Full Press Release Details
Pharmaceuticals Announces Amendment of Joint Venture Deal with Nordic
to Receive $1.0 Million in Cash and $1.25 Million in Equity
YORK, NY JUN 12, 2008
Manhattan Pharmaceuticals, Inc. (OTCBB: MHAN) today announced that the FDA
novel, non-insecticide treatment for pediculosis (head lice), to the Center
Devices and Radiological Health (CDRH) division of the U.S. Food and Drug
Administration (FDA) for review as a device. As a result of this regulatory
progress, the company and Nordic Biotech Venture Fund II K/S (Nordic) have
amended their joint venture agreement for the development and commercialization
of Hedrin for the North American market. This amendment separates the final
tranche of cash and equity, originally due upon medical device designation,
two separate installments. The first installment is payable by June 30, 2008
the second installment is payable upon device classification by the
terms of the amended agreement, the joint venture entity, Hedrin Pharmaceuticals
K/S, is scheduled to receive the first installment of $1.25M in cash from Nordic
by June 30, 3008. Hedrin Pharmaceuticals K/S will then distribute $1.0M in
to Manhattan Pharmaceuticals and equity to each of Manhattan Pharmaceuticals
Nordic sufficient to maintain their respective ownership interests at 50%.
the second installment, due upon classification of Hedrin by the FDA as a Class
II or Class III medical device, Hedrin Pharmaceuticals K/S will receive $1.25M
in cash from Nordic, and will then distribute $0.5M cash to Manhattan
Pharmaceuticals and equity to each of Manhattan Pharmaceuticals and Nordic
sufficient to maintain their respective ownership interests at 50%. The total
both installments results in payment and distribution of the same aggregate
amounts agreed to under the original joint venture agreement.
fulfillment of the final tranche, Hedrin Pharmaceuticals K/S will have received
a total of $1.5M cash to be applied toward the development and commercialization
of Hedrin in North America. All costs associated with the Hedrin project
including any necessary U.S. clinical trials, patent costs, and future
milestones owed to the original licensor, Thornton & Ross Limited, are the
responsibility of Hedrin Pharmaceuticals K/S.
Hedrin has been clinically studied in 326 subjects and has demonstrated clinical
equivalence to widely used insecticide head lice treatments. It is currently
marketed as a device in Western Europe and as a pharmaceutical in the United
Kingdom (U.K.). In Europe, Hedrin has been launched in 21 countries and has
achieved annual sales through its licensees of approximately $45 million at
in-market public prices (which equates to a projected 21% market share), and
the market leader in the U.K. with $11 million in sales (23% market share)
France with a 21% market share.
a unique, proprietary combination of silicones (dimethicone and cyclomethicone)
that acts as a pediculicidal (lice killing) agent by disrupting the insect's
mechanism for managing fluid and breathing. Hedrin contains no traditional
chemical insecticides in contrast with most currently available lice treatments.
Recent studies have indicated that resistance to traditional chemical
insecticides may be increasing and therefore contributing to insecticide
treatment failure. Because Hedrin kills lice by preventing the louse from
excreting waste fluid and by asphyxiation (smothering), rather than by acting
the central nervous system, the insects cannot build up resistance to the
to the American Academy of Pediatrics, an estimated 6 to 12 million Americans
have pediculosis each year, with pre-school and elementary age children and
their families affected most often.
Manhattan Pharmaceuticals, Inc.
Pharmaceuticals, Inc. is a specialty pharmaceutical company that acquires and
develops novel, high-value drug candidates primarily for the treatment of
dermatologic disorders. With a pipeline consisting of four clinical stage
product candidates, the company is currently developing Hedrin , a novel,
non-insecticide treatment for pediculosis (head lice); Topical PTH (1-34) for
the treatment of psoriasis; Altoderm (topical cromolyn sodium) for the
treatment of pruritus associated with dermatologic conditions including atopic
dermatitis; and Altolyn (oral tablet cromolyn sodium) for the treatment of
mastocytosis. (http://www.manhattanpharma.com)
Biotech Advisors ApS is the investment advisor to Nordic Biotech K/S and Nordic
Biotech Venture Fund II K/S, and was founded in 2001 by Christian Hansen and
Florian Schonharting. Key investors in the Nordic Biotech fund family are major
institutions and family foundations. Nordic Biotech focuses on global special
situations opportunities and currently has a portfolio in excess of 10
companies. (http://www.nordicbiotech.com/)
Regarding Forward-Looking Statements
press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements involve risks
and uncertainties that could cause Manhattan Pharmaceuticals, Inc.'s actual
results to differ materially from the anticipated results and expectations
expressed in these forward-looking statements. These statements are often,
not always, made through the use of words or phrases such as "anticipates,"
"expects," "plans," "believes," "intends," "will," and similar words or phrases.
These statements are based on Manhattan Pharmaceuticals, Inc.'s current
expectations, forecasts and assumptions, which are subject to risks and
uncertainties, which could cause actual outcomes and results to differ
materially from these statements. Among
other things, there can be no assurances that our joint venture with Nordic
be able to meet the milestone which will obligate Nordic to make the next
payment referred to in this press release (the failure to meet that milestone
June 30, 2009 will give Nordic an additional 20% ownership of the joint venture,
and enhanced control over the joint venture's operations and other important
liquidated damages will accrue if we are unable to register the shares of common
stock underlying the warrants and the put/call rights referred to in this press
release in a timely manner, that Manhattan Pharmaceuticals, Inc.'s development
efforts relating to Hedrin or any other current or future product candidates
will be successful, that any clinical study will be completed or will return
positive results, or that we will be able to out-license its discontinued
programs to other companies on terms acceptable to Manhattan Pharmaceuticals,
Inc. or at all. Other risks that may affect forward-looking information
contained in this press release include the company's extremely limited capital
resources, the possibility of being unable to obtain regulatory approval of
Manhattan Pharmaceuticals, Inc.'s product candidates, or obtain the treatment
are seeking for Hedrin, the risk that the results of clinical trials may not
support the company's claims, the risk that the company's product candidates
not achieve market acceptance in North America or elsewhere, the company's
reliance on third-party researchers to develop its product candidates,
availability of patent protection, the risk that sufficient capital may not