Canadian Medical Discoveries Fund Inc. (CMDF) and Canadian Medical Discoveries Fund II Inc. (CMDF II) today announced today that they intend to propose to the shareholders of each fund that the CMDF funds amalgamate and continue operations as Canadian Medical Discoveries Fund Inc.

The proposed amalgamation has been approved by the board of directors of each of the CMDF funds. Medical Discovery Management Corporation (MDMC), the manager of each of the funds, and the board of directors of each of the funds, believe that the proposed amalgamation is in the best interests of shareholders.

The amalgamated fund’s fundamental investment objective will be to achieve long-term capital appreciation through investment in eligible Canadian businesses engaged in the health sciences sector, with emphasis on those businesses involved in testing and development, or production and commercialization.

Shareholder meetings for each fund are scheduled to be held on November 30.

Details with respect to terms, conditions and benefits of the amalgamation will be outlined in the materials that will be provided or made available to shareholders in advance of the shareholders meetings.

Separately, the CMDF funds announced the appointment of Jove Investment Management Inc. as the investment advisor to the funds. Jove has a strong team of professionals that specialize in life sciences investment management.

The members of that team who will be dedicated to the CMDF funds include:

  • Michael Cross, MBA, Ph.D., Senior Vice President, Venture Investments, has more than 6 years of venture capital experience in life sciences.
  • Donna Parr, MA-IR, MBA, Senior Vice President, Venture Investments, has over 20 years of experience in venture capital, merchant banking, private equity, and corporate banking.
  • Hemanth J. Varghese, BSc(Hons), Ph.D., Assistant Vice President & Senior Investment Analyst.
  • Benjamin Matthews, BSc(Hons), MS, Senior Investment Analyst, recently joined Jove after spending the last four years managing a wide range of biotechnology portfolios in the University Industry Liaison Office and Technology Transfer Department at the University of British Columbia.

Change of Control of Medical Discovery Management Corp.

As previously announced, Fairway Asset Management Corp. acquired 100% of the securities of the MDMC in January 2006. Jovian Capital Corp., through a wholly owned subsidiary, acquired 100% of the Class A shares and 49% of the Class C shares of Fairway on May 9. Jovian has agreed to acquire the balance of the Class C shares of Fairway, and thereby, indirectly own 100% of the securities of the MDMC, subject to customary approvals. It is anticipated that this change of control will be completed in December 2006.

MDMC has provided the management of the CMDF funds since their inception, beginning with CMDF in 1994, and will continue to manage the CMDF Funds under the existing management agreements.