Nuvo Research® Announces Intention to Split Into Two Publicly Traded Companies
September 15, 2015
- Nuvo shareholders to receive shares of both companies
- One company would be a profitable and growing commercial business
- One company would be a biotech company focused on drug development
MISSISSAUGA, ON, Sept. 15, 2015 /CNW/ - Nuvo Research Inc. (TSX:NRI) (Nuvo or the Company), a specialty pharmaceutical company with growing revenues and a diverse portfolio of topical and immunology products, today announced that it plans to split Nuvo into two separate, publicly traded companies. This strategy is intended to enhance long-term value for Nuvo shareholders.
If completed, the proposed transaction is expected to have the following benefits:
- Creates a pure-play commercial healthcare company with growing revenue, significant EBITDA and significant EBITDA growth potential – to be owned 100% by Nuvo shareholders
- Creates a pure-play biotech development company with a deep pipeline of product candidates and significant capital – also to be owned 100% by Nuvo shareholders
- Both companies will be distinct and separately traded public companies
- Nuvo shareholders to receive shares of both companies
- Substantial, existing cash balance puts both companies in a strong position for growth
- Provides a better mechanism for shareholders to measure the performance of the distinct, separate businesses
"We have carefully evaluated whether to separate these businesses for some time due to the major differences between our specialty pharma business that generates cash and our drug development business that utilizes cash while creating value by advancing drug product candidates through the clinical and regulatory process," said John London, Nuvo's President and Co-Chief Executive Officer. "We believe this is the right time to separate the businesses because of the significantly improved revenue we are beginning to receive as a result of Horizon's success in selling Pennsaid 2% in the U.S. and the opportunity to make Pennsaid 2% a global brand through international out-licensing or other monetization strategies. This is a further refinement to the strategy that we announced in our business update press release of April 16, 2015 and is a more definitive path to unlock value for our shareholders."
"While both businesses have significant value, they have distinctly different business models, capital requirements and talent needs," added Dan Chicoine, Nuvo's Chairman and Co-Chief Executive Officer. "In addition, their respective opportunities differ substantially in regulatory approval requirements, length to inflection points and possible risks and potential returns. This transaction, if completed, would give both businesses greater flexibility to focus on, and pursue, their respective growth strategies, which we believe should provide shareholders with greater value over the longer term. This separation will create greater clarity not just to our shareholders, but also to potential strategic partners that want to evaluate business opportunities with Nuvo."
Nuvo's product portfolio includes Pennsaid® 2%, approved in the U.S. for pain of osteoarthritis (OA) of the knee(s), WF10™, an immune modulating drug candidate currently being studied in a Phase 2 study for the treatment of allergic rhinitis, as well as the topical and transdermal development stage drug candidates at various stages of development, which include the Heated Lidocaine/Tetracaine Patch (HLT Patch) for the treatment of acute musculoskeletal pain, Flexicaine for the treatment of diabetic neuropathy and post herpetic neuralgia, IBUFOAM, an ibuprofen foam formulation for the treatment of acute pain and antifungal formulations for the treatment of onychomycosis.
Complete details of the proposed transaction and each company will be set forth in an information circular that will be mailed to Nuvo's shareholders in connection with a special meeting that will be called by Nuvo to approve the proposed transaction. Completion of the proposed transaction is subject to certain conditions, including final approval by the Nuvo Board of Directors, confirmation of the potential tax-free nature of the transaction for Canadian and U.S. shareholders, regulatory approval requirements and the approval of Nuvo's shareholders. If approved by shareholders, Nuvo expects the proposed transaction would be completed in early 2016 (subject to the satisfaction of all conditions). However, there can be no assurances regarding the ultimate timing of the proposed transaction or that the proposed transaction will be completed.
Nuvo has engaged Bloom Burton & Co. as its financial advisor and Goodmans LLP as its legal counsel in connection with the proposed transaction.
Management to Host Conference Call/Webcast
Management will host a conference call to discuss the proposed transaction tomorrow (Wednesday, September 16, 2015) at 8:30 a.m. ET. To participate in the conference call, please dial 1 (888) 231-8191 or (647) 427-7450, reference number 37788703. Please call in 15 minutes prior to the call to secure a line. You will be put on hold until the conference call begins.
A taped replay of the conference call will be available two hours after the live conference call and will be accessible until September 23, 2015 by calling 1 (855) 859-2056 or (416) 849-0833, reference number 37788703.
A live audio webcast of the conference call will be available through www.nuvoresearch.com. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to hear the webcast.
About Nuvo Research Inc.
Nuvo (TSX:NRI) is a growing specialty pharmaceutical company with a diverse portfolio of products and technologies for pain and topical indications. Nuvo's products range from U.S. Food and Drug Administration (FDA) approved commercial products to development stage drug candidates and technology platforms. For additional company information visit www.nuvoresearch.com.
