TORONTO, CHICAGO and MONTREAL, March 23, 2020 — Medexus Pharmaceuticals Inc. (the “Company” or “Medexus”) (TSX-V: MDP, OTCQB: PDDPF) today provided an update to its shareholders reaffirming the strength of its business and outlining the measures it has taken in light of the COVID-19 healthcare crisis.

Since December 31, 2019, the outbreak of the novel strain of coronavirus, specifically identified as “COVID-19”, has resulted in governments worldwide enacting emergency measures to combat the spread of the virus, including the implementation of travel bans, quarantine periods and social distancing. The World Health Organization has declared COVID-19 a pandemic and, as the crisis deepens in North America, Medexus is actively assessing and responding where possible to its potential impact on the Company’s business.

“Our focus for the past six weeks has been centered on four priorities: (i) the safety of our personnel; (ii) ensuring the continuity of access to our products for our patients who rely on them for their day to day health and well-being; (iii) monitoring the status of our partners in our supply and distribution process, such as the manufacturers of our products and the operators of our warehouses and distribution sites; and (iv) open and frequent communication with all of our key business partners, including our lenders and shareholders”, said Ken d’Entremont, Chief Executive Officer of Medexus.

The welfare and safety of Medexus’ personnel and the individuals with which the business interacts is a key priority for the Company. Medexus has taken prudent steps in accordance with its business continuity procedures to help reduce the spread of the virus and to support and protect the health of its employees, partners and customers. For the most part, these are standard procedures being adopted by companies worldwide that involve working from home where possible and eliminating unnecessary travel. The Company’s offices are being operated by skeleton crews and its commercial team has done an outstanding job quickly and efficiently shifting focus to communicating with the Company’s manufacturers, licensors and customers to maintain a smooth supply chain. While the Company’s sales representatives are no longer visiting health care practitioners in hospitals, clinics or pharmacies in order to respect recommendations for social distancing, Medexus continues to support the growth of its products in other innovative ways. The Company believes these strategies are working well. At this time, none of the Company’s employees have reported testing positive for the COVID-19 virus.

In a crisis situation such as the one presented by the COVID-19 outbreak, it is critical that pharmaceutical companies do everything possible to ensure that the patients who depend on their products continue to receive them. This is of paramount importance to Medexus. Medexus has dedicated resources to daily communication with its manufacturing partners and is not aware of any disruption to the supply of any of its products. The Company continues to monitor the circumstances of its manufacturers in light of COVID-19 and has been assured that appropriate redundancies at the manufacturer level are in place to facilitate the shipment of the Company’s products as planned. The Company is also in regular contact with its downstream network in the United States and Canada, including wholesalers and payors, as well as the governmental and regulatory bodies with which the Company interacts, to provide support and assurance that Medexus will do everything possible to continue to meet their needs.

Ken d’Entremont commented: “We would like to reassure the patients who rely on our products and the shareholders who have invested in our growth that our business remains strong. Our supply channel is secure and we are working to ensure it remains so to support the demand for our products in the market. We have three to six months of inventory in all key product lines and expect additional shipments in the next two weeks that should extend inventory levels to at least six months across all key product lines. Given that older adults and people with autoimmune diseases such as rheumatoid arthritis are more likely to be seriously affected by COVID-19, our goal is to ensure no disruptions in our ability to get our products to the patients who rely on them to manage their disease. In particular, we would like to reassure patients who rely on IXINITY®, the intravenous recombinant factor IX therapeutic for Hemophilia B acquired by Medexus at the end of February, that the product is readily available and we will continue to work towards ensuring their continued access to this life saving medication.”

Unfortunately, the Company expects that COVID-19 will result in meaningful delays in the enrollment of the pediatric trial for IXINITY® as hospitals around the world close their doors to all non-critical patients. Although it is impossible at this time to know the extent of this delay, it does not materially affect any of the Company’s revenue forecasts as the pediatric indication of IXINITY® was considered incremental, and not core, to the Company’s projections.

