Beanstalk Capital Ltd. enters into arrangement agreement with iCo Therapeutics Inc.



    SYMBOL - BCL.P

    VANCOUVER, Oct. 16 /CNW/ - Beanstalk Capital Ltd. ("Beanstalk") is
pleased to announce that it has entered into an arm's length arrangement
agreement dated October 15, 2007 (the "Arrangement Agreement") with iCo
Therapeutics Inc. ("iCo"). The proposed transaction (the "Arrangement"), when
completed, will constitute Beanstalk's "Qualifying Transaction" as a capital
pool company. Under the Arrangement, iCo will amalgamate with a wholly-owned
subsidiary of Beanstalk and all of the issued and outstanding securities of
iCo, including options and warrants, will be taken up by Beanstalk and paid
for by the issuance of equivalent Beanstalk securities on a one-for-one basis.
The amalgamated company, which will carry on the business currently conducted
by iCo, will be a wholly-owned subsidiary of Beanstalk.
    Beanstalk currently has 5,500,000 common shares, 250,000 warrants and
605,000 options issued and outstanding and iCo currently has 13,723,053 common
shares, 1,638,708 warrants and 1,290,000 options issued and outstanding. Prior
to the closing of the Arrangement (but after the financings described below),
Beanstalk will consolidate its common shares on the basis of one share for
each 2.8 shares currently outstanding. Following the closing of the
Arrangement, current iCo shareholders will hold approximately 77.8% of the
issued and outstanding Beanstalk Common Shares, current Beanstalk shareholders
will hold approximately 11.1% of the issued and outstanding Beanstalk Common
Shares and investors in the private placement described below will hold
approximately 11.1% of the issued and outstanding Beanstalk Common Shares.

    Financings

    Under the terms of the Arrangement Agreement, Beanstalk has agreed to use
commercially reasonable efforts to complete an equity financing raising a
minimum of $1,802,500 prior to or concurrent with the closing of the
Arrangement Agreement. On October 15, 2007, Beanstalk entered into an
engagement letter with Canaccord Capital Corporation ("Canaccord") pursuant to
which Canaccord will act as agent in connection with a brokered private
placement of up to 5,150,000 units (the "Units") of Beanstalk. Beanstalk has
granted Canaccord an option (the "Over-Allotment Option") to issue up to
2,800,000 additional Units. The Units will be issued at a price of $0.35 per
unit for an aggregate subscription amount of up to $1,802,500 ($2,782,500 if
the Over-Allotment Option is exercised in full). Each Unit will consist of one
Beanstalk common share and one-half of one common share purchase warrant.
Subject to early expiry in accordance with their terms, each whole warrant
will have an exercise price of $0.45 per share and be exercisable for a period
of 12 months.
    Canaccord will receive a cash commission equal to 8% of the gross
proceeds and 100,000 Beanstalk Common Shares (on a post-consolidation basis).
Canaccord will also receive warrants to purchase a number of Units equal to 8%
of the total number of Units issued under the private placement. The Canaccord
warrants will have an exercise price of $0.45 and be exercisable for a period
of 12 months.

    Share Capital Summary

    The following is a summary of the anticipated share capital of Beanstalk
after completion of the Arrangement (after giving effect to the 2.8:1 share
consolidation of Beanstalk). All figures are based on Beanstalk raising
$1,802,500 pursuant to the financing described above.

    
    Common Shares

      Currently outstanding                                        1,964,286
      Issued pursuant to Beanstalk private placement               1,839,286
      Issued to Canaccord                                            100,000
      Issued to iCo shareholders                                  13,723,053
      --------------------------                                  ----------
      Total                                                       17,626,625

    Warrants

      Currently outstanding                                           89,286
      Issued pursuant to Beanstalk private placement                 919,643
      Issued to Canaccord                                            220,714
      Issued to iCo warrantholders                                 1,638,708
      ----------------------------                                 ---------
      Total                                                        2,868,351

    Options

      Currently outstanding                                          216,071
      Issued to iCo optionholders                                  1,290,000
      ---------------------------                                  ---------
      Total                                                        1,506,071

    Fully Diluted                                                 22,001,047
    

    Under the terms of the Arrangement Agreement, iCo may complete an equity
financing of up to US$1,000,000 (the "iCo Private Placement") prior to the
closing of the Arrangement. The above numbers do not reflect any additional
securities that iCo may issue pursuant to the iCo Private Placement.

