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Paladin Labs Inc. and Bioniche Life Sciences Inc. Sign Debt Refinancing and Urocidin™ Licensing Deals
, June 5, 2013
Bioniche Life Sciences Inc. (TSX: BNC) (ASX: BNC) ("Bioniche") and
Paladin Labs Inc.(TSX: PLB) ("Paladin") today announced a
comprehensive strategic collaboration to refinance and increase
Bioniche's debt, provide new equity, and enter into the first licensing
deal for Bioniche's Phase III bladder cancer product - Urocidin
Debt Refinancing and Equity
Paladin today acquired Bioniche's existing debt facility with Capital
Royalty Partners II L.P. and its affiliates for approximately $22
million (including accrued interest and prepayment penalties).
Concurrently with such acquisition, Paladin and Bioniche agreed to
enter into an amended loan transaction whereby Paladin shall provide an
additional $8 million loan to support Bioniche's ongoing operations, $5
million of which will be available upon closing of the amended loan
transaction and $3 million of which will be available upon Bioniche's
receipt of equity in the form of licensing revenue or an equity
Effective upon the closing of the amended loan transaction with Paladin,
the total loan will bear a reduced interest rate of 13.25% and will
mature on July 1, 2014 with a payment of 105% of principal due on the
sale of Bioniche's animal health business. The requirement to maintain
minimumliquid assets will be lowered from $5,000,000 to $2,500,000 immediately.
Capital Royalty will retain its 2% royalty interest on all of Bioniche's
product sales revenues.
Subject to TSX and ASX approval as part of these arrangements, Bioniche
will grant Paladin Warrants to acquire 750,000 Common Shares at the
5-day volume weighted average price on the TSX at the date of issuance
and Warrants to acquire an additional 1.25 million Common Shares
between $0.50 and $1.00 per Common Share. Bioniche may be required to
issue Warrants to acquire an additional 1 million Common Shares under
certain conditions. The Warrants shall expire on the earlier of two
years from complete repayment of the Loan Facility or May 31, 2019.
Also as part of these arrangements, Paladin has agreed to invest
$500,000 in Bioniche should Bioniche complete an equity raise by
September 30, 2013. Bioniche has committed to invest at least $3
million from the new loan and an additional $2.5 million from the
equity raise towards the development and approval of Urocidin in Canada.
Urocidin Licensing Deal
Bioniche has also agreed to grant Paladin an exclusive license to market
and distribute Urocidin for bladder cancer in Canada, South Africa and Mexico. The companies
have agreed to a net revenue sharing arrangement. Bioniche will be
responsible for all product development and manufacturing costs and
Paladin will be responsible for all sales and marketing costs in the
said territories. Further, the agreement provides that Paladin will pay
a series of potential sales performance milestones that can total up to
$16 million during the term of the agreement.
"We are pleased to have received this support from Paladin Labs, which
demonstrates their belief in our business model and in our planned
value unlocking opportunities, including the divestment of our Animal
Health business now underway," said Mr. Graeme McRae, President & CEO
of Bioniche Life Sciences Inc. "Paladin is a longstanding and very
successful Canadian specialty pharmaceutical company that will make an
important strategic partner for Bioniche in the months and years
"We are pleased to add Urocidin's novel bladder cancer therapy to our existing urology portfolio which
includes Trelstar and Testin," said Mark Beaudet, Interim CEO of Paladin Labs Inc. "Our strategic
collaboration with Bioniche allows us to continue to deploy our capital
in expectation of a solid return."
The above-noted transactions are subject to customary and other
conditions and are expected to close on or around June 14, 2013.
Urocidin is a formulation of MCC, a sterile mycobacterial cell wall-DNA complex
composition that has a dual mode of action: immune stimulation and
direct anticancer activity. UrocidinTMis formulated for the treatment of bladder cancer, where it is
administered by trans-urethral catheter directly into the bladder. The
agent is then able to directly interact with the cells of the immune
system and bladder cancer cells.
About Paladin Labs Inc.
Paladin Labs Inc., headquartered in Montreal, Canada, is a specialty
pharmaceutical company focused on acquiring or in-licensing innovative
pharmaceutical products for the Canadian and world markets. With this
strategy, a focused national sales team and proven marketing expertise,
Paladin has evolved into one of Canada's leading specialty
pharmaceutical companies. Paladin's shares trade on the Toronto Stock
Exchange under the symbol PLB. For more information about Paladin,
please visit the Company's web site at www.paladinlabs.com.
About Bioniche Life Sciences Inc.
Bioniche Life Sciences Inc. is a research-based, technology-driven
Canadian biopharmaceutical company focused on the discovery,
development, manufacturing, and marketing of proprietary and innovative
products for human and animal health markets worldwide. The
fully-integrated company employs more than 200 skilled personnel and
has three operating divisions: Human Health, Animal Health, and One
Health. The Company's primary goal is to develop and commercialize
products that advance human or animal health and increase shareholder
value. For more information, please visit www.Bioniche.com.
About Capital Royalty L.P.
Capital Royalty L.P. is a market pioneer and innovator in healthcare
investing focused on intellectual property investments in approved
products through structures including royalty bonds, secured debt,
revenue interests and traditional royalty monetizations. Capital
Royalty works directly with leading healthcare companies, research
institutions and inventors to provide customized solutions to meet
their unique financing needs. The value of each investment is based on
the future revenue of commercialized biopharmaceutical products and
medical technologies. Capital Royalty is actively making investments
through Capital Royalty Fund II, which has $805 million of committed
The firm is headquartered in Houston, Texas with offices in Boulder,
Colorado and New York City. For additional information, please visit www.capitalroyalty.com.
Bioniche Forward Looking Statement
Except for historical information, this news release may contain
forward-looking statements that reflect the Company's current
expectation regarding future events. These forward-looking statements
involve risk and uncertainties, which may cause, but are not limited
to, changing market conditions, the successful and timely completion of
clinical studies, the establishment of corporate alliances, the impact
of competitive products and pricing, new product development,
uncertainties related to the regulatory approval process, and other
risks detailed from time to time in the Company's ongoing quarterly and
Paladin Labs Forward Looking Statement
This press release may contain forward-looking statements and
predictions. These forward-looking statements, by their nature,
necessarily involve risks and uncertainties that could cause actual
results to differ materially from those contemplated by the
forward-looking statements. The Company considers the assumptions on
which these forward-looking statements are based to be reasonable at
the time they were prepared, but cautions that these assumptions
regarding the future events, many of which are beyond the control of
the Company and its subsidiaries, may ultimately prove to be incorrect.
Factors and risks, which could cause actual results to differ
materially from current expectations, are discussed in the annual
report as well as in the Company's Annual Information Form for the year
ended December 31, 2012. The Company disclaims any intention or
obligation to update or revise any forward-looking statements whether
as a result of new information or future events and except as required
by law. For additional information on risks and uncertainties relating
to these forward-looking statements, investors should consult the
Company's ongoing quarterly filings, annual report and Annual
Information Form and other fillings found on SEDAR at www.sedar.com.
SOURCE Bioniche Life Sciences Inc.