As the situation continues to be very dynamic, the Company has been working diligently to assess the potential risks posed by COVID-19 on an ongoing basis and to realign its budgets in response to them. While revenue growth (beyond the previously announced accretive impact of the acquisition of IXINITY®) is likely unattainable this fiscal year, based on the information currently available and assuming the continuity of supply, the Company believes the impact of COVID-19 on its prescription driven business, which accounts for approximately 90% of the Company’s revenues, will be limited. The Company expects that certain over-the-counter (OTC) products such as NYDA® – a treatment for lice, the demand for which is closely linked to children interacting – may be reduced in a world of social isolation. However, the impact is far from determined at this time given the seasonality of such products and the uncertainty around how long the COVID-19 outbreak and the related public health measures imposed in response will last. With respect to Rupall®, the Company intends to continue to heavily sample physicians on the product, with the goal of making Rupall® their prescription of choice as allergy season approaches.

On the expense side of the equation, the Company expects to see material savings as travel, marketing and promotional initiatives are materially curtailed during this period of disruption. The Company also expects the aforementioned delay in the IXINITY® pediatric trial to enhance near term cash flow. The Company also notes that the steep decline in the Canadian dollar relative to the US dollar, to the extent it persists, would result in forex gains to the Company as it generates the bulk of its cash flows in US dollars. In addition, while not part of our COVID-19 response, the Company completed a reduction in its work force at the time of its acquisition of IXINITY® to ensure that its long-term business needs are aligned with retaining the right people in the business. The Company anticipates these cost savings largely offsetting any revenue related issues associated with the impact of COVID-19, but will have better visibility in the coming quarter.

Ken d’Entremont further commented: “We continue to conduct business as usual to the extent possible despite the global situation. We remain enouraged by our outlook and confident that the Company we have built with the support of our partners and stakeholders is well positioned to emerge from this global crisis even stronger.”

Notwithstanding that the Company remains well positioned and its business strong, given the unprecedented circumstances and current market environment, the Company believes it prudent at this time to take advantage of all available options to preserve cash and maintain its healthy balance sheet. In accordance with the terms of the debenture indenture entered into between Medexus and Computershare Trust Company of Canada dated as of October 16, 2018 (the “Indenture”), the Company has elected to issue an aggregate of approximately 533,137 common shares in the capital of the Company (the “Common Shares”) to holders of the Company’s 6.0% unsecured convertible debentures (the “Debentures”) in satisfaction of the aggregate $1,260,000 interest payment due to holders of Debentures on March 31, 2020 (the “Interest Payment”). Medexus’ decision to make the Interest Payment in Common Shares reflects the Company’s current focus on protecting the strength of its balance sheet in light of the uncertainty caused by the COVID-19 pandemic. The Company made this decision out of an abundance of caution and, while the full impact of the pandemic remains to be seen, Medexus is confident that it is well positioned to successfully navigate the challenges posed by COVID-19. The Board of Directors of the Company will continue to re-assess this strategy with respect to the payment of the interest on the Debentures on a regular basis.

Holders of Debentures of record as of March 16, 2020 will receive their pro-rata entitlement of the aggregate number of Common Shares issued pursuant to the Interest Payment on March 31, 2020. Common Shares issued pursuant to the Interest Payment to certain insiders of the Company will be subject to a four-month hold period in accordance with the policies of the TSX Venture Exchange (the “TSX-V”). The issuance of the Common Shares is subject to the terms of the Indenture as well as receipt of the approval of the TSX-V. A copy of the Indenture is available on the Company’s SEDAR profile at www.sedar.com.

About Medexus

Medexus is a leading specialty pharmaceutical company with a strong North American commercial platform. The Company’s vision is to provide the best healthcare products to healthcare professionals and patients, through our core values of Quality, Innovation, Customer Service and Teamwork. Medexus Pharmaceuticals is focused on the therapeutic areas of auto-immune disease and pediatrics. The Company’s leading products are: Rasuvo™ and Metoject®, a unique formulation of methotrexate (auto-pen and pre-filled syringe) designed to treat rheumatoid arthritis and other auto-immune diseases; IXINITY®, an intravenous recombinant factor IX therapeutic for use in patients 12 years of age or older with Hemophilia B – a hereditary bleeding disorder characterized by a deficiency of clotting factor IX in the blood, which is necessary to control bleeding; and Rupall®, an innovative allergy medication with a unique mode of action.

