OTTAWA, Aug. 3, 2012 /CNW/ - PharmaGap Inc. (TSXV: GAP) (OTCBB: PHRGF)
("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 3rd, 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:
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;
CVC will assume all costs for final pre-clinical development, Clinical
Trials, and protection of intellectual property for the lead cancer
A monthly cash payment will be made by CVC to PharmaGap to support
development of PharmaGap pipeline products;
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. (TSX-V: GAP), 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
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.
SOURCE: PHARMAGAP INC.
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