Lease termination will result in annual savings of approximately $4.5
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.
SOURCE BELLUS HEALTH INC.
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