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:
|1)||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;|
|2)||CVC will assume all costs for final pre-clinical development, Clinical Trials, and protection of intellectual property for the lead cancer drug program;|
|3)||A monthly cash payment will be made by CVC to PharmaGap to support development of PharmaGap pipeline products;|
|4)||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 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.
SOURCE: PHARMAGAP INC.
For further information: