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Strategic Review Results in $100MM Investment by Equity Group Investments;
Experienced Commercial Executive Management Team Appointed;
Preparing for Potential MOXATAG Launch in the First Half of 2009
GERMANTOWN, Md., July 1 /PRNewswire-FirstCall/ — MiddleBrook Pharmaceuticals, Inc. , a pharmaceutical company focused on developing and commercializing novel anti-infective products, today announced that its Board of Directors has completed its previously announced review of strategic alternatives and has entered into an agreement with Equity Group Investments, L.L.C. (EGI) for a $100 million equity investment in the Company. As part of the agreement, a new, commercially-focused senior management team will be appointed. Proceeds from the transaction will allow MiddleBrook to move forward with the commercial launch of its once-daily MOXATAG(TM) product, and to continue the development of its clinical pipeline.

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As part of the agreement with EGI, Edward M. Rudnic, Ph.D. will step down from his current position as MiddleBrook’s President and CEO and will be replaced by John Thievon, effective upon the closing of the transaction. In addition, David Becker has been appointed as MiddleBrook Executive Vice President, Finance and CFO, replacing Robert C. Low as MiddleBrook’s principal financial officer, also effective upon the transaction closing. Dr. Rudnic and Mr. Low will continue to serve as consultants to the Company following the closing.
Mr. Thievon brings more than 17 years of pharmaceutical sales and marketing experience to MiddleBrook, and will be responsible for the successful launch and commercialization of MOXATAG Tablets and the continued development of the Company’s other PULSYS(R) pipeline products. Most recently, Mr. Thievon was Executive Vice President, Sales and Corporate Accounts for Adams Respiratory Therapeutics (Adams). While with Adams, Mr. Thievon launched the Mucinex(R) brand and built the Mucinex franchise into more than $350 million in annual revenue. Mr. Thievon left Adams in February 2008, following its acquisition by Reckitt Benckiser.
Mr. Becker was also a former senior executive at Adams, where he was Chief Financial Officer from 2000-2007. He completed Adams’ initial public offering in 2005, and was appointed Chief Financial and Administrative Officer in 2007. Mr. Becker has 18 years of public accounting, mergers and acquisitions, and corporate finance experience, and will be responsible for all of MiddleBrook’s finance and operating activities.
Several changes to the Board of Directors will result from the agreement with EGI. Dr. Rudnic will depart from the MiddleBrook board, effective upon the transaction closing. At closing, William C. Pate, Managing Director at EGI; Mark Sotir, Managing Director at EGI; and John Thievon will join the current Board, which will be expanded to nine members.
“We are very pleased to have completed this agreement with Equity Group, and believe it provides MiddleBrook with both the financial resources and the operational management expertise to make our FDA-approved MOXATAG product a commercial success,” stated R. Gordon Douglas, M.D., MiddleBrook Chairman of the Board. “With our strategic review now concluded, we look forward to focusing the Company’s initiatives on successfully executing its operating plan.”
“Additionally, with the forthcoming departure of Ed Rudnic, I would like to join the Company’s employees and all its shareholders in expressing my profound gratitude for his contribution in creating MiddleBrook, its intellectual property, and in leading the team to the successful approval of MOXATAG,” Dr. Douglas continued. “Ed’s leadership, vision, and proven entrepreneurial achievements will continue to serve MiddleBrook well following his departure, and we wish him the best in his future endeavors. The current Board of Directors looks forward to working closely with MiddleBrook’s new executive management team in driving MOXATAG to the market. We are all very focused and eager to present MOXATAG to the market and to communicate its unique benefits of improved convenience and likely enhanced patient compliance to the healthcare community.”
Investment Terms
MiddleBrook announced today that it entered into a definitive securities purchase agreement with EGI for the sale of 30,303,030 shares of its common stock at $3.30 per share and a five-year warrant to purchase a total of 12,121,212 shares of common stock at an exercise price of $3.90 per share. EGI’s investment totals approximately $100 million.
In connection with the transaction, MiddleBrook has agreed to repurchase its Keflex assets previously sold to funds affiliated with Deerfield Management in November of 2007, contemporaneously with the closing of the transaction. The Company will reacquire the Keflex assets as well as its ongoing royalty obligations to Deerfield for approximately $11 million. Additionally, as a result of the EGI transaction, MiddleBrook will redeem the 3.0 million warrants issued to Deerfield in conjunction with the Keflex asset sale for a total of $8.8 million.