Angiotech Pharmaceuticals, Inc. has executed an exclusive license agreement providing CABG Medical with access to Angiotech's pioneering technology to treat restenosis and proliferative disease through the local delivery of the drug paclitaxel, and to Angiotech's extensive intellectual property portfolio related to this technology. CABG Medical will employ Angiotech's technology in the field of coronary artery bypass grafts.
In connection with the license agreement, Angiotech will receive a warrant to purchase 1,262,823 shares of CABG Medical's common stock, exercisable at $0.01 per share. Angiotech will also be entitled to milestone payments upon the achievement of identified clinical development objectives and in addition will receive royalties on sales of the Holly Graft System. In a separate transaction, Angiotech has agreed to purchase up to $10 million of CABG Medical's common stock at a 15 percent premium to the market value of such stock, with a current investment of $5 million and an additional $5 million investment upon CABG Medical's achievement of certain revenue milestones.
Despite the success of coronary stenting, over 600,000 patients worldwide have coronary artery bypass procedures requiring an average of three bypass vessels per procedure. Approximately 20 percent of these patients experience some type of complication as a result of a traditional vessel harvesting for a typical bypass procedure.
CABG Medical is currently developing the Holly Graft System, which is designed to eliminate the need during a bypass procedure to perform a second surgery to harvest vessels from the chest, legs or arms for use in the coronary artery bypass procedure. The Holly Graft System may potentially reduce operating-room time as well as post-operative care and readmissions. The Holly Graft System may be utilized in procedures that incorporate either the heart-lung bypass machine or in so-called "off pump" procedures giving surgeons added flexibility.
"We are excited to have the opportunity to extend our novel drug-eluting technology into the coronary bypass field through our new relationship with CABG Medical," Dr. William Hunter, president and CEO of Angiotech said adding, "We feel confident our technology can contribute to the clinical development and potential for success of the Holly Graft™ System. We are also pleased to continue to recognize value from our extensive intellectual property portfolio and know-how in the area of local delivery of paclitaxel - we expect that many more partners will seek access to our proprietary position through licenses to our technology, which is covered by many valid and issued patents throughout the world."
"We are proud to have taken our next big step forward in developing the Holly Graft System by establishing a relationship with the technology leader in drug-device combinations," said Manny Villafana, Chairman and Chief Executive Officer of CABG Medical."In addition to securing access to the technology and know-how of Angiotech, through our license agreement we have secured the intellectual property foundation underlying the paclitaxel franchise, which we feel significantly enhances our competitive and proprietary position."