Full Press Release Details
Pharmaceuticals Announces Joint Venture With Nordic Biotech for Lead Product
Sign $9.65M Deal to Develop and Commercialize Hedrin, a Next Generation
Treatment for Pediculitis (Head Lice)
YORK, Feb 5, 2008 (PrimeNewswire via COMTEX News Network) -- Manhattan
Pharmaceuticals, Inc. (AMEX:MHA) today announced that it has entered into a
joint venture agreement with Nordic Biotech Advisors ApS (Nordic) to develop
commercialize Hedrin ,
the company's novel, non-insecticide treatment for head lice. Manhattan
Pharmaceuticals, Inc. currently owns North American rights to Hedrin and is
pursuing development as a medical device in the U.S.
total deal, valued at up to $9.65M, provides for the formation of a 50/50 joint
venture entity that will own, develop and secure a commercialization partner
Hedrin. Under terms of the agreement, the Nordic Biotech Venture Fund II K/S
will invest up to $5.0M in the joint venture in exchange for a 50% ownership
interest, and Manhattan Pharmaceuticals will assign and transfer its North
American rights to Hedrin to the joint venture in exchange for a 50% ownership
interest valued at up to $5.0M plus up to $3.65M in cash and payments.
Pharmaceuticals will receive an up front payment from the joint venture
consisting of $2.0M in cash plus $2.5M equity in the joint venture. Upon
receiving medical device designation for Hedrin by the U.S. FDA, Manhattan
Pharmaceuticals will receive an additional $1.5M in cash plus an additional
$2.5M equity in the joint venture.
joint venture will be responsible for the development and commercialization
Hedrin in North America and all costs associated with the project including
necessary U.S. clinical trials, patent costs, and future milestones owed to
original licensor, Thornton & Ross Limited.
has been successfully launched in Europe and is a market leader there as a
generation, non-insecticide treatment for pediculitis," stated Florian
Schonharting, partner of Nordic Biotech. "We are very excited to be invested
this global product, and anticipate a successful development and launch in
large North American market."
deal strategically provides Hedrin with the resources to pursue development
medical device. We are excited to work with Nordic Biotech on this commercially
validated product," said Douglas Abel, president and chief executive officer
Manhattan Pharmaceuticals.
accordance with a milestone expected to be achieved on April 30, 2008, Nordic
has the right to receive, on such date, a warrant to purchase approx 7.1 million
shares of Manhattan Pharmaceuticals common stock at $0.14 per share. If fully
exercised, this warrant will yield an additional $1.0M of capital for the
Company. In addition to the investment in the joint venture noted above, Nordic
will make an upfront payment of $150,000 to the Company.
has an option to put its interest in the joint venture to Manhattan
Pharmaceuticals in exchange for shares of Manhattan Pharmaceuticals common
stock, and under certain conditions, Manhattan Pharmaceuticals has the option
call Nordic's interest in the joint venture in exchange for Manhattan
Pharmaceuticals common stock.
date, 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
United Kingdom (U.K.). In Europe, Hedrin has been launched in 21 countries
has achieved annual sales through its licensees of approximately $45 million
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.
is a unique, proprietary combination of silicones (dimeticone 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
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
from excreting waste fluid and by asphyxiation (smothering), rather than by
acting on the central nervous system, the insects cannot build up resistance
to the American Academy of Pediatrics, an estimated 6-12 million Americans
Pediculitis each year, with pre-school and elementary age children and their
families affected most often.
Manhattan Pharmaceuticals, Inc.
Pharmaceuticals, Inc. is a pharmaceutical company that acquires and develops
novel, high-value drug candidates primarily for the treatment of dermatologic
and immune disorders. With a pipeline consisting of four clinical stage product
candidates, Manhattan Pharmaceuticals is developing potential therapeutics
large, underserved patient populations seeking superior treatments for
conditions including pedicultitis (head lice), psoriasis, atopic dermatitis
(eczema), and 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 will be able to meet the milestone which
obligate Nordic to make the second payment referred to in this press release
(the failure to meet that milestone will give Nordic enhanced control over
joint venture's operations and other important decision-making), that 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 AMEX will provide a financial viability
exception to its rule that would require us to obtain stockholder approval