Quest PharmaTech Inc., announces that its subsidiary, OncoQuest Inc. has closed a U.S. $13,000,000 private placement. This financing is a non-brokered private placement of 3,475,936 Series A preferred shares of OncoQuest at a price of U.S.3.74 per preferred share.
The preferred shares carry a 5% cumulative annual dividend rate and are convertible one-for-one into common shares of OncoQuest. The private placement was made to Hepalink USA Inc. (Hepalink USA), a U.S.-based subsidiary of Shenzhen Hepalink Pharmaceutical Co., Ltd. (Shenzhen Hepalink), a China-based global pharmaceutical company. The preferred shares represent a 41% ownership interest in OncoQuest while Quest will retain a 51% ownership interest in OncoQuest. The remaining 8% ownership interest in OncoQuest is reserved for various parties from South Korea who gave up their future revenue sharing rights to the Immunotherapy Technologies held under 2 prior Investment Agreements in return for common shares of OncoQuest. OncoQuest plans to use the proceeds of this private placement primarily for its immunotherapy for treatment of cancer drug development program and for general corporate purposes.
Under the private placement arrangement, Hepalink USA will also be entitled to nominate two representatives to the five member Board of Directors of OncoQuest. Hepalink USA also owns 16.62% of the total outstanding shares of Quest.
“I am very pleased to note that Hepalink USA and Quest have strengthened their relationship beyond the parent company, and I express my thanks for their confidence in our Immunotherapy Technologies by investing additional funds in OncoQuest” said Dr. Madi Madiyalakan, CEO of OncoQuest. “Hepalink USA and Shenzhen Hepalink, through their extensive pharmaceutical industry experience, can assist in leveraging OncoQuest’s recent funding to facilitate and accelerate product development and provide support for further funding opportunities to initiate a phase III clinical trial for OncoQuest’s lead product, oregovomab for the treatment of ovarian cancer” added Dr. Madiyalakan. “It is indeed a new opportunity for Quest shareholders”.
OncoQuest is also in negotiations with Shenzhen Hepalink to arrange funding for a Chinese joint venture related to Chinese product development, and the Chinese manufacturing and marketing rights for OncoQuest’s Immunotherapy Technologies.
