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ChemGenex Announces New Significant Investors, Completes Capital Raising, Announces Rights Issue and Board Changes


MELBOURNE, Australia, and MENLO PARK, California U.S.A.

February 08, 2007
ChemGenex Pharmaceuticals (ASX: CXS, NASDAQ: CXSP) today announced that two highly respected biotechnology investment funds have become significant shareholders in the company. Alta Partners, based in San Francisco and GBS Venture Partners, based in Melbourne have participated in an acquisition of existing shares and capital raising for new shares and share options in ChemGenex.

Highlights of the transaction

The shares acquired by Alta Partners and GBS Venture Partners constitute the substantial holding of former significant shareholder, Charter Pacific Limited.

Alta Partners, GBS Venture Partners and existing institutional investors will participate in a $A10.5 million (approximately US$8.2 million) capital raising through an institutional share and option placement. The 17,056,377 new shares will be priced at A$0.62 per share and the 5,685,459 options (on a 1:3 basis) will have a five year term and a exercise price of A$0.75.

A 1:10 rights issue for shares and options at the same terms as the placement described above will be made to eligible shareholders. Details of the rights issue will be announced at a later date, but if fully subscribed it will raise an additional $A10.5 million (approximately US$8.2 million) of new capital. Alta Partners and GBS Venture Partners have indicated an intention to participate in the rights issue.

The appointment of two new Non-executive Directors; Mr Daniel Janney and Dr Geoff Brooke, and the resignation of four Non-executive Directors; Mr Kevin Dart, Mr Roger Byrne, Mr Peter Bradfield and Dr Denis Wade.

Alta Partners is recognized as one of the leading venture capital companies in the US, with more than a decade of outstanding performance and nearly US$2 billion under management. Since its inception, Alta has invested over US$1 billion in more than 125 life sciences companies. The Alta team has a track record of building successful businesses through deep collaborative partnerships with outstanding entrepreneurs. Alta has a history of working closely with portfolio company management teams to provide critical strategic, operational and financial advice and help build market-leading companies.

GBS Venture Partners is one of Australia’s leading life science venture capital groups with a decade of success investing in, and adding value to innovative technology companies. The GBS team has been investing in Australasia since 1996 and played founding roles in companies with a combined market capitalisation of more than $2 billion. GBS Venture Partners has an expert team who provide high level strategic support to company management to create sustainable value in their portfolio companies.

“We are delighted to welcome two highly regarded and well credentialed venture capital companies as significant investors in ChemGenex,” said Greg Collier, Ph.D., Chief Executive Officer and Managing Director. “Both Alta and GBS Ventures have outstanding reputations, and we look forward to working with them to build value as ChemGenex moves into the last phase of clinical development for Ceflatonin®. The capital raising secures our financial position, and will allow us to accelerate the development programs for Ceflatonin® in other forms of leukemia such as acute myeloid leukemia (AML) and myelodysplastic syndrome (MDS).”

“As we look forward to an exciting new phase in the corporate development of ChemGenex, with new shareholders involved it is important to acknowledge the significant contribution that Charter Pacific has made to the company. We thank Charter Pacific for its financial and corporate support, and for their commitment to growing the company for the benefit of all shareholders. We would particularly like to acknowledge the support of Charter Pacific’s CEO, Mr Kevin Dart, who has been a strong advocate for, and friend to ChemGenex over a four and a half year period. The Board and management team of ChemGenex wish Charter Pacific well as it pursues other investments and strategies.”