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NORTHFIELD LABORATORIES INC.
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AT NORTHFIELD LABORATORIES: AT FRB | WEBER SHANDWICK:
Steven A. Gould, M.D. Lisa Fortuna Cindy Martin
Chief Executive Officer Investors Media
(847) 864-3500 (312) 640-6779 (312) 640-6741
FOR IMMEDIATE RELEASE
FRIDAY, AUGUST 30, 2002
NORTHFIELD SENDS CEO LETTER TO SHAREHOLDERS
EVANSTON, ILLINOIS, AUGUST 30, 2002 - NORTHFIELD LABORATORIES INC. (NASDAQ/NMS:
NFLD), a leading developer of an oxygen-carrying blood substitute for trauma and
elective surgery situations, today distributed the following letter to
shareholders from Dr. Steven A. Gould, Northfield's Chairman and Chief Executive
Officer:
Dear Fellow Shareholder:
Part of my mandate, upon assuming the office of Chief Executive
Officer, was to ensure that Northfield shareholders were informed about, and had
the opportunity to participate in, our vision of the company. As you know, we
have sent you a number of mailings in connection with our Annual Meeting. Since
I became CEO, I have also been engaged in a large number of personal
conversations with many of our loyal but frustrated shareholders. The essential
question I have been asked again and again is, "Why should I vote for you and
the other Board nominees, and what will you do to enhance shareholder value?"
The future success of Northfield is entirely dependent upon our ability to bring
PolyHeme(TM) to market. FIRST AND FOREMOST WE MUST RESOLVE OUR REGULATORY
SITUATION WITH THE FDA. Once the FDA and Northfield have reached a consensus
about the appropriate next steps, the company can aggressively move forward to
raise additional funds and secure a strategic partnership. IT IS NAIVE AND
UNREALISTIC TO BELIEVE THAT A POTENTIAL PARTNER WHO COULD ADD VALUE TO
NORTHFIELD WOULD BE WILLING TO COMMIT TO A MAJOR BUSINESS COMBINATION BEFORE
RESOLUTION OF OUR FUTURE REGULATORY PATH.
I would like to take this opportunity to again detail the important
facts about the status of PolyHeme and its implications for Northfield which
previously appeared in our Annual Report. I believe that this will help you
understand why it is so important to support your Board and its nominees at this
critical juncture.
REGULATORY STATUS
In August 2001, we submitted our Biologics License Application to the Food and
Drug Administration seeking approval to market PolyHeme for use in the treatment
of urgent, life-threatening blood loss. This was a significant milestone for
Northfield, representing the culmination of 16 years of product development,
clinical studies and data analysis. It was also a landmark event for the
industry, because it was the first BLA for a blood substitute for human use in
the United States. The decision to submit the BLA was based on the demonstration
that PolyHeme supported life in seriously injured, bleeding patients and
significantly improved survival in situations when blood could not be used. We
were aware that despite the compelling outcomes, there would be regulatory
hurdles. PolyHeme is an innovative product, with no precedent to provide
guidance for the FDA. The history of safety concerns for other blood substitutes
as well as other highly visible product recalls added a considered and
understandable degree of caution. However, we felt the BLA submission was
appropriate.
In November 2001, the FDA issued a refusal to file letter with respect to our
BLA filing. Based on our discussions with the FDA, we have learned that many of
the agency's concerns are focused on the perceived broad nature of the proposed
indication for the use of the product, the validity of the historical control
group and the actual trial design itself. These concerns reflect the fact that
our studies were not designed as a classical registration trial using a
randomized, prospective, double-blinded design, but rather a trial under
conditions involving real life, unplanned, life-threatening blood loss
simulating situations in which no alternative treatment is available. The
ethical and logistic considerations involved in this environment did not allow
us to use a traditional approach to trial design. The endpoint in the trial was
patient survival, and the use of PolyHeme led to a dramatic improvement over the
predicted survival based on historical data. We believe the strength of the data
justified our BLA submission.
We have had numerous recent meetings and follow-on discussions with the
FDA. We have described in great detail the patients and settings in which
PolyHeme would and would not be used. We have presented additional information
regarding the historical controls, and have also submitted other data that we
believe validate the control group. We have also discussed the challenges of the
traditional trial design for our proposed indication. Our dialogue has been
instructive and encouraging, although it is possible that additional trials will
still be necessary. We are striving to reach a consensus as quickly as possible
in order to move forward to regulatory approval for PolyHeme and resolve the
uncertainty that currently exists.
FUNDING
It is clear that we will need additional funding in the future. Clarity and
certainty regarding our regulatory status are essential to positioning ourselves
to move rapidly and effectively to raise money in the capital funds markets when
the climate on Wall Street becomes more favorable. This has been a tumultuous
year for the market, but we want to
be poised to access new capital when the market normalizes. In the meantime, as
of May 31, 2002 we had $18.4 million in available cash, which should support our
on-going operations for at least 18 months.
PARTNERSHIP
Over the course of PolyHeme's development, we have had discussions with several
large pharmaceutical companies that have expressed strong interest in partnering
with Northfield. We believe a partner with experience in the surgical and
critical care areas would be an excellent strategic fit. The right partner would
add expertise in the areas of marketing, regulatory affairs and manufacturing
and enhance the likelihood of successful commercialization of PolyHeme. As is
the case with fund raising, clarity and certainty regarding our regulatory
status are essential in order to secure a world-class partner on attractive
terms for our shareholders.
In summary, we have been engaged in what we believe is a constructive dialogue
about exactly what information the FDA will require and how Northfield should
provide it. We hope to reach a consensus with the FDA in the near future.
In the meantime, I am fully committed to making Northfield accessible and
responsive to all current and future shareholders. We will continue to keep you
apprised of important developments as they occur. I am asking you for your vote
on the BLUE proxy card to help us realize Northfield's potential.
Thank you for your continued support.
Steven A. Gould, M.D.
Chairman and Chief Executive Officer
REMEMBER--ONLY YOUR LATEST DATED PROXY COUNTS!
If you have already voted a White proxy card in error, you have every legal
right to change your vote by signing and returning a later-dated
BLUE proxy card today.
To ensure that your vote is counted for Northfield's director nominees, do
NOT sign any White proxy card sent to you by C. Robert Coates, even to
withhold your support for the Coates nominees. Simply discard the White card.
If you have any questions or need assistance in voting your shares, please call:
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INNISFREE M&A INCORPORATED
501 Madison Avenue, 20th Floor
New York, New York 10022
Call Toll-Free: (888) 750-5834
Banks and Brokers call collect (212) 750-5833
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Statements in this release that are not strictly historical are
"forward-looking" statements that are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve known and unknown risks, which may cause the
company's actual results in the future to differ materially from expected
results. These risks include, among others: competition from other blood
substitute products; the company's ability to obtain regulatory approval to
market PolyHeme commercially; the company's and/or its representative's ability
to successfully market and sell PolyHeme; the company's ability to manufacture
PolyHeme in sufficient quantities; the company's ability to obtain an adequate
supply of raw materials; the company's ability to maintain intellectual property
protection for its proprietary product and to defend its existing intellectual
property rights from challenges by third parties; the availability of capital to
finance planned growth; and the extent to which the hospitals and physicians
using PolyHeme are able to obtain third-party reimbursement, as described in the
company's filings with the Securities and Exchange Commission.