Xechem International Achieves Another Milestone: Receives Approval of US $9.38 Million Funding
Published: May 21, 2007
In October 2006, EX-IM Bank, the official credit export agency of the United States, had approved a Comprehensive Credit Guarantee to support the loan, subject to the condition that Xechem Nigeria obtains supporting guarantees from two suitable local banks. Diamond Bank Plc and Platinum Habib Bank Plc, both headquartered in Nigeria, have issued the required guarantees, paving the way for finalization and funding of the UPS loan. Personal guarantees were also provided to these banks by Dr. Ramesh C. Pandey, Chairman & CEO of Xechem International, Inc. and Xechem Pharmaceutical Nigeria Ltd., and two Nigerian Board members, Dr. Adesoji Adelaja (also a Xechem International Board Member) and Mr. Isaac Inyang. The loan is for a five year term, bearing interest at LIBOR plus 2.75% and requires semi annual reductions of principal at 10% per period, together with payment of accrued, unpaid interest.
Funds Earmarked for Equipment, Corporate Offices and Manufacturing Facility
The funds provided by UPS Capital under the EX-IM guaranteed loan will be used to purchase the U.S. manufactured pre-fabricated corporate offices, warehouse, plant equipment and machinery needed by Xechem Nigeria to establish a state-of-the-art facility in the outskirts of Abuja, Nigeria, which is slated for completion during the fourth quarter of this year. The UPS loan is in addition to a separate loan of N350 Million Naira (approximately $2.7 million US Dollars) made in April 2007 to Xechem Nigeria by the Nigerian Export-Import (NEXIM) Bank for construction of manufacturing facility related costs, which supplements the N150 Million Naira (approximately US $1,157,000) of funds previously advanced by NEXIM. The expanded facility, once completed, will enable Xechem Nigeria to produce commercial scale quantities of NICOSAN(TM), Xechem's breakthrough medicine for the prophylactic management of Sickle Cell Disease (SCD).
"We are very pleased that all of the pieces to the approval and funding of this long awaited EX-IM guaranteed loan have finally come together," commented Dr. Ramesh C. Pandey, Chairman and CEO of Xechem Companies. "We can now turn our full attention to realizing our dream of completing the state-of-the-art laboratories and a cGMP production facility in Nigeria which will help us in the production of commercial scale quantities of NICOSAN(TM) to meet the needs of the millions of people afflicted with this terrible disease."
Dr. Pandey added, "We are very grateful to EX-IM Bank, UPS Business Credit, Diamond Bank and Bank PHB for their strong support for this important project and for helping us make the dream a reality. I am especially grateful to our consultants Financialbridge, Inc. and Mr. Isaac Inyang for their tireless efforts in seeing this through to a successful conclusion."
NICOSAN(TM) is an anti-sickling drug originally researched by the scientists at the National Institute for Pharmaceutical Research and Development (NIPRD) in Abuja, Nigeria. In clinical studies conducted under NIPRD's auspices, the drug showed substantial reduction in the degree of sickling of the red blood cells of those afflicted with the disease. While not a cure, the clinical trials have confirmed that the large majority of patients taking NICOSAN(TM) no longer experience sickle cell "crises" while on the medication, and even among those whose crises are not eliminated, the number and severity of the crises are substantially reduced. Through quality control/quality assurance (QC/QA) Xechem has standardized and verified the antisickling activity of the product, which is now called as NICOSAN(TM).
After the approval by the regulatory agency of Nigeria, National Agency for Food and Drug Administration and Control (NAFDAC), NICOSAN(TM) is being marketed in Nigeria since July 6th, 2006 on a limited basis. NICOSAN(TM) has Orphan Drug Designation in the US and EU countries.
Xechem International is a development stage biopharmaceutical company with expertise in developing drugs for Sickle Cell Disease (SCD), antidiabetic, antimalarial, antibacterial, antifungal, anticancer and antiviral (including AIDS) products from natural sources, including microbial and marine organisms. Its focus is on the development of proprietary technologies, including those used in the treatment of orphan diseases and phyto-pharmaceuticals (natural herbal drugs). Xechem's mission is to bring relief to the millions of people who suffer from these diseases. Its recent focus and resources have been directed primarily toward the development and launch of NICOSAN(TM) (to be marketed as HEMOXIN(TM) in the US and Europe). With the Nigerian regulatory approval now in hand, Xechem is now working on the commercialization of the drug in Nigeria and the pursuit of US FDA and European regulatory approval. In addition to NICOSAN(TM), Xechem is also working on another sickle cell compound, 5-HMF, which it has licensed from Virginia Commonwealth University (VCU).
Forward Looking Statements
This press release contains certain forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended, which are intended to be covered by safe harbors created hereby. Such forward-looking statements involve known and unknown risks and uncertainties. Such risks include the risk that: (i) there could be delays and/or cost overruns in connection with the build out of Xechem Nigeria's pilot plant facility to a full scale commercial production facility; (ii) there can be no assurances that Xechem Nigeria will be successful in its production or marketing of Niprsan (iii) the Company and/or Xechem Nigeria could suffer significant dilution from the raising of additional capital until such point in time as they achieve cash flow break even status, if at all; (iv) doing business in Nigeria is subject to all of the risks of operation in a foreign country and associated political and regulatory risks; and (v) operations of the Company could be disrupted due to the chronic limited availability of funds to meet ongoing obligations.
Contact: Xechem H. Scott English, 732-247-3302 Director, Investor Relations
Source: Xechem International, Inc.