PharmaGap Shareholders Approve License to Clinical Value Corporation at Annual General Meeting
August 02 2012 - 7:03AM
PR Newswire (Canada)
OTTAWA, Aug. 3, 2012 /CNW/ - PharmaGap Inc. ("PharmaGap" or "the
Company") today announced that shareholders approved the proposed
license of its lead cancer drug program (the "Transaction") to
Clinical Value Corporation ("CVC") at the Annual General Meeting
(the "AGM") of the Company held on August 3(rd), 2012 in Ottawa.
The Transaction had previously been recommended for approval to
shareholders unanimously by both an Independent Committee of the
Board and the entire Board, subject to satisfactory finalization of
the Transaction agreements with CVC (as decided by the Independent
Committee) and any approval of the TSX-V that may be required. The
key elements of the Transaction are: 1) PharmaGap will receive 50%
of the first $100 million of sale or licensing revenues of the drug
after recovery by CVC of its initial investment and equivalent
priority, and 1/3 of sale or licensing revenues above $100 million,
also net of the investment recovery and priority return by CVC; 2)
CVC will assume all costs for final pre-clinical development,
Clinical Trials, and protection of intellectual property for the
lead cancer drug program; 3) A monthly cash payment will be made by
CVC to PharmaGap to support development of PharmaGap pipeline
products; 4) Accounts payable and related obligations of PharmaGap
incurred in pre-clinical development are assumed by CVC. The
Transaction was described in a Management Information Circular
mailed to all shareholders on July 12, 2012, which provided full
disclosure of the Transaction, the Fairness Opinion and voting
instructions. Following shareholder approval today, legal
documentation and completion of funding of CVC will proceed with
completion expected during the current quarter. Mr. Robert McInnis,
President and CEO of PharmaGap, stated "This is an extremely
beneficial transaction to PharmaGap and its shareholders. Our
shareholders will require no further dilution to complete the
clinical trial program for our lead cancer drug. The PharmaGap
pipeline program, which we believe will have significant potential
value, will be supported and enhanced by revenues from Clinical
Value Corporation. The performance of the drug in clinical trials
will determine whether or not value will be achieved, and the cost
will be assumed by Clinical Value Corporation and not the PharmaGap
shareholders." CVC is a wholly owned subsidiary of SC Stormont
Holdings Inc. ("Stormont"), which in turn is owned and controlled
by Roderick M. Bryden, Chairman of PharmaGap Inc., and is
PharmaGap's largest single shareholder. As required by good
corporate governance practices, the Independent Committee of the
Board was established, and a Fairness Opinion was commissioned and
received by the Independent Committee in order to ensure the rights
of all shareholders other than Stormont were addressed and
protected. Stormont currently owns 27,866,137 common shares of the
Company, representing a 19.14 percent interest. As an interested
party to the transaction, Mr. Bryden had previously abstained from
the vote of the Board, and abstained from voting all shares under
his control (including the Stormont common shares) on this matter
at the AGM. About PharmaGap Inc. PharmaGap Inc. , based in Ottawa,
ON, is a biotechnology company with a core focus on developing
novel peptide therapeutics for the treatment of cancer. PharmaGap's
GAP-107B8 is a novel peptide drug that has been shown to be
effective in numerous cancer types, including chemo-resistant
cancers, in vitro. For more information on PharmaGap please visit
the Company's website at www.pharmagap.com. Forward Looking
Statements This news release contains certain statements that
constitute forward-looking statements as they relate to the Company
and its management. Forward-looking statements are not historical
facts but represent management's current expectations of future
events, and can be identified by words such as "believe",
"expects", "will", "intends", "plans", "projects", "anticipates",
"estimates", "continues", and similar expressions. Although
management believes that expectations represented in such
forward-looking statements are reasonable, there can be no
assurance that they will prove to be correct. By their nature,
forward-looking statements include assumptions and are subject to
inherent risks and uncertainties that could cause actual future
results, conditions, actions or events to differ materially from
those in the forward-looking statements. If and when
forward-looking statements are set out in this news release,
PharmaGap will also set out the material risk factors or
assumptions used to develop the forward-looking statements. Except
as expressly required by applicable securities laws, the Company
assumes no obligation to update or revise any forward-looking
statements. The future outcomes that relate to forward-looking
statements may be influenced by many factors, including, but not
limited to: results of ongoing product testing and development;
regulatory approvals required to complete development of products;
ability to manufacture product at quality and scale for human use
on an economically sound basis; patient reimbursement by private
and public health insurance programs; unintended side effects of
products; competitive products; product liability; intellectual
property; reliance on key personnel; risks of future legal
proceedings; income tax matters; availability and terms of
financing; distribution of securities; effect of market interest
rates on price of securities, and potential dilution. Note: Neither
the TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this
release. No Securities Commission or other regulatory
authority having jurisdiction over PharmaGap has approved or
disapproved of the information contained herein. This release
contains forward looking statements that may not occur or may
change materially. PHARMAGAP INC. CONTACT:
Sharilyn McNaughton(613) 287-3124
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