For more information, please contact:

 

Ken d’Entremont, Chief Executive Officer
Medexus Pharmaceuticals Inc.
Tel.: 905-676-0003
E-mail: ken.dentremont@medexus.com

 

Roland Boivin, Chief Financial Officer
Medexus Pharmaceuticals Inc.
Tel.: 514-762-2626 ext. 202
E-mail: roland.boivin@medexus.com

Investor Relations (U.S.):

Crescendo Communications, LLC
Tel: +1-212-671-1020
Email: mdp@crescendo-ir.com

Investor Relations (Canada):
Frank Candido
Direct Financial Strategies and Communication Inc.
Tel: 514-969-5530
E-mail: frank.candido@medexus.com

Neither the TSX-V nor its Regulation Services Provider (as that term is defined in the policies of the TSX-V) accepts responsibility for the adequacy or accuracy of this release.

Forward Looking Statements

Certain statements made in this press release contain forward-looking information within the meaning of applicable securities laws (“forward-looking statements”). The words “anticipates”, “believes”, “expects”, “will” and similar expressions are often intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Specific forward-looking statements contained in this press release include, but are not limited to, statements with respect to the potential impact of the COVID-19 pandemic and the Company’s response thereto, including the Company’s balance sheet and cost management strategies and any benefits thereof. These statements are based on factors or assumptions that were applied in drawing a conclusion or making a forecast or projection, including assumptions based on historical trends, current conditions and expected future developments. Since forward-looking statements relate to future events and conditions, by their very nature they require making assumptions and involve inherent risks and uncertainties. The Company cautions that although it is believed that the assumptions are reasonable in the circumstances, these risks and uncertainties give rise to the possibility that actual results may differ materially from the expectations set out in the forward-looking statements. Material risk factors include those set out in the Company’s MD&A under the heading “Risk Factors and Risk Management” and elsewhere in the Company’s other disclosure documents filed with the applicable Canadian securities regulatory authorities from time to time, as well as the risks related to COVID-19. Specifically, third parties on which the Company relies, including its manufacturers, suppliers, licensors and/or distributors, have operations around the world and are exposed to a number of global and regional risks outside of the Company’s control, including but not limited to those related to COVID-19. As the current outbreak of COVID-19 continues or increases in severity or results in expanded or prolonged travel, commercial or other restrictions, it could adversely impact the Company by causing operating, supply or other disruptions, including creating difficulties in the execution of the Company’s marketing plans. In addition, liquidity and volatility, credit availability and market and financial conditions generally could change at any time as a result. Any of these events, in isolation or in combination, could materially and adversely affect the Company’s business and could have a material adverse effect on the Company and its financial results. Given these risks, undue reliance should not be placed on the forward-looking statements contained herein, which apply only as of the date hereof. Other than as specifically required by law, the Company undertakes no obligation to update any forward-looking statements to reflect new information, subsequent or otherwise.

The health and well-being of individuals who rely on our products, their caregivers and community members, healthcare professionals, and our own team is of upmost importance to Medexus Pharma, Inc. We want to reassure the community that we currently do not see any impact to our ability to supply the US market with our products, including IXINITY and Rasuvo.

As the situation with the coronavirus evolves, we are in regular communication with our supply, distribution and pharmacy partners to quickly address any potential supply issues that may arise. And we will keep the community informed should we become aware of any material changes to supply.

As an organization, Medexus Pharma is taking measures in line with the US Centers for Disease Control and Prevention to help ensure the safety of our employees, our products, and the patient communities whom we serve.

For additional questions regarding our products, please visit their respective websites: www.rasuvo.com and www.ixinity.com, or contact any member of our team.

