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Major Strategic Transactions at Theratechnologies - Reorganization, US
Acquisition and $60 Million in Equity Financing Related to its Cell Therapy
Program

     SAINT-LAURENT, Quebec, June 21 /PRNewswire/ - Theratechnologies (TH:
TSE)has announced today major strategic transactions related to its cell
therapy activities. These transactions, aimed at enhancing the value of the
Company's assets, consist in the reorganization of its business activities
through the transfer of its ex vivo photodynamic cell therapy program to
its newly created subsidiary, Celmed BioSciences, the acquisition of
NeuroGeneration and NeuroGenomics, two California corporations which have
developed technologies for the treatment of neurodegenerative diseases, and
investments totaling $60 million by Societe generale de financement du
Quebec (SGF) and the Solidarity Fund QFL.
     Dr. Michel F. Levesque, founder of NeuroGeneration and now Vice
President, Medical Affairs with Celmed BioSciences, has been authorized by
the FDA to conduct a phase II clinical trial for Parkinson's disease, using
cell therapy derived from autologous neural stem cells. This will be the
first study of its kind in the world evaluating the benefits of autologous
cell therapy for this disease.
     Celmed BioSciences represents a global value of $203 million. The new
subsidiary combines a technological transfer from Theratechnologies
estimated at $125 million, making Theratechnologies its major shareholder
(61.6%), and the acquisition of NeuroGeneration and NeuroGenomics for a
total consideration of $18 million (8.8%), paid in shares of Celmed. The
SGF and the Solidarity Fund QFL have invested $30 million each (14.8%
equity respectively) for a total of $60 million. The transaction includes
an incentive to render Celmed a public company and is structured in such a
way that Theratechnologies can buy back the shares of its partners. For
this purpose, Theratechnologies has
issued to the Solidarity Fund, the SGF and Dr. Michel F. Levesque a total
of 4,680,000 warrants at a price varying between $14.30 and $24.17 and
having a maximum exercise term of two years. These warrants will be earned
in their totality only if Theratechnologies exercises its purchase right to
the shares of its partners in Celmed or in part if Celmed does not become a
public corporation.
     "The creation of Celmed BioSciences and the investment by strategic
institutions provide Theratechnologies with the necessary critical mass to
emerge at the international level in the field of cell therapy as well as
therapeutic peptides," said Dr. Andre de Villers, President and Chief
Executive Officer of Theratechnologies.
     Further to these transactions, Celmed BioSciences, Theratechnologies'
new subsidiary, will rank among the leaders in cell therapy. With sizeable
financial resources, it will be poised to play a key role in this area.
Celmed already has an experienced team of 40 scientists and managers.
Moreover, Theratechnologies has started recruiting prominent scientists
from the best research centers in North America to join Celmed's work
force. The implementation of Celmed's strategic business plan will require
a significant increase in the number of its employees over the next two
years. Celmed BioSciences' head office will be located in Saint Laurent, in
the Montreal area, and it will also have facilities in Los Angeles. For
Theratechnologies,
the new subsidiary will provide a gateway to the American market.
     Fostered by several major scientific discoveries in recent years, cell
therapy will develop rapidly. Serious blood and neurodegenerative diseases
baffling traditional pharmacological approaches will be treated with cell
therapy, which will charter new territories until now inaccessible. It is
forecasted in the United States alone that the cell therapy market will
grow to $1.25 billion US in 2005, from $131 million US in 2000. The US
market usually represents 40% of the world market.
     Theratechnologies has acquired extensive know-how in the field of cell
therapy, notably stem cells, with the development of Theralux(TM), its ex
vivo photodynamic treatment for cancers invading bone marrow, cases of
graft-versus-host disease (GvHD) and certain autoimmune diseases. The
Company is currently conducting a phase I/II clinical trial with respect to
chronic myeloid leukemia as well as a pivotal trial on non-Hodgkin lymphoma
at Maisonneuve-Rosemont Hospital in Montreal. Preclinical work is also
