Response Biomedical Corporation (TSX: RBM, OTCBB: RPBF) announced today the signing of a subscription agreement providing for the sale of C$8 million of its common shares to funds affiliated with OrbiMed Advisors, LLC. The closing of the private placement is subject to receipt of all necessary regulatory approvals, including the approval of the Toronto Stock Exchange ("TSX") and the shareholders of the Company. A shareholders' meeting to approve the transaction is being scheduled for Tuesday, July 27, 2010 and shareholders will soon be receiving an information circular describing the proposed transaction in more detail.
“We are excited to invest in Response Biomedical, with its cutting edge commercialized rapid point-of-care diagnostics platform technology”
"We are extremely pleased to have OrbiMed, the world's largest and most prestigious healthcare-dedicated investment firm, invest in our Company," said S. Wayne Kay, Chief Executive Officer of Response Biomedical. "The participation by OrbiMed's affiliated Asia fund is indicative of our expanding growth in the China Market. We have begun putting in place an expanding global network of partners and distributors, in addition to Roche Diagnostics and 3M Healthcare, to access further commercial opportunities in the rapid clinical diagnostics area. With our growing revenues, this funding will allow us to concentrate on accomplishing our operational goals as we move toward becoming cash flow positive."
"We are excited to invest in Response Biomedical, with its cutting edge commercialized rapid point-of-care diagnostics platform technology," said Carl Gordon, founding General Partner of OrbiMed Advisors. "We see the value in growth expansion opportunities in China and other key international markets, especially in the cardiac space. Response Biomedical has assembled a strong team and commercial partners and we look forward to working together to help build this business."
Pursuant to the subscription agreement, the Company has agreed to issue an aggregate of 13,333,333 common shares at a price of C$0.60 per share. The common shares issued under the subscription agreement will have a hold period under Canadian law of four months and one day from the closing. The Company has agreed to nominate two representatives of OrbiMed Advisors to serve on the Company's board of directors, provided that OrbiMed or its affiliates continue to hold at least 5,800,000 common shares of the Company. Net proceeds of the private placement will be used primarily for general operating expenses. A finder in the private placement will be receiving a cash fee that equals three percent of the gross proceeds raised from the private placement.
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