PRINCETON, N.J., Dec. 22 /PRNewswire-FirstCall/ -- Derma Sciences, Inc. , a specialty medical device and pharmaceutical company focused on advanced wound care, today announced that it has completed a comprehensive Heads of Agreement with Comvita New Zealand Ltd. (Comvita) of Paengaroa, New Zealand, covering the worldwide licensing rights for MEDIHONEY(R) professional wound care and skin care products.
The agreement effectively triples the potential market for Derma Sciences’ MEDIHONEY(R) products. The company currently has North & South America rights only, representing about one-third of the total market, and the agreement would give Derma Sciences rights to the remaining 67%. Comvita controls approximately 75% of worldwide Leptospermum (manuka) honey production and are the owner of key intellectual property and patents concerning the use of honey in medical dressings.
The Heads of Agreement calls for the following:
The agreement also states that Comvita CEO Brett Hewlett will join Derma Science’s Board of Directors.
The transaction is subject to certain financing contingencies and Derma Sciences’ listing on NASDAQ. Derma Sciences expects that the financing contingencies will be satisfied and the NASDAQ listing accomplished prior to the end of January 2010. License payment details were not disclosed, but the transaction will be in cash and Derma Sciences common shares, as well as customary royalty and milestone payments. Comvita currently holds a 10.1% stake in Derma Sciences.
Derma Sciences and Comvita expect to sign the definitive license by February 1, 2010.
Edward J. Quilty, Chairman & CEO of Derma Sciences, said, “MEDIHONEY(R) has been a major success for our company ever since our product launch in 2007. The dressing line enjoys tremendous clinical and nursing support in the wound care community, and is considered a top new dressing in its category. There are currently over 15 peer review articles and 25 clinical posters detailing its use.”
Comvita Chairman Neil Craig said, “We are pleased to finalize the agreement which was delayed over a year due to the turmoil in the global financial markets. The agreement signals a major milestone for Comvita’s significant investments into the application of honey in medical applications. We have a great deal of confidence in Derma’s ability to exploit the considerable opportunity for MEDIHONEY(R) in the professional medical market--they are, after all, specialists in the field.”
Quilty continued, “We’ve added 10 direct sales reps and several manufacturers reps since we first acquired MEDIHONEY(R). As a result of the increase, MEDIHONEY(R) revenue nearly doubled, from $0.97 million in the first nine months of 2008, to $1.90 million during the first nine months of 2009. Now that Derma has secured a long-term agreement, we plan to significantly increase the size of our sales force in 2010. We will create a Managing Director position in Europe and are currently interviewing candidates.”
“Derma Sciences plans to build its global strategy around the MEDIHONEY(R) brand. We firmly believe that this agreement will enable our company to significantly expand its international footprint,” Quilty concluded.
Under the terms of an earlier Agreement signed in 2006, Derma Sciences held the manufacturing and distribution rights for MEDIHONEY(R) to the medical and professional market in the Americas for a period of 5 years. This new Agreement affords Derma Sciences with the global rights in perpetuity, as well as security of supply of medical grade honey and new technology developments in this area well into the future
About Derma Sciences, Inc.
Derma Sciences is a specialty medical device / pharmaceutical company focusing on advanced wound care. Its key product, MEDIHONEY(R), is sold throughout the world by Derma Sciences and Comvita New Zealand -- the licensor of the patented honey-based technology -- and is the leading brand of honey-based dressings for the management of wounds and burns. The product has been shown to be effective in a variety of wounds and burns, and was the focus of a positive large-scale randomized controlled trial on leg ulcers. Derma’s recently FDA cleared BIOGUARD(TM) Barrier Dressing is the Company’s latest new product entrant into the $14 billion global wound care market. Derma also has in development DSC127, a novel angiotensin analog for accelerated wound healing and scar reduction. Patient enrollment for a Phase II study began in Q4 of 2008. Primary endpoint results from this study are expected to be announced within Q3 of 2010.
About Comvita New Zealand Ltd.
Comvita is a premium healthcare product and life sciences company established in 1974 by Claude Stafford and Alan Bougen. Its raw materials are mainly honey products and other bee-related produce such as pollen and the antibacterial resin propolis. Goods are processed locally in two purpose-built manufacturing facilities and distributed globally.
The manufacture and distribution of premium grade Manuka honey is one of Comvita’s core activities, and the honey is sold in thousands of health stores and other retail outlets around the globe. Comvita is also diversifying into other natural health care lines.
CONTACT: Edward J. Quilty, Chairman and CEO of Derma Sciences, Inc.,
+1-609-514-4744, equilty@dermasciences.com; or Investors, Jason Strominger,
or Media, Janet Vasquez, both of The Investor Relations Group,
+1-212-825-3210
Web site: http://www.dermasciences.com/