    Information About iCo

    iCo, which is a Vancouver-based company incorporated under the federal
laws of Canada, is an emerging biotechnology company focussed on the
identification, development and commercialization of drug candidates that
treat ocular indications through a development-only business model.
    iCo's strategy is to in-license drug candidates that have clinical or
pre-clinical history and compelling evidence of scientific, clinical and
commercial potential in ocular indications. iCo assumes the clinical,
regulatory and commercial development activities for its product candidates
and advances them along the regulatory and clinical pathway toward commercial
approval. iCo believes that this approach reduces the risk, time and cost of
developing ocular therapeutics by avoiding the uncertainty associated with
research and pre-clinical stages of drug development.

    Product Candidates

    iCo has in-licensed two product candidates that it believes have the
potential to treat sight-threatening conditions: iCo-007 and iCo-008.
    iCo is developing iCo-007 as a potential treatment for diabetic
retinopathy, including macular edema. Diabetic retinopathy is characterized by
new blood vessel growth and increased vascular permeability. iCo-007 is a
second generation antisense compound that iCo believes reduces levels of a key
protein associated with diabetic retinopathy and diabetic macular edema. In
January 2007, iCo received clearance from the U.S. Food and Drug
Administration to initiate a Phase I dose-escalating clinical trial in the
United States using a single injection of iCo-007 in patients with diffuse
diabetic macular edema. iCo expects to begin Phase I trials for iCo-007 in
October 2007.
    iCo-008 is a human monoclonal antibody that iCo believes has the
potential to inhibit the development of severe allergic conjunctivitis. Before
iCo licensed iCo-008 from Cambridge Antibody Technology Limited ("CAT"), CAT
conducted a Phase I clinical trial of iCo-008 in healthy human volunteers and
Phase II clinical trials of iCo-008 for allergic rhinitis and allergic
conjunctivitis. iCo currently plans to begin Phase II trials to test the
efficacy and safety of iCo-008 as a potential treatment for a serious sight
threatening form of allergic conjunctivitis known as vernal
keratoconjunctivitis in the first half of 2008.

    Board and Management of Resulting Issuer

    It is anticipated that upon completion of the Arrangement Agreement, the
current directors and officers of Beanstalk will resign and Beanstalk will be
managed by the current management of iCo. The following is a biography of the
individuals who will be expected to be the directors and officers of Beanstalk
after the closing of the Arrangement Agreement.

    Directors

    Sidney Himmel, CA - Chairman and Director

    Sidney Himmel, who is currently the president and chief executive officer
of Trigon Uranium Corp., has over 17 years experience in Canadian capital
markets. Mr. Himmel previously served as vice-president and director for
Toronto Dominion Securities, where he specialized in biotechnology, and worked
as a corporate finance specialist at Merrill Lynch Canada Ltd. During his time
in the investment banking industry, Mr. Himmel participated in the financing
of numerous growth and large capitalization companies raising capital in both
public and private financial settings. Mr. Himmel was involved with equity
institutional sales and trading with Toronto Dominion Securities, where he
headed up the preferred share sales desk of Toronto Dominion Securities. Mr.
Himmel holds a Bachelor of Sciences and Bachelor of Arts from the University
of Toronto. He is a member of both the American Chemical Society and the
Institute of Chartered Accountants of Ontario.

