Press Release Source: Progen Industries Limited
Progen Buys Back PI-88 Royalty Obligation From Medigen
Tuesday January 16, 9:00 am ET
BRISBANE, Australia and TAIPEI, Taiwan, Jan. 16 /PRNewswire-FirstCall/ -- Progen Industries Limited (ASX: PGL, Nasdaq: PGLA) and Medigen Biotechnology Corporation (Medigen) today announced they have agreed terms to conclude the Agreement of Strategic Alliance (Strategic Alliance) between the two companies.
Both parties have agreed to end the Strategic Alliance to allow Progen to develop and commercialise PI-88 as rapidly as possible and with maximum flexibility. The removal of the 15% royalty obligation to Medigen means Progen now retains a much larger portion of PI-88's proceeds of commercialisation which significantly increases the value of PI-88 to the Company as it prepares for Phase III.
Key terms:
* The parties agree to end the Strategic Alliance and therefore:
* Medigen has no further obligations to conduct additional clinical
trials of PI-88 following the completion of the current Phase II HCC
trial;
* Medigen foregoes its right to earn a 15% royalty on PI-88 proceeds of
commercialisation received by Progen; and
In consideration for Medigen agreeing to end the Strategic Alliance and to compensate Medigen for its contribution to the development of PI-88, Progen has agreed to:
* Return to Medigen the 19.9% equity it holds in Medigen;
* Issue 500,000 Progen ordinary shares to Medigen on execution of the
agreement.
* Pay Medigen $A300,000 on execution of the agreement;
* Issue a further 732,600 Progen ordinary shares and pay $A2M in cash or
shares, at Progen's discretion, to Medigen on Medigen completing two
clinical milestones in relation to the current PI-88 Phase II HCC
Trial;
* Pay Medigen up to $A4M on PI-88 achieving specified clinical and
commercial milestones; and
* Issue 1,000,000 options to Medigen upon Medigen providing to Progen the
HCC Phase II Trial Final Study Report.
Mr Justus Homburg, Progen's Chief Executive Officer commented: "We believe this is an excellent opportunity to create a win-win scenario for both companies and create the greatest flexibility for PI-88 to be developed and commercially exploited."
Medigen's Chief Executive Officer, Dr Stanley Chang commented: "The alliance was struck in 2000 and at that time it was never envisaged that Progen would develop PI-88 beyond the completion of Phase II. Our continuing confidence in PI-88 is reflected in our strong desire to hold Progen equity and to agree to future milestone payments that are based on PI-88's success."
About Progen:
Progen Industries Limited is an Australian based globally focused biotechnology company committed to the discovery, development and commercialisation of small molecule pharmaceuticals for the treatment of cancer and other serious diseases.
Progen's three key areas of focus are:
* Clinical Development - via a focused clinical trial program involving
its two compounds PI-88 and PI-166
* Drug Discovery - projects focusing on the development of potent,
selective inhibitors of carbohydrate-protein interactions, which are
implicated in many disease processes
* Manufacturing Services - PI-88 manufacturing development and supply for
the clinical program and contract manufacturing services.
About Medigen:
Medigen Biotechnology Corporation is a Taiwanese company dedicated to the research, development and commercialization of new therapies and innovative technologies. Medigen's scientific scope is oncology, immunology and complimentary alternative medicine which are derived from the Company's R&D team's innovative proprietary Nucleic Acid Testing (NAT) Platform and clinical trial expertise.
Contact:
Linton Burns
Chief Financial Officer
Progen Industries Limited
linton.burns@progen.com.au
Ph: +61 7 3842 3333
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Source: Progen Industries Limited
