- Reorganization to result in a simplified capital structure -
LAVAL, QC, April 5, 2012 /CNW/ - BELLUS Health Inc. (TSX: BLU) ("BELLUS
Health" or the "Company") today announced that it has entered into a
strategic partnership and financing with Pharmascience Inc.
("Pharmascience") whereby Pharmascience will pay a total of $17.25
million to BELLUS Health, including $8.15 million in non-dilutive
capital and a $9.1 million investment for a 10.4% ownership stake in a
new public company ("New BELLUS"). The partnership will be put in place
through a plan of arrangement, under which 89.6% of New BELLUS will be
owned by securityholders of BELLUS Health.
"This transaction fully funds the Company until the completion of the
ongoing phase 3 registration trial of KIACTA™ as a treatment for AA
Amyloidosis," said Roberto Bellini, President and CEO of BELLUS Health.
"It also introduces a strong, new strategic partner to the Company and
results in a cleaner capital structure. This simpler capital structure
supports our plan to attract a wider range of investors and increase
our trading liquidity as we near completion of the KIACTA™ phase 3
trial and evaluate opportunities to add to our pipeline."
"As the largest generic pharmaceutical company in Québec, we are
actively looking for opportunities to strategically build our exposure
to innovative development pipelines," added David Goodman, CEO of
Pharmascience. "Under this plan of arrangement, the company that
emerges will be a well-funded, late-stage company and we look forward
to collaborating with BELLUS on drug development programs of mutual
As part of the arrangement, all outstanding convertible securities of
BELLUS Health will be converted to common equity of New BELLUS or
amended to rank equally with the common shares of New BELLUS, at the
same price as the Pharmascience investment. Common shares of BELLUS
Health will be exchanged on a one-for-one basis for common shares of
New BELLUS. New BELLUS will carry on its business operations under the
name "Bellus Health Inc." and apply to have its common shares listed
with the same "BLU" symbol on the Toronto Stock Exchange. The current
senior management of BELLUS Health will continue with New BELLUS.
A summary of the reorganization to be completed under a court-supervised
arrangement pursuant to the Canada Business Corporations Act is:
BELLUS Health will transfer all its assets to a newly-constituted
limited partnership (the "LP") to be owned 10.4% by Pharmascience and
89.6% by New BELLUS.
The LP will continue BELLUS Health's business operations.
BELLUS Health's convertible debt holders will convert the majority of
their debt into common shares of the Company at a conversion rate of
$0.05, and preferred shareholders will automatically be converted into
common shares in accordance with their terms.
Holders of convertible notes of BELLUS Health will have the option to
either immediately convert their notes at a conversion price of $0.05
or having the terms of their notes amended to rank pari passu with the common shares of New BELLUS and to be convertible into common
shares of New BELLUS in 2016 at a fixed conversion price of $0.05.
New BELLUS will apply to have its common shares listed on the Toronto
Stock Exchange under the symbol BLU.
Upon completion of the transaction, Pharmascience will own 100 percent
of the common shares of the original BELLUS Health and a (10.4%)
interest in the LP, which interest will be exchangeable for 10.4% of
the common shares of New BELLUS that are outstanding (after giving
effect to the conversion of convertible notes and exchange of shares of
BELLUS Health) at the effective time of the arrangement.
Completion of the transaction is subject to receipt of court and
regulatory approvals and other third party consents. The arrangement
must also be approved by holders of 66⅔% of the common shares and
preferred shares of BELLUS Health, and 66⅔% of the convertible notes of
BELLUS Health voted at a special meeting and, if applicable, a majority
of minority holders in each such class. The special meeting of the
Company's security holders that will be held on May 15, 2012, in
conjunction with the Company's annual general shareholders' meeting.
Additional details regarding the transaction and the votes to be taken
at the special meeting will be provided to BELLUS Health security
holders in an information circular that will be mailed before the end
of April 2012. The information circular will also be available on
BELLUS Health's website (www.bellushealth.com) and at www.sedar.com.
Based on a number of factors, including a fairness opinion rendered by
the Company's financial advisor for the transaction and the
recommendation of an independent committee of BELLUS Health's Board of
Directors that was constituted to supervise the Company's negotiation
of the transaction, BELLUS Health's Board of Directors unanimously
recommends that the Company's security holders approve the transaction.
Pharmascience has concurrently entered into voting and support
agreements with security holders holding approximately 35.9% of the
Company's common shares, 52.9% of Company's preferred shares and 61%
principal amount of the Company's convertible notes, which security
holders have agreed to vote in favour of the transaction.
About Pharmascience Inc. (www.pharmascience.com)
Founded in 1983, Pharmascience is a Canadian-owned pharmaceutical
company that is based in Montreal and has over 1,300 employees.
Pharmascience specializes in the development and marketing of a wide
range of innovative and high-quality generic drugs, available by
prescription, over the counter and in hospitals. Ranked third among the
largest Canadian pharmaceutical companies in terms of prescriptions,
Pharmascience sells its products in over 60 countries, with sales in
excess of $700 million.
About BELLUS Health (www.bellushealth.com)
BELLUS Health is a development-focused healthcare company concentrating
on products that provide innovative health solutions and address
critical unmet medical needs. The Company, in collaboration with its
partner, Celtic Therapeutics, is currently advancing its novel drug
candidate KIACTA™, through phase III trials for treatment of AA
Amyloidosis, an orphan indication resulting in renal dysfunction that
often rapidly leads to dialysis and eventually death. AA Amyloidosis
affects approximately 50,000 individuals in the United States, Europe
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 ability to obtain
financing immediately in current markets, 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 Inc. does business, stock
market volatility, fluctuations in costs, and changes to the
competitive environment due to consolidation, achievement of forecasted
burn rate, achievement of forecasted clinical trial milestones, and
that actual results may vary once the final and quality-controlled
verification of data and analyses has been completed. 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 Company's public fillings
including the Annual Information Form of BELLUS Health Inc. for further
risk factors that might affect the Company and its business.
SOURCE BELLUS HEALTH INC.
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