Exhibit 99.1
CardioTech International Inc. Announces Completion of
Divestiture of Its UK Subsidiary For $7 Million In Cash
Woburn, Massachusetts (November 21, 2000). CardioTech International, Inc. (the
"Company") (AMEX:CTE) today announced that on November 17, 2000 it executed
definitive agreements (the "Agreements") in connection with the sale of its
wholly owned UK subsidiary, CardioTech International Ltd. ("CTL") to Nervation
Ltd ("Nervation"). Nervation is a newly formed UK company led by certain
members of CTL's former management, joined by The Royal Free and University
College of London School of Medicine and 3i plc. (for consideration consisting
primarily of $7,000,000 in cash plus the release of certain liabilities and
obligations, including but not limited to, the release of a guarantee of
$540,000 in CTL debt.)
In connection with the transaction, the Company has utilized approximately
$2,053,000 to redeem the major portion of senior convertible notes held by
Dresdner Kleinwort Benson Private Equity Partners LP. The Company has also
placed approximately $700,000 of the gross proceeds in escrow, to be released to
the Company on the eighteenth month from the date of the Agreements, to satisfy
certain indemnification provisions of the Agreements.
CardioTech has also granted Nervation an option, ( the "Option") pending
successful completion of animal trials, to become the exclusive distributor of
the Coronary Artery Bypass Graft ("CABG") in the EEC countries, when CE marking
is received for the product.
As part of this transaction, 3i Plc, an international venture capital firm, has
provided funding to Nervation, both for the financing necessary to purchase CTL
from the Company, as well as future funding of Nervation's operations. In
addition to the consideration provided for the purchase of CTL, 3i Plc has
agreed to provide funding of up to $3,000,000 in order to perform the European
clinical trials necessary to secure CE marking if the Option is exercised by
Nervation. The Option is exercisable by Nervation at anytime prior to or upon
the Company's successful completion of animal trials using the Coronary Artery
Bypass Graft.
As a result of the completed transaction, Nervation will have the exclusive
rights to the Vasculink Vascular Access Graft and the Myolink Arterial Bypass
Graft and CardioTech will retain the exclusive rights to the CardioPass Coronary
Artery ByPass Graft. The Company has agreed to supply "Chronoflex RC" to CTL
and CTL will provide certain grafts necessary for the Company's pre-clinical
trials of the Coronary Artery Bypass Graft.
The proceeds from this transaction have been budgeted by the Company for
thecontinued development of the Coronary Artery ByPass and performance of
clinical trials,with the ultimate intent of securing the necessary FDA approvals
that will enable the Company to introduce the Coronary Artery ByPass Graft to a
market that is believed to be approximately $1.5 billion.
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Dr. Michael Szycher, Chairman and CEO of CardioTech International, stated: "We
believe the completion of this most important transaction provides the Company
with the opportunity, for the first time in its short history, to properly
capitalize the Company so that it may focus on its main objective since
inception - the development and commercialization of a coronary artery bypass
graft that will target a market estimated to be $1.5 billion. In addition, the
Company has relieved itself of the burden of significant debt and the capital
drain resulting from further investment in sales and marketing to promote the
vascular access graft and development costs to commercialize the peripheral
graft. We are also encouraged by 3i Plc's vote of confidence in the undertaking
of this most important project and their desire to offer the potential for
additional, significant funding to advance the European clinical trials of the
Coronary Artery ByPass Graft. The commitment by the Company of these resources
will enable a very focused strategy that should increase the probability of
making the coronary artery bypass graft a reality, thereby providing the
greatest value proposition to its shareholders, and most importantly to those
current and future patients who have no alternatives."
CardioTech International, Inc. maintains operations in Woburn, Massachusetts
where it is designing and developing polyurethane-based vascular graft devices
for the treatment of end-stage cardiovascular disease. Additionally, the Company
manufactures and markets medical grade polyurethanes for use in implantable
medical devices and other applications.
The Company believes that this Release contains forward-looking statements that
are subject to risks and uncertainties. Such statements are based on
management's current expectations and are subject to a number of factors that
could cause actual results to differ materially from the forward-looking
statements. The Company cautions investors that there can be no assurance that
actual results will not differ materially from those projected or suggested in
such forward-looking statements, as a result of various factors, including
successfully obtaining regulatory approvals. As a result, the Company's further
development involves a high degree of risks, as detailed in SEC reports.
Contact:
Michael Szycher, Ph.D.,
Chief Executive Officer
781- 933-4772
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