    Andrew J. Rae, MBA - Director, President and Chief Executive Officer

    Andrew Rae has spent a decade in the biotechnology industry, most
recently as the chief financial officer of Ability Biomedical Corporation,
which was acquired by Medarex, Inc. in 2004. Mr. Rae has also served as
vice-president of finance and corporate affairs with Active Pass
Pharmaceuticals, Inc. During his tenure at both Active Pass and Ability
Biomedical, Mr. Rae raised approximately $20 million in the aggregate in
venture financing, engaged in a successful cross-border acquisition
transaction and played a significant role in shaping multiple business
development deals. Before joining Active Pass, Mr. Rae served as a
biotechnology equities analyst for Goepel Shields & Partners (now Raymond
James Canada), where he covered Canadian biotechnology stocks including
Angiotech Pharmaceuticals, Inc., QLT Inc. and ID Biomedical Corp. Mr. Rae
currently sits on the Dean's External Advisory Board for the Faculty of
Business Administration at Simon Fraser University. He previously served on
the board of directors, and sat on the audit committee and nomination and
governance, for Liponex Inc., a Canadian, TSE-listed biopharmaceutical
research company. Mr. Rae received a B.Sc. from the University of Western
Ontario and an MBA from Simon Fraser University.

    John G. Clement, PhD - Director and Chief Technical & Development Officer

    Dr. Clement possesses over twenty years of experience in pre-clinical and
clinical drug development, project management, and product acquisition. Most
recently, Dr. Clement served as director of business development at QLT Inc.,
one of Canada's largest biotechnology companies and the developer of Visudyne,
a product used to treat age-related macular degeneration. Dr. Clement has also
served as director of extramural research and associate director of
biochemical pharmacology and toxicology at Biochem Pharma Inc., which
developed the AIDS drug 3TC, as a research scientist and manager with the
Department of National Defence and as a research scientist with CIBA-Geigy
Canada Ltd. During his tenure with the Department of National Defence, Dr.
Clement held various scientific leadership/management positions and was
responsible for the development of a new antidote for nerve agent poisoning
(HI-6). Dr. Clement received a PhD in pharmacology from the University of
Western Ontario and has published over 60 peer reviewed scientific articles.

    William Jarosz, JD - Director

    William Jarosz is currently a partner at Cartesian Capital Group, LLC, a
global investment management firm. From 1997 until 2005, Mr. Jarosz served as
managing director and general counsel of AIG Capital Partners, a subsidiary of
American International Group, Inc., and as managing director of the
AIG-Brunswick Millennium Fund. While at AIG Capital Partners, Mr. Jarosz
oversaw global private equity transactions for the firm's various private
equity funds. Prior to joining AIG in 1997, Mr. Jarosz practiced law at
Debevoise & Plimpton, specializing in international private equity investment
and Russian corporate and securities laws. Mr. Jarosz has also served as a
consultant to the World Bank on the regulation of foreign direct investment in
emerging markets. Mr. Jarosz is a graduate of the University of Montana, and
received a Masters of Arts in Law and Diplomacy from the Fletcher School at
Tufts University and a Juris Doctor from Harvard Law School.

    Richard Barker, D.Phil, MA - Director

    Dr. Barker is currently the director general of the Association of the
British Pharmaceutical Industry ("ABPI"). Prior to joining ABPI, Dr. Barker
was the chairman and chief executive officer of Molecular Staging Inc.,
founder and president of New Medicine Partners, chief executive officer of
iKnowMed, chief executive officer of Chiron Diagnostics Ltd., general manager
of IBM's Worldwide Healthcare Solutions division, and leader of McKinsey &
Company's European healthcare practice. He is currently a board member of the
European Federation of Pharmaceutical Manufacturers and Associations and
council member of the International Federation of Pharmaceutical Manufacturers
and Associations. Dr. Barker also serves on the board of directors of Adlyfe
Inc., a company specializing in protein misfolding diseases. Dr. Barker's
academic background includes research in biological magnetic resonance at the
Oxford University, Leeds University and the University of Munich. He holds a
Doctorate of Philosophy in biophysics and a Master of Arts in chemistry from
Oxford University.

