<PAGE> 1
EXHIBIT 99.1
[NEOTHERAPEUTICS LOGO]
NeoTherapeutics Raises $5 Million for 10% of its Functional Genomics Subsidiary,
NeoGene Technologies
FINANCING WILL SUPPORT GENETIC RESEARCH THAT MAY IDENTIFY
THE "NEXT GENERATION" OF DRUG DEVELOPMENT TARGETS
Irvine, California, September 25, 2000 -- NeoTherapeutics, Inc. (NASDAQ: NEOT;
NEOTW) today announced that it has raised $5 million through the private
placement with institutional investors of preferred stock that is convertible
into a 10% ownership of its functional genomics research subsidiary, NeoGene
Technologies, Inc. Proceeds from the sale will be used to fund the expansion and
ongoing research activities of NeoGene.
"We are pleased that investors are beginning to recognize the value of our
NeoGene subsidiary," said Dr. Alvin J. Glasky, Chief Executive Officer of
NeoTherapeutics and President of NeoGene. "This financing enables NeoGene to
accelerate the expansion of its research and development efforts and
demonstrates the significant value of NeoTherapeutics' remaining approximate 80
percent ownership interest in NeoGene Technologies. NeoGene now has the
financial resources necessary to build on its position as a leader in the
identification of orphan receptors, and to put the genes to work as a target to
develop drugs with the potential to treat neurological, psychiatric and other
disorders."
NeoGene Technologies, Inc. was created in October 1999 by NeoTherapeutics in
collaboration with Dr. Olivier Civelli, a world-renowned genetic researcher and
pharmacologist and his team at the University of California, Irvine. NeoGene's
research team has discovered the function of more orphan receptors than other
groups in the field of functional genomics. NeoGene is a functional genomics
company that is taking the next step, after the well-publicized sequencing of
the human genome, to study and understand the functions of individual genes.
NeoGene's research is aimed at the discovery of the function of a large set of
genes known as "orphan receptors." These receptors act as "locks" that control
various processes within the cells to which they are attached. NeoGene's
proprietary technology identifies the biological agent that acts as key for each
orphan receptor and therefore "unlocks" the biochemical process of that cell.
Once the actual process unlocked is analyzed and understood, it can be used as a
target for the development of a "next generation" drug. NeoGene's research team
has already "unlocked" receptors that may enable the treatment of epilepsy
hypertension and obesity.
The institutional investors received 5% convertible preferred stock in NeoGene
and 5-year warrants to purchase up to an additional 2% of NeoGene common stock
that, if exercised for cash, could raise as much as another $1.0 Million. In
addition, the investors were granted 5-year warrants to purchase 80,000 shares
of NeoTherapeutics common stock at an exercise price of $10.47 per share. The
NeoGene preferred stock is convertible into NeoGene common stock automatically
upon the closing of a NeoGene public offering that meets certain criteria. Under
certain circumstances, the investors have the right to exchange the convertible
preferred stock of NeoGene for convertible preferred stock or convertible
debentures of NeoTherapeutics.
<PAGE> 2
NeoTherapeutics Raises $5 Million for 10% of its Functional Genomics Subsidiary,
NeoGene Technologies
September 25, 2000
Page 2
NeoGene's parent company, NeoTherapeutics, Inc., is a leader in the field of
nerve regeneration. The company's most advanced drug candidate, Neotrofin(TM),
is currently being developed for Alzheimer's disease as its first indication,
and is being tested in late-stage, controlled clinical studies involving some
2000 patients worldwide. In animal models of cognitive decline, aging and spinal
cord injury, Neotrofin(TM) has been shown to restore function. Recent data has
also demonstrated the ability of Neotrofin(TM) to reduce beta-amyloid
accumulation in cell culture.
NeoTherapeutics' research and development program is focused on designing and
developing small molecules capable of treating neurological diseases and
conditions such as, peripheral neuropathy, spinal cord injury, stroke and
Parkinson's disease. Additional compounds in NeoTherapeutics' product pipeline
address other health issues such as migraine, depression and obesity. For
additional Company information, visit the NeoTherapeutics web site at
www.neotherapeutics.com.
This press release may contain forward-looking statements regarding future
events and the future performance of NeoTherapeutics that involve risks and
uncertainties that could cause actual results to differ materially. These risks
are described in further detail in the Company's reports filed with the
Securities and Exchange Commission.
CONTACT:
Carol Gruetter
Investor Relations
NeoTherapeutics, Inc.
Phone (949) 788-6700 or
E-mail: [email protected]
