BELLEVILLE, Ontario, May 3 /PRNewswire-FirstCall/ -- Bioniche Life Sciences Inc. (TSX: BNC - News), a research-based, technology-driven Canadian biopharmaceutical company, today announced that it has entered into a definitive agreement to sell its proprietary sodium hyaluronate product, Cystistat®, to Bioniche Teoranta of County Galway, Ireland, for $10 million Cdn. Bioniche Teoranta is part of the Bioniche Pharma Group, which was sold by Bioniche Life Sciences to an investor group led by RoundTable Healthcare Partners earlier this year. Bioniche Pharma manufactures and distributes sterile injectable products from a cGMP manufacturing facility in Ireland. The transaction is subject to potential post-closing downward adjustments to a maximum of 8% of the purchase price. It is expected to close by mid-May.
$2 million U.S. of the proceeds will be used to repay Bioniche Life Sciences’ convertible term note to Laurus Master Funds, leaving Bioniche with a net balance of $5 million U.S. of convertible term debt and $3.5 million U.S. of operating debt. There is no penalty attached to this repayment. As well, Bioniche has agreed to issue 150,000 five-year warrants to Laurus, exercisable at the trading price for Bioniche Life Sciences’ common shares at closing (but not less than $ .96/share Cdn.), subject to regulatory approvals.
In addition, approximately $1.6 million U.S. will be used to acquire additional ordinary shares of Bioniche Pharma Holdings Limited -- the entity which purchased the Bioniche Pharma Group from Bioniche Life Sciences -- with the result that Bioniche Life Sciences will maintain its 10% ownership interest in Bioniche Pharma Holdings.
The balance of the proceeds from the sale of Cystistat (approximately $5.9 million Cdn.) will be used for working capital and to initiate the Company’s Phase III clinical trials using its proprietary Mycobacterial Cell Wall-DNA Complex (MCC) for the treatment of bladder cancer, trademarked Urocidin. Two Phase III trials have been approved by the U.S. Food and Drug Administration (FDA) and patient enrolment is expected to begin by mid-2006.
“The sale of Cystistat is part of our corporate strategy to focus our resources and energy on our key strategic priorities, including the Phase III trials for Urocidin (MCC) in bladder cancer and the licensing of our E. coli O157:H7 cattle vaccine, which is in the U.S. regulatory pathway,” said Graeme McRae, President & CEO of Bioniche Life Sciences Inc. “Our robust research and development and commercialization capabilities enable us to capitalize on proprietary technologies in a variety of ways to maximize value for our stakeholders.”
About Cystistat
Cystistat is made from sodium hyaluronate (hyaluronic acid), one of the Company’s platform technologies. Cystistat is indicated for the temporary replacement of the glycosaminoglycan (GAG) layer in the bladder. There is evidence that the GAG layer of the bladder is deficient in conditions known as cystitis, a syndrome of acute or chronic origin. This deficiency contributes to the clinical symptoms in diseases such as interstitial cystitis (IC), as well as cystitis caused by infections, trauma, urolithiasis, urinary retention, neoplasia and radiation induced cystitis. Treatment with Cystistat has been shown to alleviate clinical symptoms in patients with several of these conditions. Cystistat is registered and marketed as a medical device in Canada and Europe. The product generated sales revenues of $3.7 million Cdn. in fiscal 2005.
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 products for human and animal health markets worldwide. The fully-integrated company employs approximately 185 skilled personnel and has three principal operating divisions: Human Health, Animal Health, and Food Safety. The Company’s primary goal is to develop proprietary cancer therapies supported by revenues from marketed products in human and animal health. For more information, please visit http://www.Bioniche.com .
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 annual reporting.
For further information, please contact: Jennifer Shea Manager of Corporate Communications & Investor Relations Bioniche Life Sciences Inc. Telephone: (613) 966-8058 ext. 1250 Cell: (613) 391-2097
Source: Bioniche Life Sciences Inc.
