BLUE BELL, PA
March 14, 2004 - InKine Pharmaceutical Company, Inc.
(Nasdaq: INKP) )today reported that its previously announced public offering for six million shares of common stock, at $5.00 per share, that was scheduled to close on Monday, March 15, has been withdrawn. On Friday evening, March 12, in the course of preparing for the closing, it came to the Company’s attention that its certificate of incorporation does not contain any provision exempting the Company from providing preemptive rights in connection with certain securities offerings. Under New York law, shareholders of corporations such as InKine, that were incorporated before February 22, 1998, generally have preemptive rights unless the certificate of incorporation provides otherwise. Typically these preemptive rights are eliminated when a corporation becomes a public entity by the filing of an amendment to the certificate of incorporation. In 1995, when InKine (formerly Panax Pharmaceutical) filed for its IPO, the former management and board of directors did not amend the certificate of incorporation to eliminate these rights.
If shareholders at the time of certain prior securities offerings had preemptive rights, those shareholders may have certain claims against the Company. The Company, in conjunction with independent counsel, is evaluating all the facts, as well as potential claims and defenses, to assess the extent of the Company’s potential exposure. If statutory preemptive rights are found to exist, and if shareholders with such rights claim damage from prior offerings, the Company believes that it is entitled to reimbursement for any resulting liabilities from third parties. However, no assurance can be given that the Company will obtain such reimbursement or that any such liability will not be material. The Company intends to take all such actions as are necessary to clearly eliminate the applicability of statutory preemptive rights to future securities offerings.
As the Company previously stated, the use of proceeds from the proposed offering was primarily for the acquisition of new gastrointestinal opportunities and general corporate purposes. Accordingly, the Company does not believe that the withdrawal will have any significant adverse effect upon current operations.
About InKine Pharmaceutical
Pharmaceutical Company, Inc. is a publicly traded
biopharmaceutical company focused on the diagnosis and
treatment of cancer and autoimmune diseases. The Company's
development strategy is to acquire late-stage drug
candidates with short time lines to commercialization. The
Company's first product, Visicol™ is the first and only
tablet purgative preparation indicated for bowel cleansing
prior to colonoscopy. InKine's second product, IBStat™, is a
novel oral hysocyamine spray for the treatment of Irritable
Bowel Syndrome (IBS) and spasm of the colon. Additionally,
the Company is developing other clinical compounds such as
Colirest™, which is in clinical trials for the treatment of
Crohn's disease and completed Phase II trials for the
treatment of ulcerative colitis. For further information,
please visit InKine on their web site http://www.inkine.com.
In addition to historical facts or
statement of current condition, this press release may
contain forward-looking statements. Forward-looking
statements provide InKine's current expectations or
forecasts of future events. These may include statements
regarding anticipated scientific progress on its research
programs, development of potential pharmaceutical products,
interpretation of clinical results, prospects for regulatory
approval, manufacturing development and capabilities, market
prospects for its products, sales and earnings projections,
and other statements regarding matters that are not
historical facts. You may identify some of these
forward-looking statements by the use of words in the
statements such as "anticipate," "estimate," "expect,"
"project," "intend," "plan," "believe" or other words and
terms of similar meaning. InKine's performance and financial
results could differ materially from those reflected in
these forward-looking statements due to general financial,
economic, regulatory and political conditions affecting the
biotechnology and pharmaceutical industries as well as more
specific risks and uncertainties such as those set forth in
its reports on Form 10-Q and 10-K filed with the U.S.
Securities and Exchange Commission. Given these risks and
uncertainties, any or all of these forward-looking
statements may prove to be incorrect. Therefore, you should
not rely on any such factors or forward-looking statements.
Furthermore, InKine does not intend (and it is not
obligated) to update publicly any forward-looking
statements. This discussion is permitted by the Private
Securities Litigation Reform Act of