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Executive Summary

CYTOGEN SEEKING $ 35 MIL.-$ 42 MIL. FOR PROSTATE AND BLADDER CANCER R&D covering both therapeutics and diagnostic imaging products through the establishment of a new company, CytoRad. In a preliminary prospectus filed with the Securities & Exchange Commission on Dec. 10, Cytogen has proposed to offer 3.5 mil. units consisting of one callable share of CytoRad common stock and one warrant to buy a share of Cytogen common. The units are expected to be priced at $ 10-$ 12 apiece. The offering, which is expected to begin in January, is being underwritten by Merrill Lynch and Lehman Brothers. With the proceeds from the offering, CytoRad will "engage" Cytogen to develop prostate cancer and bladder cancer products. The R&D funding, the prospectus states, is expected to be targeted at four antibody-based delivery system products: OncoRad PR356, a prostate cancer therapy; OncoScint PR356, a prostate cancer imaging product; OncoRad BL372, a bladder cancer therapy; and OncoScint BL372, a bladder cancer imaging product. OncoRad PR356 is forecast to enter Phase I trials in 1992. The product delivers the radioisotope yttrium-90 to prostate cancer cells "using the same antibody and linker" as the prostate cancer imaging product OncoScint PR356, the prospectus says. The imaging product targets the radioisotope indium-111 to cancer cells. OncoScint PR356 is currently in Phase II and is expected to enter Phase III clinicals "in the first half of 1992," according to the prospectus. The bladder cancer products are further back in the pipeline. OncoRad BL372 is "expected" to deliver the radioisotope yttrium-90 to bladder cancer cells. The prospectus predicts that preclinical development will commence in "early 1992." The imaging agent OncoScint BL372, which also has not reached preclinical development, will target indium-111 to cancer cells. The same proprietary antibody-based delivery systems are used in Cytogen's other cancer products. Cytogen recently told the New York Society of Securities Analysts that it projects early 1992 launches for its first products in the U.S. -- OncoScint diagnostic imaging agents for colorectal and ovarian cancers ("The Pink Sheet" Nov. 25, T&G-7). Princeton, N.J.-based Cytogen also commented to the analysts about the company's plans to use the imaging products as a platform to establish a cancer therapy business beginning in 1995-1996. If the CytoRad funding shell offering is successful, CytoRad units would trade on the NASDAQ through Jan. 31, 1994 after which the CytoRad shares and Cytogen warrants would trade separately. Cytogen has the option through Jan. 31, 1997 to acquire all of CytoRad's common stock at specified prices. Assuming an IPO price of $ 11 a unit, the option price escalates during the exercise period from $ 21.48 per share prior to Jan. 31, 1995, up to $ 29.07 from Feb. 1, 1995 to Jan. 31, 1996, and to $ 40.84 per share from Feb. 1, 1996 to the end of the option period.

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