BURNABY, BC, July 22, 2014 /CNW/ - Welichem Biotech Inc. (the "Company") (TSX-V: WBI) announces that it has entered into a termination agreement with Shenzhen Celestial Pharmaceuticals Ltd. ("Celestial") and Beijing Wenfeng Tianji Pharmaceuticals Co., Ltd. ("BWTP") to terminate the asset purchase agreement dated March 26, 2013 (the "China APA") among the parties, pursuant to which the Company agreed to purchase the exclusive development and commercialization rights (the "Rights") to the novel anti-inflammatory agent, WBI-1001, in China, Taiwan, Macao and Hong Kong.
Welichem, Celestial and BWTP have been trying to negotiate with the relevant Chinese authorities since 2012 to obtain approval of the China APA as required for the transfer the Rights, however, negotiations have been unsuccessful in this regard. The Board of Directors of the Company determined that it would be in the best interests of the Company to terminate the China APA in light of the fact that it is unlikely that the China APA could ever be implemented.
The Termination Agreement provides that Celestial and BWTP will return the $10 million payment made by Welichem pursuant to the China APA, less an amount representing costs of the parties in seeking regulatory approval of the China APA plus the amount of any taxes required to be deducted.
Compulsory Acquisition Update
On July 21, 2014, LJ Resources Co., Ltd. ("LJ") announced that it intends to exercise its rights under the compulsory acquisition provisions in Section 300 of the Business Corporations Act (British Columbia) to acquire all of the outstanding common shares of Welichem (the "Shares") that it does not currently own and that it has now sent a notice of compulsory acquisition to all remaining holders of Shares in connection therewith. LJ also announced that it intends to take the necessary steps to have Welichem cease to be a reporting issuer under applicable Canadian securities laws following completion of the compulsory acquisition.
About Welichem Biotech Inc.
Welichem Biotech Inc. is a publicly-traded biotechnology company developing therapeutic drugs in the fields of autoimmune diseases and cancer. For a more complete business and financial profile of the Company, interested parties are encouraged to visit the Company's website, www.welichem.com.
CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS
All statements included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. In particular, this document contains forward-looking information and statements regarding the completion of the compulsory acquisition.
These forward-looking statements involve numerous assumptions made by the Company based on its experience, perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. In addition, these statements involve substantial known and unknown risks and uncertainties that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will prove inaccurate, certain of which are beyond the Company's control, including further actions or announcements of the offeror, changes in laws and regulations, stock market volatility and obtaining required approvals of regulatory authorities. Readers should not place undue reliance on forward-looking statements.
There can be no assurance that forward-looking statements or information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, you should not place undue reliance on the forward-looking statements or information contained herein. Except as required by law, we do not expect to update forward-looking statements and information.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE: Welichem Biotech Inc.
For further information:
Liren Tang, President and Chief Executive Officer of the Company: Tel.: (604) 432-1703, Email: email@example.com.