Nuvo Research and Paladin Labs announce amendment to May 2012 loan arrangement
MISSISSAUGA, ON and MONTREAL, QC, June 17, 2013 /PRNewswire/ - Nuvo Research Inc. (TSX: NRI), a specialty pharmaceutical company dedicated to building a portfolio of products for the topical treatment of pain and the development of its immune modulating drug candidate WF10, and Paladin Labs Inc. (TSX: PLB), a leading specialty pharmaceutical company today announced that they have amended their loan arrangements (the "Loan") originally agreed to in May 2012. In May of 2012, Nuvo drew down the first $4.0 million tranche of the Loan which has been paid down to its current principle balance of $2.0 million.
Under the terms of the amended arrangements, Nuvo is entitled to draw down a second $4.0 million loan tranche immediately and a third $4.0 million loan tranche upon the occurrence of both the (i) launch of Pennsaid® 2% in the U.S. by Nuvo's U.S. marketing partner, Mallinckrodt Inc. and (ii) Pliaglis global annual sales achieving a US$5.0 million run rate. Certain repayment and default provisions have also been amended. The new tranches of the Loan, as with the first tranche, will bear interest at 15% per annum.
Paladin will be issued warrants to acquire 50,000 Nuvo common shares at 130% of the 5-day trailing value weighted average trading price ("VWAP") of Nuvo common shares on the Toronto Stock Exchange. If Nuvo exercises its option to draw down the third tranche of the Loan, Paladin will be entitled to be issued warrants to acquire a further 50,000 Nuvo common shares at 130% of the VWAP of Nuvo common shares as of the date that Nuvo draws down the third tranche. The warrants will expire 3 years from their date of issue.
Paladin will have the right to license the marketing rights to Nuvo's immune modulation drug candidate, WF10™, for Canada, South America and Central America (the "Paladin Territories"). The terms of the license will be the same as commercial terms under any WF10 license from Nuvo to a third party for another territory adjusting any upfront or milestone payments for the proportionate share of total pharmaceutical sales in the Paladin Territories relative to the total pharmaceutical sales in the territory licensed to the third party. Paladin's right to license WF10 for Paladin Territories will not apply if Nuvo enters into a global WF10 licensing transaction.
The transactions are subject to typical conditions including regulatory approval and are expected to be completed within the next 60 days.
"This loan facility from Paladin provides Nuvo with financial resources to advance our WF10 allergic rhinitis program and for general corporate purposes so we can continue to execute on our business plan," said Stephen Lemieux, Nuvo's Vice-President and Chief Financial Officer. "We very much appreciate the support of our marketing and financial partner, Paladin Labs, to help us achieve our goals."
"We are pleased to continue to support Nuvo in the development of WF10 and the expansion their pain franchise which is ably led by Pennsaid," said Mark Beaudet, interim President and Chief Executive Officer.
About Pennsaid 2%
Pennsaid 2% is a topical non-steroidal anti-inflammatory drug (NSAID) containing 2% diclofenac sodium compared to 1.5% for original Pennsaid. It is more viscous than original Pennsaid, is supplied in a metered dose pump bottle and was studied in clinical trials using twice daily dosing compared to four times a day for original Pennsaid.
Pliaglis is a topical local anesthetic cream that uses Nuvo's proprietary phase-changing technology to form a pliable peel on the skin when exposed to air. In the U.S., Pliaglis is indicated for use on intact skin in adults to provide local analgesia for superficial aesthetic procedures, such as dermal filler injection, pulsed dye laser therapy, facial laser resurfacing and laser-assisted tattoo removal. In the E.U. Pliaglis is indicated in adults to produce local dermal anaesthesia on intact skin prior to dermatological procedures. The Company has licensed worldwide marketing rights to Pliaglis to Galderma Pharma S.A. (Galderma), a global pharmaceutical company specialized in dermatology. Galderma launched the marketing and sale of Pliaglis in the U.S. in March of 2013 and in the E.U. in April of 2013.
The immune system provides an essential defense to microorganisms, cancer and substances it sees as foreign and potentially harmful. WF10 focuses on supporting the immune system by targeting the macrophage, a type of white blood cell that coordinates much of the immune system, to regulate normal immune function. In conditions such as allergic rhinitis, the body's immune system inappropriately responds to the presence of foreign allergens. Research suggests that in some cases, WF10 may rebalance improperly functioning immune systems. WF10 is an infusion therapy currently approved only in Thailand under the name IMMUNOKINE for treatment of postradiation chronic inflammatory disease and diabetic foot ulcers. WF10 is not yet approved for the treatment of moderate to severe allergic rhinitis and was used in the reported study on an investigational basis.
About Nuvo Research Inc.
Nuvo is a publicly traded, Canadian specialty pharmaceutical company, headquartered in Mississauga, Ontario. The Company is building a portfolio of products for the treatment of pain through internal research and development. The Company's product portfolio includes Pennsaid®, Pliaglis and Synera®. Pennsaid, a topical nonsteroidal anti-inflammatory drug (NSAID), is used to treat the signs and symptoms of osteoarthritis of the knee(s). Pennsaid is sold in the United States by Mallinckrodt Inc., in Canada by Paladin Labs Inc. and in several European countries. Pliaglis is a topical local anesthetic cream which provides topical local analgesia for superficial dermatological procedures. The Company has licensed worldwide marketing rights to Pliaglis to Galderma Pharma S.A., a global pharmaceutical company specialized in dermatology. Galderma launched the marketing and sale of Pliaglis in the U.S. in March of 2013 and in the E.U. in April of 2013. Synera is a topical patch that combines lidocaine, tetracaine and heat, approved in the United States to provide local dermal analgesia for superficial venous access and superficial dermatological procedures and in Europe, for surface anaesthesia of normal intact skin. Nuvo currently markets Synera in the United States and its licensing partner, Eurocept International B.V., has initiated a pan-European launch of Synera (under the name Rapydan) in several European countries. The Company is also developing WF10, for the treatment of immune related diseases.
About Paladin Labs Inc.
Paladin Labs Inc., headquartered in Montreal, Canada, is a leading specialty pharmaceutical company focused on developing, acquiring or in-licensing innovative pharmaceutical products for the Canadian market. 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 Paladin Web Site at www.paladinlabs.com.
Certain statements in this news release constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements include, but are not limited to, statements concerning the Company's future objectives, strategies to achieve those objectives, as well as statements with respect to management's beliefs, plans, estimates, and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "outlook", "objective", "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "should", "plans" or "continue", or similar expressions suggesting future outcomes or events. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those contemplated by such statements. Factors that could cause such differences include the need for additional financing, the current economic environment, dependence on sales and marketing partnerships, competitive developments, as well as other risk factors included in the Company's annual information form dated March 27, 2013 under the heading "Risks Factors" and as described from time to time in the reports and disclosure documents filed by the Company with Canadian securities regulatory agencies and commissions. This list is not exhaustive of the factors that may impact the Company's forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on the Company's forward-looking statements. As a result of the foregoing and other factors, no assurance can be given as to any such future results, levels of activity or achievements and neither the Company nor any other person assumes responsibility for the accuracy and completeness of these forward-looking statements. The factors underlying current expectations are dynamic and subject to change. Although the forward-looking information contained in this news release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. Certain statements included in this news release may be considered "financial outlook" for purposes of applicable securities laws, and such financial outlook may not be appropriate for purposes other than this news release. All forward-looking statements in this news release are qualified by these cautionary statements. The forward-looking statements contained herein are made as of the date of this news release and except as required by applicable law, the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
SOURCE Nuvo Research Inc.
Posted: June 2013