Acquisition Expected to be Immediately Accretive to Adjusted EBITDA1

Announces US$20 Million Credit Facility with MidCap Financial

TORONTO and CHICAGO and MONTREAL, Feb. 28, 2020 (GLOBE NEWSWIRE) — Medexus Pharmaceuticals Inc. (“Medexus” or the “Company”) (TSXV: MDP, OTCQB: PDDPF) today announced that the Company, through its US-based subsidiary, acquired Aptevo BioTherapeutics LLC, a Delaware limited liability company owning the worldwide rights to the commercial hematology asset, IXINITY®, from Aptevo Therapeutics, Inc. (NASDAQ: APVO) (the “Vendor”), a biotechnology company focused on developing oncology, autoimmune and hematology therapeutics (the “Acquisition”). IXINITY® is an intravenous recombinant factor IX therapeutic for use in patients 12 years of age or older with Hemophilia B – a hereditary bleeding disorder characterized by a deficiency of clotting factor IX in the blood, which is necessary to control bleeding.

Key Highlights

  • Medexus Pharma, Inc. (“Medexus US”) acquired Aptevo BioTherapeutics LLC, which owns the worldwide rights to the commercial hematology asset, IXINITY®, for up-front cash consideration of approximately US$30 million (inclusive of approximately US$9.5 million of working capital acquired)
  • For the first nine months of 2019, IXINITY® generated revenues of US$23.4 million, representing year-over-year growth of approximately 40%
  • The U.S. hemophilia B market is approximately US$734 million and growing, with a highly concentrated prescriber base
  • Acquisition strengthens Medexus’ specialty product portfolio and represents a strategic fit with other products in the Medexus business development pipeline
  • Allows Medexus to leverage its U.S. operations for maximum impact through an expanded U.S. product portfolio
  • Expected to be immediately accretive to Adjusted EBITDA1 before acquisition costs
  • Acquisition financed entirely with existing cash and a new US$20 million term loan credit facility with MidCap Financial, an affiliate of Apollo Global Management

Ken d’Entremont, Chief Executive Officer of Medexus, commented, “We are very pleased to announce this transformative acquisition. IXINITY® is an FDA approved product with strong brand equity and a track record of safety, efficacy and growing sales.  This acquisition is perfectly aligned with our corporate strategy to license or acquire accretive specialty products that address essential patient needs, while allowing us to leverage our established North American sales force and infrastructure. Moreover, our ability to execute this transaction through a combination of cash on hand and a new credit facility further illustrates the strength of our balance sheet and projected cash flows.   We appreciate the support provided by MidCap Financial and believe their participation in this financing was fully aligned with our ultimate goal of delivering strong profitability for our shareholders.”

The terms and conditions of the Acquisition are governed by a purchase agreement entered into between Medexus US and the Vendor (the “Purchase Agreement”).  In accordance with and pursuant to the Purchase Agreement, Medexus US delivered up-front cash consideration of approximately US$30 million to the Vendor at closing (inclusive of approximately US$9.5 million of working capital acquired) and is required to make certain deferred payments on net sales of IXINITY® in an amount equal to (i) 2% of net sales until the earlier of (x) the completion of the ongoing U.S. pediatric trial in respect of IXINITY, and (y) June 30, 2022, and (ii) 5% of net sales thereafter until March 1, 2035. In addition, the Purchase Agreement requires Medexus US to make certain milestone payments upon IXINITY®’s receipt of Canadian and European regulatory approval in each of Germany, France, Spain, Italy and the United Kingdom and upon IXINITY® achieving worldwide annual net sales of US$120 million, if achieved by March 1, 2035.  

New Credit Facility

Concurrently with the closing of the Acquisition, the Company entered into a definitive credit agreement with a syndicate of lenders (the “Lenders”) agented by MidCap Financial, in respect to a US$20 million secured term loan (the “Term Loan”), having a term of 40 months.

The Company and its active subsidiaries (including Aptevo BioTherapeutics LLC) are the borrowers under the Term Loan. Each borrower is jointly and severally liable for all obligations of all borrowers under the Term Loan.  The Term Loan is secured by a first-priority security interest in all existing and after-acquired assets of the Company and each other borrower. Borrowings under the Term Loan bear interest at an annual rate of one-month LIBOR plus 6.5%, subject to a LIBOR floor of 1.50%.  Interest on the outstanding balance of the Term Loan is payable monthly in arrears.

The Term Loan was used by the Company to fund a portion of the purchase price of the Acquisition and to pay transaction fees in connection therewith.

