September 28, 2011 at 18:28 PM EDT
Afexa Provides Update on Takeover Offers and ASC Decision on Shareholder Rights Plans

EDMONTON, ALBERTA--(Marketwire - Sept. 28, 2011) - Afexa Life Sciences Inc. ("Afexa" or the "Company") (TSX:FXA) - the maker of COLD-FX(R) - announced today that Paladin Labs Inc. ("Paladin") has amended its offer for any and all of the common shares of Afexa (the "Amended Paladin Offer") by way of a Notice of Variation and Extension dated September 26, 2011. Under the Amended Paladin Offer, holders of common shares can elect either $0.81 per share in cash or 0.0217 of a Paladin share for each common share of Afexa. The Amended Paladin Offer is subject to the same conditions as the original offer by Paladin mailed to Afexa shareholders on August 10, 2011, except that it is also a condition of the Amended Paladin Offer that no increase shall have been made to the "Termination Fee" as defined in the acquisition support agreement (the "Support Agreement") dated August 30, 2011 among Afexa, Valeant Pharmaceuticals International, Inc. ("Valeant") and 1625907 Alberta Ltd. and Valeant shall not benefit from any additional "break" or termination fees under any other similar agreement with Afexa. The Amended Paladin Offer expires at 8:00 p.m. (Toronto time) on October 7, 2011.

On September 26, 2011, Valeant announced that it intends to increase its takeover offer for Afexa to $0.85 per common share, subject to Afexa's agreement to certain amendments to the Support Agreement. Given the announcement by Valeant, the Afexa Board of Directors recommends that Afexa shareholders take no action to tender their common shares to the Amended Paladin Offer.

Prior to Paladin formally issuing its Notice of Variation and Extension, the Alberta Securities Commission (the "ASC") ordered on September 26, 2011 that all rights issued pursuant to Afexa's two shareholder rights plans (the "Rights Plans") be cease traded at 12:01 a.m. on September 30, 2011, the day after the "go-shop" period under the Support Agreement ends. In the circumstances, the principal effect of the ASC order is that on and after September 30, 2011 any acquisitions of Afexa common shares by Paladin pursuant to its take-over bid or through market purchases will no longer be restricted by the Rights Plans.

About Afexa Life Sciences Inc. (TSX:FXA)

Afexa Life Sciences Inc., founded in 1992, strives to deliver the most trusted health brand on the planet through pioneering evidence-based natural medicines that empower people to achieve their health potential. The Company's patented ChemBioPrint(R) discovery and standardization technology enables the development of effective and safe medicines from complex natural sources, while ensuring reliable health benefits and batch-to-batch consistency. COLD-FX(R), a ChemBioPrint product, is the Company's flagship product and Canada's leading over-the-counter (OTC) cold and flu remedy. It is officially indicated in Canada to help reduce the frequency, severity and duration of cold and flu symptoms by boosting the immune system. COLD-FX has a product license (NPN) and is supported by scientific evidence, including randomized, double-blind, placebo-controlled clinical trials. The Company recently launched COLDSORE-FX in Canada and has a range of polymolecular drugs at various clinical and pre-clinical development stages. This product pipeline includes COLD-FX pediatric, AFX-2 for Chronic Lymphocytic Leukemia, Dilexaponan for cholesterol management, HT-1001 for Oxidative Stress and a product for blood glucose management.

Advisory Regarding Forward-Looking Statements

This news release contains forward-looking information (as defined in the Securities Act (Alberta)) that is based on expectations, estimates and projections as of the date of this news release. These forward-looking statements can often, but not always, be identified by the use of forward-looking terminology such as "plans", "predicts", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases, or statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved.

Examples of such forward-looking statements in this news release include, but are not limited to, and whether or not Valeant will come forward with an enhanced bid.

Actual results and developments (including earnings and cash flow) are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this news release.

Forward-looking statements contained in this news release are based on a number of assumptions that may prove to be incorrect, including, but not limited to expectations that Valeant may amend their takeover offer, expectations related to future sales of commercialized products, the timing, duration and results of clinical trials, the timing and results of regulatory reviews, the safety and efficacy of Afexa's product candidates and the indications for which Afexa's product candidates might be developed; competitive conditions in the life sciences and technology industry; general economic conditions; changes in laws, rules and regulations applicable to Afexa.

In addition to being subject to a number of assumptions, forward-looking statements in this news release involve known and unknown risks, uncertainties and other factors that may cause actual results and developments to be materially different from those expressed or implied by such forward-looking statements, including the risks identified in the filings by Afexa with the Canadian provincial securities regulatory authorities, including Afexa's annual information form for the fiscal year ended March 31, 2011.

The Company believes that the expectations reflected in the forward-looking statements contained in this news release are reasonable as at the date hereof, but no assurance can be given that these expectations will prove to be correct. In addition, although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Accordingly, you should not place undue reliance on any forward-looking statements contained in this news release.

Shareholders are encouraged to contact Georgeson Shareholder Communications Group Inc., the information agent retained by Afexa, North American toll free at 1-866-676-3005 or via e-mail at askus@georgeson.com for any questions related to the takeover situation.

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