ConjuChem announces proposed plan of reorganisation and compromise

MONTREAL, May 17 /CNW/ - ConjuChem Biotechnologies Inc. (TSX: CJB) ("ConjuChem" or the "Company") announced today that the Superior Court of Quebec has issued a Creditors' Meeting Order under the Company's insolvency proceedings pursuant to the Companies' Creditors Arrangement Act (the "CCAA") authorizing the Company to convene a creditors' meeting (the "Meeting") to be held on June 11, 2010. At the Meeting, the Company will submit its proposed plan of reorganisation and compromise under the CCAA and the Canada Business Corporations Act (the "Plan") to its creditors for approval.

Pursuant to the terms of the proposed Plan, new investors will recapitalize ConjuChem by subscribing for approximately $35 million of new common shares (the "New Common Shares") which will represent the only issued and outstanding shares of the Company immediately following the implementation of the Plan. Pursuant to the Plan, the existing common shares of the Company will be exchanged for redeemable common shares which will be redeemed for a nominal amount upon the implementation of the Plan, resulting in the effective cancellation of the Company's current share capital for no consideration. Other equity securities of the Company, including outstanding options and warrants, will be cancelled. The Company's outstanding debentures will be settled in accordance with the terms of the Plan.

It is currently anticipated that approximately $7 million will be required to fund the distribution to creditors in accordance with the proposed Plan, to pay the restructuring costs incurred by ConjuChem and to pay certain claims which will not be affected by the Plan. This distribution will be funded with ConjuChem's cash on hand and receivables, which are estimated to be approximately $2 million at the time of the implementation of the Plan, and a portion of the subscription proceeds from the issuance of the New Common Shares. The balance of the subscription proceeds, being approximately $30 million, will be used to provide funding for the Company's continued research and development programs, for working capital and general corporate purposes following the implementation of the Plan and ConjuChem's contemplated emergence from protection under the CCAA, and to pay the expenses relating to the issuance of the New Common Shares.

About ConjuChem

ConjuChem, developer of next generation medicines from therapeutic peptides, is creating long-acting compounds based on bioconjugation platform technologies. When applied to peptides, the Company's systemic PC-DAC(TM) Technologies enable the creation of new drugs with significantly enhanced therapeutic properties as compared to the original peptide.

The Company has two major development programs: PC-DAC(TM):Exendin-4, a GLP-1 agonist in Phase II for the treatment of Type II diabetes and PC-Insulin, a long-acting basal insulin in preclinical testing.

Detailed descriptions of the Company and its technologies can be viewed on the Company's website

Forward-Looking Statements

Some of the statements made herein may constitute forward-looking statements. These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause ConjuChem's actual results, performance or achievements to be materially different from those expressed or implied by any of the Company's statements, as further described in ConjuChem's Management's Discussion and Analysis of Financial Condition and Results of Operations for the quarter ended January 31, 2010. Actual events or results may differ materially. We disclaim any intention, and assume no obligation, to update these forward-looking statements.


For further information: For further information: Mark Perrin, President and CEO, ConjuChem Biotechnologies Inc., (514) 844-5558 ext 311,; James Smith, Investor Relations, (416) 815-0700 ext. 229, (416) 815-0080,

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