BELLUS HEALTH EXERCISES OPTION TO TERMINATE LEASE
Lease termination will result in annual savings of approximately $4.5 million
LAVAL, QC, Jan. 14 /CNW Telbec/ - BELLUS Health Inc. (TSX: BLU) ("BELLUS Health" or the "Company") announced today that it exercised its right to terminate the lease of its Laval, Quebec premises as of April 7, 2011 (the "Termination Option"), as provided in the amended lease agreement dated March 31, 2009 with A.R.E. Quebec No. 2, Inc. ("A.R.E."), the landlord of such premises (the "Amended Lease"). The exercise of the Termination Option will result in annual savings of approximately $4.5 million for the Company, representing a total of approximately $43 million in aggregate savings over the course of the original lease term. In consideration for the exercise of the Termination Option, BELLUS Health will issue 20,656,320 common shares from treasury to A.R.E. at a price of $0.29 per share (rounded to the second decimal point), for an aggregate value of $6 million. Pursuant to the terms of the Amended Lease, deferred rent in the amount of $4.2 million (including accrued interest thereon) will be payable to A.R.E. on April 7, 2011, in cash or, at the Company's option, through an issuance of common shares from treasury.
"In keeping with the strategic initiatives to reduce our burn rate announced on August 9th, 2010, exercising the Termination Option enables BELLUS Health to substantially reduce its operating costs," said Roberto Bellini, President and Chief Executive Officer of BELLUS Health. "This will allow us to free up cash resources to continue developing the innovative products in our pipeline."
Following payment of the $6 million consideration for the exercise of the Termination Option, A.R.E. will own approximately 13% of the issued and outstanding shares of BELLUS Health. The Company previously disclosed the details of the Amended Lease, as well as its expectation to exercise the Termination Option, which exercise was permitted between January 1 and January 14, 2011. The Company is currently evaluating its options regarding its relocation in April of 2011.
About BELLUS Health
BELLUS Health is a development-focused health company concentrating on research and development of products that provide innovative health solutions and address critical unmet medical needs. For further information, please visit www.bellushealth.com.
Forward Looking Statements
Certain statements contained in this news release, other than statements of fact that are independently verifiable at the date hereof, may constitute forward-looking statements. Such statements, based as they are on the current expectations of management, inherently involve numerous risks and uncertainties, known and unknown, many of which are beyond BELLUS Health Inc.'s control. Such risks include but are not limited to: the impact of general economic conditions, general conditions in the pharmaceutical and/or nutraceutical industry, changes in the regulatory environment in the jurisdictions in which the BELLUS Health Group does business, stock market volatility, fluctuations in costs, and changes to the competitive environment due to consolidation, that actual results may vary once the final and quality-controlled verification of data and analyses has been completed, as well as other risks disclosed in public filings of BELLUS Health Inc. Consequently, actual future results may differ materially from the anticipated results expressed in the forward-looking statements. The reader should not place undue reliance, if any, on any forward-looking statements included in this news release. These statements speak only as of the date made and BELLUS Health Inc. is under no obligation and disavows any intention to update or revise such statements as a result of any event, circumstances or otherwise, unless required by applicable legislation or regulation. Please see the Annual Information Form of BELLUS Health Inc. for further risk factors that might affect the BELLUS Health Group and its business.
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