Migenix to reorganize and get non-dilutive financing

Migenix (TSX:MGI) has entered into a plan of arrangement with Madison Pacific Properties (TSX:MPC.C) to reorganize the drug developer, with Madison injecting $4 million into Migenix.

Under the plan, Migenix will transfer all of its operations and proceeds of the new financing to BioWest Therapeutics, a new subsidiary that intends to retain Migenix’s listing on the TSX.  All shares of Migenix will be exchanged for shares of BioWest.

Following the transaction, the Migenix shell company will hold its tax-loss carry-forwards and Madison will own 39.5% of Migenix’s common shares and all of the non-voting shares. Migenix also will change its name to Metro Vancouver Properties Corp. and focus on the real estate business.

The transaction will enable BioWest to “substantially strengthen” its cash position to further pursue development of its lead product Omigard, CEO Paul Brennan said in a statement.

The plan of arrangement is subject to shareholder approval.  Migenix directors, who together hold 12.4% of the common stock, plan to vote in favour of the proposal.