In connection with the Term Loan, subject to receipt of final acceptance by the TSX Venture Exchange (the “TSXV”), the Company will also grant to the Lenders warrants to purchase that number of common shares in the capital of the Company (“Common Shares”) equal to 2.00% of the amount funded under the Term Loan, converted to the CAD equivalent based on the Bank of Canada noon exchange rate divided by the exercise price (the “Exercise Price”). The Exercise Price will be equal to today’s closing price of the Common Shares on the TSXV. The Lender warrants will expire concurrently with maturity of the Term Loan.

About Medexus Pharmaceuticals Inc.

Medexus is a leading specialty pharmaceutical company with a strong North American commercial platform. The Company’s vision is to provide the best healthcare products to healthcare professionals and patients, through our core values of Quality, Innovation, Customer Service and Teamwork. Medexus is focused on the therapeutic areas of auto-immune disease and pediatrics. The leading products are Rasuvo™ and Metoject®, a unique formulation of methotrexate (auto-pen and pre-filled syringe) designed to treat rheumatoid arthritis and other auto-immune diseases; and Rupall™, an innovative allergy medication with a unique mode of action.

For further information, please contact:
Ken d’Entremont, Chief Executive Officer
Medexus Pharmaceuticals Inc.
Tel: 905-676-0003
E-mail: ken.dentremont@medexus.com  

Roland Boivin, Chief Financial Officer
Medexus Pharmaceuticals Inc.
Tel: 514-762-2626 ext. 202
E-mail: roland.boivin@medexus.com  

Investor Relations (U.S.):
Crescendo Communications, LLC
Tel: +1-212-671-1020
E-mail: mdp@crescendo-ir.com

Investor Relations (Canada):
Frank Candido
Direct Financial Strategies and Communication Inc.
Tel: 514-969-5530
E-mail: frank.candido@medexus.com

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward Looking Statements

Certain statements made in this press release contain forward-looking information within the meaning of applicable securities laws (“forward-looking statements”). The words “anticipates,” “believes,” “expects,” will,” and similar expressions are often intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Specific forward-looking statements contained in this press release include, but are not limited to, statements with respect to the expected synergies of the Acquisition and statements regarding expected impact of the Acquisition on the Company’s Adjusted EBITDA.  These statements are based on factors or assumptions that were applied in drawing a conclusion or making a forecast or projection, including assumptions based on historical trends, current conditions and expected future developments. Since forward-looking statements relate to future events and conditions, by their very nature they require making assumptions and involve inherent risks and uncertainties. The Company cautions that although it is believed that the assumptions are reasonable in the circumstances, these risks and uncertainties give rise to the possibility that actual results may differ materially from the expectations set out in the forward-looking statements. Material risk factors include those set out in the Company’s MD&A under the heading “Risk Factors and Risk Management” and elsewhere in the Company’s other disclosure documents filed with the applicable Canadian securities regulatory authorities from time to time. Given these risks, undue reliance should not be placed on these forward-looking statements, which apply only as of the date hereof. Other than as specifically required by law, the Company undertakes no obligation to update any forward-looking statements to reflect new information, subsequent or otherwise.

_______________________

1 The Company uses both International Financial Reporting Standards (“IFRS”) and certain non-IFRS measures to assess performance. Non-IFRS measures do not have any standardized meaning prescribed by IFRS and are unlikely to be comparable to any similar measures presented by other companies. Non-IFRS measures, as presented herein include adjusted earnings before interest, tax, depreciation and amortization (“Adjusted EBITDA”). Please refer to the section entitled “Cautionary Note Regarding Non-IFRS Financial Measures” in the Company’s most recent management discussion and analysis (“MD&A”) filed under SEDAR profile at www.sedar.com for the definition and historical reconciliation to the most comparable IFRS measure.  

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF UNITED STATES SECURITIES LAW.

MONTREAL, Oct. 16, 2018 — Pediapharm Inc. (“Pediapharm“) (TSXV: PDP, OTCQB: PDDPF) is pleased to announce the closing of its previously announced acquisitions of two speciality pharmaceutical companies, transforming the company through increased portfolio diversification, expanded therapeutic areas and established commercial infrastructure in the U.S. market.

