BELLEVILLE, Ontario, Feb. 1 /PRNewswire-FirstCall/ -- Bioniche Life Sciences Inc. , a research-based, technology-driven Canadian biopharmaceutical company, today announced that it has closed the sale of Bioniche Pharma Group Limited ("the Pharma Group"), its sterile injectibles manufacturing subsidiary based in County Galway, Ireland, to RoundTable Healthcare Partners, a U.S. healthcare focused private equity group based in Lake Forest, Illinois.
The terms of the definitive purchase and sale agreement were disclosed on January 12, 2006 after the transaction was first announced on October 5, 2005. In summary, the sale provides:
* Approximately $13.25 million U.S. ($15.4 million Cdn.) in cash, prior to transaction-related expenses (note: $7.5 million U.S. ($8.7 million Cdn.) will be repaid to Laurus Funds for a bridge loan - part of a larger $18.5 million U.S. ($21.5 million Cdn.) financing that closed in December; the remainder will be applied to the Company's ongoing working capital requirements, including inter-company payables to the Pharma Group); * Annual royalty payments to Bioniche of up to 1.0 million euro ($1.4 million Cdn.) for each of the next five years related to sales of Suplasyn(R) (a Bioniche-developed proprietary product for the treatment of osteoarthritis (OA) of the knee) providing that certain sales targets are met; * Up to $11.5 million U.S. ($13.4 million Cdn.) in aggregate performance payments for each of the next four years providing certain business performance targets are met; and * 10% ownership of the new Pharma Group.
With a combination of cash, debt assumption, equity in the business going forward and deferred sale proceeds, this transaction has a potential value to Bioniche of approximately $33 million U.S. ($38.4 million Cdn.).
"The Pharma Group business unit was established by Bioniche in 1992 as a means of generating revenue to support the Company's strategic research and development projects," said Graeme McRae, President & CEO of Bioniche Life Sciences Inc. "At this point in the development of Bioniche, it is critical to focus our resources on our key strategic priorities: our proprietary cancer treatment - Mycobacterial Cell Wall-DNA Complex (MCC) - which is entering a planned multi-centre Phase III/pivotal clinical trial in superficial bladder cancer; and our E. coli O157:H7 cattle vaccine which is nearing licensing. Final regulatory submission to the USDA is imminent."
In addition to the previously-noted benefits of this transaction to Bioniche, the sale also eliminates a significant portion of the Company's consolidated debt, in that all Pharma Group liabilities, both current and long-term (valued at $32 million Cdn. at September 30, 2005), are no longer on the Bioniche books.
Blackmont Capital Inc. advised Bioniche on this transaction.
About Bioniche Pharma Group Limited
Bioniche Pharma Group is a specialty pharmaceutical company involved primarily in the development, manufacturing, and marketing of sterile injectable products. The Pharma Group sells a number of non-branded products in the U.S. market for which it has received approved Abbreviated New Drug Applications. It also sells its branded product, Suplasyn, in 30 countries globally. Pharma Group products are sold to both the primary care and hospital markets in the U.S., Canada, and Europe.
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 175 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 these three segments. For more information, please visit www.Bioniche.com.
About RoundTable Healthcare Partners
RoundTable Healthcare Partners is an operating-oriented private equity firm focused exclusively on the healthcare industry. The partners of RoundTable have significant experience in managing, operating, acquiring and financing multibillion-dollar diversified healthcare companies. RoundTable partners with companies that can benefit from its extensive industry relationships and proven operating and transaction expertise. RoundTable currently manages two equity funds totaling $900 million in capital. More information about RoundTable Healthcare Partners can be found at www.roundtablehp.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, Corporate Communications Manager, Bioniche Life Sciences Inc. Tel: 613-966-8058 ext. 1250 / Cell: 613- 391-2097 Jennifer.Shea@Bioniche.com Rachel Levine, Investor Relations, The Global Consulting Group Tel: 646-284-9439 Rlevine@hfgcg.com
Bioniche Life Sciences Inc.CONTACT: Jennifer Shea, Corporate Communications Manager, Bioniche LifeSciences Inc., +1-613-966-8058 ext. 1250, cell, +1-613-391-2097,Jennifer.Shea@Bioniche.com; or Rachel Levine, Investor Relations, TheGlobal Consulting Group, +1-646-284-9439, Rlevine@hfgcg.com
Web site: http://www.bioniche.com/