under way at Duke University Medical Center, North Carolina, for the
validation of the technology in GvHD.
     Celmed BioSciences is acquiring NeuroGeneration, a company founded by
Dr. Michel Levesque, a neurosurgeon at the Cedars-Sinai Medical Center in
Los Angeles. NeuroGeneration develops cell therapy approaches for central
nervous system diseases which are otherwise irreversible or endanger
patients' lives.
It has been discovered in recent years that neural cells can be
regenerated. NeuroGeneration has developed proliferation and
differentiation technologies for neural stem cells. NeuroGeneration will
proceed with a phase II clinical trial involving 12 patients suffering from
Parkinson's disease. According to statistics, more than 500,000 people are
affected by Parkinson's disease in the United States. A major benefit of
NeuroGeneration's approach consists in using the patient's own cells and
culturing them in order to obtain a sufficient amount of the required cell
types for the treatment. These cells are then given back to the patient
(autologous graft). NeuroGeneration's approach could be used in the case of
spinal cord injuries and conditions affecting the central nervous system,
notably stroke, Huntington's disease and
Alzheimer's disease.
     The Minister of State for Regions and Minister of Industry and Trade
in Quebec, Gilles Baril, says: "Celmed is created by a company in a field
of expertise unique to Quebec, doubled by an international leader. I
believe the decision made by SGF Health to join its partner
Theratechnologies in this new venture is an excellent one and that Quebec
will benefit from this."
     The President and COO of SGF Health, Francis Bellido, is proud to
reinforce the partnership with Theratechnologies: "This new company will
add value to an innovative technological platform in the emerging market of
regenerative medicine. Our participation in this project gives us another
opportunity to get actively involved in making Quebec a knowledge-based
society."
     "This investment is consistent with the direction the Solidarity Fund
QFL has taken since the '90s, when it asserted its leadership by becoming
the first major investor to believe in the potential of the biotech
sector," explained Fund president and CEO Raymond Bachand. "Headed by
Jean-Denis Dubois, the Fund's Biotechnology and Health Sciences Fund is
just about the only one of its kind in Quebec and Canada to offer
multidisciplinary expertise. The Fund is one of the main investors in
Quebec biotech SMEs, with a portfolio valued at over $300 million spread
across some 40 companies," added Mr. Bachand. "Theratechnologies is one of
our 1,600 partner companies in
which we invested $5 million in April 2000."
     With net assets in excess of $4.1 billion, the Solidarity Fund QFL is
an investment fund that relies on the savings of Quebecers, primarily
through its RRSPs, to help create and maintain jobs in Quebec-based
companies and to further Quebec's economic growth. The Fund currently has
more than 432,000 shareholders and to date has helped, on its own or with
other financial partners, to create, preserve or maintain over 90,000 jobs.
(http://www.fondsftq.com)
     SGF Sante Inc. is a subsidiary of the Societe generale de financement
du Quebec whose mission is to carry out economic development projects
meeting normal profitability requirements, in collaboration with business
partners. Since it was restructured in 1998, SGF has generated investments
of about $4.4 billion, creating over 19,400 direct and indirect jobs in the
operating phase, not counting the thousands of jobs created during the
construction phase. As at September 30, 2000, SGF's consolidated assets
totalled $2.2 billion. SGF has 52 international partners operating in
Quebec.(http://www.sgfqc.com)
     Theratechnologies is a Canadian biopharmaceutical company involved in
the fields of therapeutic peptides and cell therapy. The cell therapy axis
is now entrusted to Celmed BioSciences. Theratechnologies' peptide axis
includes ThGRF (TH 9507), a growth hormone-releasing factor analogue for
the treatment of muscle wasting and sleep disorders; LAP (long-acting
peptides), a stabilization method for peptides and ExoPep, a process for
the rapid discovery of G protein-coupled receptors.
     Theratechnologies is listed on the Toronto Stock Exchange (TH)
(http://www.TSE.com). For additional information: http://www.theratech.com



SOURCE Theratechnologies Inc.

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