PharmaGap announces conditional approval to license its lead drug and related intellectual property
May 24 2012 - 8:30AM
PR Newswire (Canada)
OTTAWA, May 24, 2012 /CNW/ - PharmaGap Inc. (OTC.BB: PHRGF)
("PharmaGap" or "the Company") today announces conditional approval
by its Board of Directors of an offer to license its cancer drug
GAP-107B8 and related patents and intellectual property (IP) to
Clinical Value Corporation ("CVC") of Ottawa, Canada ("the
"Offer"). Final approval of the Offer is subject to final
documentation, a fairness opinion, and approval by the majority of
disinterested shareholders of PharmaGap. An Independent
Committee of the Board of Directors has been constituted and will
pursue completion of these conditions with the intent of concluding
the transaction as early as practical, with a target date of July
31, 2012. Key provisions of the Offer are: -- Worldwide exclusive
license rights to CVC; -- Assumption by CVC of PharmaGap trade
payables and accrued liabilities up to $500,000; -- Assumption by
CVC of all obligations for amounts owing to SC Stormont Holdings
Inc. and SC Stormont Inc. in the total amount of $1,673,247, plus
any additional amounts that may be advanced or accrued prior to
closing; -- Monthly payment by CVC to PharmaGap commencing at the
date of closing of up to $40,000, plus provision of management
services by CVC to PharmaGap, for a period of three years to
support product pipeline development and preclinical testing by
PharmaGap; and -- Sharing of revenue from licensing or sale of the
lead drug or related IP, net of an amount equal to two times of all
funds paid by CVC to or on behalf of PharmaGap, together with all
amounts paid by CVC for direct or indirect costs for development,
testing and/or clinical trials associated with the IP. Amounts up
to $100 million after provision for these costs will be shared
50/50 between CVC and PharmaGap. Amounts above $100 million will be
shared 2/3 to CVC and 1/3 to PharmaGap. The Executive leadership of
PharmaGap will be employed by CVC, together with staff and
consultants engaged in final preclinical testing and clinical
trials. Scientific leadership and staff of PharmaGap engaged in
pipeline development and testing will remain with PharmaGap.
Clinical Value Corporation is wholly owned by SC Stormont Holdings
Inc., which is majority owned and controlled by Roderick M. Bryden,
the Chairman of the Board of Directors of PharmaGap. 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
McNaughton613-287-3124
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