    W. John Meekison, BA, CIM, P. Log - Chief Financial Officer

    John Meekison has over 15 years experience as an investment banker
specializing in life sciences at Loewen, Ondaatje, McCutcheon Limited, Haywood
Securities Inc., Dlouhy Merchant Group Inc. and Pacific International
Securities Inc. As a financier, Mr. Meekison has raised equity capital for
various biotechnology companies such as StressGen Biotechnologies Corporation
(now Nventa Biopharmaceuticals Corporation), ID Biomedical Corp., Salix
Pharmaceuticals Inc., Acorda Therapeutics Inc., Inex Pharmaceuticals
Corporation, Nortran Pharmaceuticals Corp. (now Cardiome Pharma Corp.) and
BioMS Medical Corp. Mr. Meekison has also acted as chief financial officer for
Response Biomedical Corp., a TSX-listed company developing a novel clinical
diagnostic platform, and as a director for Contec Innovations Inc., a TSX
Venture-listed company. Mr. Meekison received his Bachelor of Arts from the
University of British Columbia and is a Certified Investment Manager and
Professional Logistician.

    Dr. Peter Hnik, MD, MHSc - Chief Medical Officer

    Dr. Hnik received his medical degree from the Medical Faculty of Charles
University of Prague in 1981. After practicing for several years at
university's eye clinic, where he performed surgery and provided consultation
services regarding glaucoma and neuro-ophthalmology, Dr. Hnik joined the eye
clinic at the University of British Columbia, as part of the glaucoma research
group. He received his Master of Health Sciences degree from the University of
British Columbia in 1999. Prior to joining iCo, Dr. Hnik served as associate
director of clinical research with QLT Inc., where he played a critical role
in designing and directing clinical trials for treatment of age-related
macular degeneration and diabetic retinopathy with Visudyne. He was also
heavily involved in the publication, in-licensing and pharmacovigilance
activities for Visudyne. Dr. Hnik is a member of the Association for Research
in Vision and Ophthalmology, the American Academy of Ophthalmology, the New
York Academy of Sciences, the European Society of Retina Specialists and the
Drug Information Association.

    Santa Jeremy Ono, PhD - Chief Scientific Officer

    Professor Ono, a leading authority in the fields of immunology and
ophthalmology, joined iCo as chief scientific officer in July 2005. Dr. Ono
also acts as Vice Provost for Academic Initiatives and Deputy to the Provost
at Emory University. From 2001 to 2006, Professor Ono served as the Cumberlege
Professor of Biomedical Science and as the GlaxoSmithKline Professor of Ocular
Immunology at the University College London from 2001 to 2006. Professor Ono
also served as the Chair of Immunology at the University College
London/Moorfields Eye Hospital Institute of Ophthalmology (the world's first
and largest eye research and treatment centre). Past appointments include
Assistant Professor of Medicine, Pathology & Biology at Johns Hopkins
University, and Associate Professor & Director of the Immunity, Inflammation
and Transplantation Group at the Schepens Eye Research Institute, Harvard
Medical School. Professor Ono has directed multiple research and development
programs, many of which have been in partnership with biotechnology and
pharmaceutical companies. He serves on many editorial boards, is involved with
numerous professional societies and associations, and has more than eighty
publications to his credit. Among his many honours, he was elected
International Fellow of the American Academy of Asthma, Allergy and
Immunology, Fellow of the Royal Society of Medicine, and received the
Pharmacia International Award in Allergy Research. Professor Ono received a
Bachelor of Arts from the University of Chicago, his PhD from McGill
University and was a Helen Hay Whitney Fellow at Harvard University.

    Significant Conditions to Closing

    Completion of the transaction is subject to a number of conditions
including, without limitation, approval by iCo's shareholders, approval of the
Supreme Court of British Columbia and the TSX Venture Exchange, and completion
by Beanstalk of a private placement of equity securities having a minimum
aggregate subscription price of $1,802,500. There can be no assurance that the
transaction will be completed as proposed or at all.

    Investors are cautioned that, except as disclosed in the management
information circular or filing statement to be prepared in connection with the
transaction, any information released or received with respect to the
transaction may not be accurate or complete and should not be relied upon.
Trading in the securities of a capital pool company should be considered
highly speculative.

    The TSX Venture Exchange has in no way passed upon the merits of the
    proposed transaction and has neither approved nor disapproved the
    contents of this press release.




For further information:

For further information: Rod Shier, Chief Financial Officer, Beanstalk
Capital Ltd., Telephone: (604) 682-2992 Ext. 222

Organization Profile

BEANSTALK CAPITAL LTD.

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