Hemosol to start anew with ProMetic plasma deal
THURSDAY, DECEMBER 04, 2003 9:10 AM
- Reuters U.S. Company News
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TORONTO, Dec 4 (Reuters) - Hemosol Inc (CA:HML) (HMSL) said on Thursday it had signed a cash and stock deal worth C$18 million with a subsidiary of ProMetic Life Sciences (CA:PLI) that will allow Hemosol, trials of whose blood-substitute product were halted, to enter new areas of business.
Hemosol has agreed to issue 2 million common shares to ProMetic and will also pay C$16.5 million over four years. Part of the fee will be covered by issuing 1 million Hemosol common shares. Hemosol will also pay royalties between 5 percent to 8 percent on product sales.
Under the terms of the deal, the American Red Cross will supply Hemosol with about 500,000 liters of plasma a year, from which it will separate proteins at recently built facility near Toronto.
Hemosol had built the C$90 million facility to manufacture its Hemolink blood substitute. But Hemolink trials were halted earlier this year after an independent review committee observed a higher incidence of heart attacks among patients treated with Hemolink.
Hemosol will used ProMetic's technology to separate proteins from the plasma at its facility, which can process up to a million liters of plasma a year.
Products derived from plasma are used to treat more than one million patients each year for conditions such as hemophilia and burns. Sales of such products amounted to $5.6 billion in 2002 and are expected to grow 8 percent over the next three years, Hemosol said.
It said the alliance will allow both Hemosol and ProMetic, headquartered in Montreal, to grow revenue.
Hemosol's shares have fallen 57 percent this year, closing at 90 Canadian cents in Toronto on Wednesday. ProMetic's shares have risen 2 percent this year. They closed at C$1.97 on Wednesday
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