acquired equipment located there that will have the capacity, with certain additions currently being installed by Paxis, to produce more than 200 kilograms of Paclitaxel per year. Dr. Dean Stull, who was the CEO of Hauser when Hauser was producing paclitaxel at the Boulder facility as Bristol-Myers' [exclusive] supplier, is the President of Paxis.
"The Natex and Paxis transactions will enable IHTC to have a major role in the future of paclitaxel. Current retail paclitaxel sales are more than $1 billion yearly and we believe that the demand will grow 20 percent annually over the next 10 years," said E. Gerald Kay, chairman of IHTC. "Natex has one of the few economic and reliable sources of precursor paclitaxel and Paxis has the leadership, technology, know-how and a facility formerly used and approved by the FDA, for production of paclitaxel."
Paclitaxel is a naturally occurring chemotherapeutic anti-cancer agent found in certain species of yew, or Taxus, trees. Paclitaxel is one of a family of compounds, commonly referred to as taxanes that share a specific chemical structure. Taxanes are found naturally in many parts of various species of yew trees. The concentration of individual taxanes in yew trees is very small, generally less than 0.02% and accordingly, the process of extracting taxanes from yew biomass is complicated and challenging. Several production approaches can be used to produce paclitaxel product. The two most prevalent processes used are conventional biomass extraction and semi synthesis.
With conventional biomass extraction, the manufacturing process is designed to extract, isolate and purify paclitaxel from yew biomass leaving behind other components, including non-paclitaxel taxanes. However, the extraction, isolation and purification processes are complicated because there are more than 100 different taxanes present in yew biomass. In a semi synthesis process, the initial extraction, isolation and purification is similar to that of the conventional biomass extraction process, except that the process not only isolates paclitaxel, but also other taxanes (which would otherwise be waste byproducts) and converts these other taxanes into paclitaxel. By converting other taxanes into paclitaxel, the semi synthesis process increases the yield of paclitaxel from the same quantity of biomass. Regardless of which process is used, the final product must meet acceptable impurity criteria. The current market rate for paclitaxel ranges from $250,000-$500,000 per kilo.
The Company's competitors in the paclitaxel segment of the cancer treatment industry include Bristol-Myers Squibb Company, NaPro BioTherapeutics, Inc. and Aventis S.A. The Food and Drug Administration has approved several generic versions of paclitaxel. Ivax Corporation, Mylan Laboratories, Inc., Abbott Laboratories, and Bedford Laboratories have approval to sell generic paclitaxel in the United States.
Integrated Health Technologies is a unique biopharma company headquartered in Hillside, New Jersey. IHTC serves the varied needs of the nutraceutical industry through its wholly owned subsidiaries. Manhattan Drug Company, established in 1922, provides contract manufacturing; IHT Health Products supplies raw material sourcing; Integrated Health I.D.E.A.S. enables new product development and technical services and Chem International distributes Roche Vitamins, Inc. products.
NuCyle Therapy, Inc., the company's recently announced acquisition, is a biotech company engaged in the development and sale of nutritional formulations based on plant-derived minerals through patented hyper accumulation technology. Additionally NuCycle designs and constructs edible crop plants that synthesize nutraceuticals and human therapeutics, using genetic engineering methods. Using plants to manufacture human therapeutic proteins significantly reduces the costs of manufacturing. Further the plants may produce molecules in a form that can be taken orally, rather than by injection, which simplifies delivery and also brings down costs. Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain risks and uncertainties detailed in the Company's filings with the Securities and Exchange Commission.