AGENIX SETTLES CHINA DEAL
December 14th 2008 21:17
Wednesday December 10, 2008
Daily news on ASX-listed biotechnology companies
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* PROF IAN FRAZER QUITS OBJ’S SCIENTIFIC BOARD
* SAFETY MEDICAL EXTENDS TRADING HALT TO SUSPENSION
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AGENIX
Agenix says the problematic 2007 acquisition of two Shanghai pharmaceutical companies been resolved conditionally through a new joint venture partnership.
Agenix said it had a preliminary settlement deed with the Chinese vendors and in particular, Shanghai Rui Guang Bio-Pharma Development Company (SHRG; see Biotech Daily; July 24, August 29, 2008).
Agenix said the deed was binding, subject to the acquisition parties obtaining finance by December 31, 2008.
The company said that to avoid litigation, RMB44,000,000 ($A9,600,000) would be paid to Agenix by June 30, 2009 with a deposit of five percent ($480,000) due by December 15, 2008 and further payments between January and June 30, 2009, secured by bank guarantee or letter of credit.
Agenix said that SHRG would grant an exclusive master licence agreement of hepatitis B anti-viral Youheding to the Agenix Wholly Foreign-Owned Enterprise: Agenix Biopharmaceutical (Shanghai) Co for markets outside mainland China, allowing Agenix to purchase Youheding for export markets and, at Agenix’s discretion, engage third-party manufacturers to make the product outside China.
Agenix said a joint venture would be established to own the intellectual property rights of the pipeline products including hepatitis B drugs, anti-cancer and other products.
Agenix will own 57 percent of the joint venture through the Agenix Wholly Foreign-Owned Enterprise (WFOE). Under the original acquisition, Agenix held a 60 percent interest in the pipeline products.
Shanghai’s School of Pharmacy of Second Military Medical University will own 40 percent and an equity interest of three percent will be owned by the 2007 vendors.
The joint venture will licence product rights to Agenix WFOE for all development, registration and management decisions on commercialization of the pipeline products.
On product registration in China, the Agenix WFOE will acquire the intellectual property rights of the pipeline products from the joint venture.
Agenix will sign a non-exclusive agreement with Shanghai Yi Sheng Yuan Pharmaceutical to manufacture trial samples of the pipeline products as well as commercial production.
Agenix said the financial effect of the negotiations has not been agreed, but “a significant write-down in the value of … intangible assets will be necessary”.
Agenix said signing the deed would allow it to clarify its accounts for the year to June 30, 2008, which would be sent to shareholders with a notice of annual general meeting, expected to be held in early 2009.
Agenix said lodgment of the audited accounts and a demonstrated adherence to ASX Listing Rules would enable the company to resume trading.
The deed is binding subject to finance and a final settlement deed, manufacturing agreement and joint venture agreement by December 31, 2008.
Agenix will not take legal action but if finance is not obtained by December 31, 2008 then it will revert to its original rights under the China acquisition deal documents.
Agenix chairman Nick Weston said the board replaced the one that was involved in the original acquisition and had “worked extremely hard … to obtain a resolution to a complex and difficult set of circumstances surrounding the China acquisition”.
“It is the board’s strong view that this settlement … is the best option for Agenix and avoids the high costs and uncertainty of litigation and arbitrations in China,” Mr Weston said.
“The deal is subject to the other side obtaining finance, but if the settlement does become unconditional, the company will be on a more solid footing to pursue these core operations for the benefit of shareholders,” he said.
Agenix last traded at 1.7 cents.
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