About Pennsaid 2%
Pennsaid 2% is a topical product containing DMSO and 2% diclofenac sodium compared to 1.5% for original Pennsaid. It is approved in the U.S. for pain of OA of the knee(s). It is more viscous than Pennsaid, is supplied in a metered dose pump bottle and has been approved in the U.S. for twice daily dosing compared to four times a day dosing for Pennsaid. Pennsaid 2% is protected by multiple U.S. patents that are listed in the FDA's Approved Drug Products with Therapeutic Equivalence Evaluations database or Orange Book. Patents protecting Pennsaid 2% have been issued or are pending in multiple major international territories. Pennsaid 2% has not yet received regulatory approval outside of the U.S. To support regulatory approval in certain international jurisdictions, Pennsaid 2% is currently being studied in a Phase 3 clinical trial in Germany for the treatment of acute ankle sprains. Top-line results are expected to be available in Q4 2015 or Q1 2016.
Pennsaid is used to treat the signs and symptoms of OA of the knee(s). The drug combines a transdermal carrier (containing DMSO) with 1.5% diclofenac sodium, an NSAID and delivers the active drug through the skin directly to the site of inflammation and pain. Following FDA approval of Pennsaid 2%, Pennsaid is no longer marketed in the U.S. effective January 1, 2015. It is currently marketed in Canada by Paladin Labs Inc. and marketed under license and/or distribution agreements in Greece, Italy and the U.K.
WF10 is a solution containing stabilized chlorite ions that focuses on supporting the immune system by targeting the macrophage, a type of white blood cell that coordinates much of the immune system, to regulate normal immune function. WF10 is an infusion therapy currently approved only in Thailand under the name IMMUNOKINE for the treatment of post-radiation-therapy syndromes and adjunctive therapy of diabetic foot ulcers. WF10 is currently being studied in a Phase 2 clinical trial for the treatment of patients with allergic rhinitis. Top-line results are expected to be available in Q4 2015 or Q1 2016.
About the HLT Patch
The HLT Patch is a topical patch that combines lidocaine, tetracaine and heat, using proprietary CHADD™ technology. The CHADD unit generates gentle heating of the skin and in a well-controlled clinical trial demonstrated that it contributes to the efficacy of the HLT Patch. The Company is developing the HLT Patch for the treatment of acute musculoskeletal pain.
Flexicaine is a proprietary cream formulation of lidocaine and tetracaine that is designed for the topical treatment of pain conditions such as post herpetic neuralgia or diabetic neuropathy. The formulation dries to form a film which can be easily peeled from the skin once actives have been delivered to the site of pain providing a long-lasting anesthetic effect and simple removal of the product.
IBUFOAM was developed to treat acute and chronic pain conditions such as sprains and strains and OA. IBUFOAM is a topical ibuprofen foam formulation that combines a transdermal carrier DMSO with 5% of the NSAID ibuprofen and delivers the active drug through the skin directly to the site of inflammation and pain.
Certain statements in this press release constitute forward-looking information and/or forward-looking statements (collectively, forward-looking statements") within the meaning of applicable securities laws. Forward-looking statements include, but are not limited to, statements concerning the potential spin-off of Nuvo's drug development business, the benefits of the spin-off to Nuvo's shareholders and to each company, the taxable nature of the spin-off, the expected financial results and condition of each company, each company's future objectives and strategies to achieve those objectives, the future prospects of each company as an independent company, as well as statements with respect to management's beliefs, plans, estimates, and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "outlook", "objective", "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "should", "plans", "potentially" or "continue", or similar expressions suggesting future outcomes or events. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those contemplated by such statements. Factors that could cause such differences include general business and economic uncertainties and adverse market conditions, uncertainties that may delay or negatively impact the spin-off or cause the spin-off to not occur; uncertainties related to each company's ability to realize the anticipated benefits of the spin-off, including new focus and anticipated growth; disruptions to operations as a result of effecting the spin-off; risks and uncertainties related to obtaining approvals, rulings and consents, or satisfying other requirements, necessary or desirable to permit or facilitate completion of the spinoff future factors that may arise making it inadvisable to proceed with, or advisable to delay, all or part of the spin-off, the impact of the spinoff on the trading prices for, and market for trading in, the shares of each company, as well as other risk factors included in the Company's Annual Information Form dated February 19, 2015 under the heading "Risks Factors" and as described from time to time in the reports and disclosure documents filed by the Company with Canadian securities regulatory agencies and commissions. This list is not exhaustive of the factors that may impact the Company's forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on the Company's forward-looking statements. As a result of the foregoing and other factors, no assurance can be given as to any such future results, levels of activity or achievements and neither the Company nor any other person assumes responsibility for the accuracy and completeness of these forward-looking statements. The factors underlying current expectations are dynamic and subject to change. Although the forward-looking information contained in this press release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. All forward-looking statements in this press release are qualified by these cautionary statements. The forward-looking statements contained herein are made as of the date of this press release and, except as required by applicable law, the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
SOURCE Nuvo Research Inc.
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