Sylvain Chretien Chief Executive Officer of Pediapharm and Ken d’Entremont, Chief Executive Officer of Medexus, together stated “We are pleased to have collaborated in this transformative deal for specialty pharma in North America. The combination of the three companies brings increased scale with strong organic growth from existing product portfolios and a solid presence in both Paediatrics and Rheumatology.

This bold new company is well capitalized to fund future development. A focused management team along with an experienced board of directors are in place to help guide growth for success. We look forward to working together in this exciting new organization.”

THE ACQUISITIONS

Pediapharm completed the acquisition of all of the issued and outstanding shares of Medexus Inc. (“Medexus“), a Canadian pharmaceutical innovator with strategic partnerships in key international markets (the “Medexus Acquisition“). The total consideration paid by Pediapharm for the Medexus Acquisition is approximately CDN$23 million, which was satisfied through the issuance of 67,646,009 common shares of Pediapharm (the “Common Shares“) to former holders of Medexus shares, at a deemed issue price of CDN$0.34 per Common Share.

Pediapharm also completed the acquisition of all of the issued and outstanding shares Medac Pharma, Inc. (“Medac Pharma“), a privately held specialty pharmaceutical company focusing primarily in the area of rheumatology in the United States, from medac Gesellschaft für klinische Spezialpräparate m.b.H. (“medac GmbH“) (the “Medac Pharma Acquisition” and, together with the Medexus Acquisition, the “Acquisitions“). The total consideration payable by Pediapharm for the Medac Pharma Acquisition is up to U.S. $50 million, of which a cash payment of U.S. $13.1 million was paid on closing, together with the issuance of 7,260,235 units of Pediapharm (the “Consideration Units“) with a value of approximately U.S. $1.9 million with an issue price of CDN$0.34 per Consideration Unit. Each Consideration Unit consists of one Common Share and one half of one Common Share purchase warrant (each such full warrant being exercisable into one Common Share for a period of five years at an exercise price of CDN$0.63 per share). A contingent cash payment of U.S. $5 million and annual payments in an amount equal to 7.5% of the aggregate consolidated EBITDA of Pediapharm, subject to certain agreed-upon adjustments and until such time as an aggregate of U.S. $30 million in annual payments have been made, are also payable in connection with the Medac Pharma Acquisition, all as more particularly described in Pediapharm’s press release dated September 6, 2018.

Concurrent with closing of the Medac Pharma Acquisition, medac GmbH, Pediapharm and Medac Pharma entered into a manufacturing and supply agreement (the “Medac Supply Agreement“) for an initial term of 12 years from the completion of the Medac Pharma Acquisition, which Medac Supply Agreement will provide for the continued supply of products by medac GmbH to Pediapharm for sale in the United States by Pediapharm. In addition, the existing supply agreement between medac GmbH and Medexus was extended, on its existing financial terms, such that it expires 12 years from the date of the completion of the Medac Pharma Acquisition.

CONVERSION OF SUBSCRIPTION RECEIPTS

In connection with the completion of the Acquisitions, Pediapharm has satisfied all of the conditions necessary for the subscription receipts of Pediapharm (the “Subscription Receipts”) issued pursuant to Pediapharm’s brokered offering co-led by Cormark Securities Inc. and Mackie Research Capital Corporation, and non-brokered private placement offering, as described in Pediapharm’s press releases dated September 6, 2018 and October 11, 2018, to automatically convert into an aggregate of: (i) 58,676,397 units (“Units“), consisting of one Common Share (“Common Share“) and one half of one Common Share purchase warrant (each such full warrant being exercisable into one Common Share for a period of five years at an exercise price of CDN$0.63 per share); and (ii) $42 million principal amount of convertible debentures (“Convertible Debentures being convertible into units (“Conversion Units”) consisting of one (1) Common Share and one half of one Common Share purchase warrant (each such full warrant being exercisable into one Common Share for a period of five years at an exercise price of CDN$0.63 per share) at a conversion price of CDN$0.42 per Conversion Unit.

Aggregate net proceeds of approximately CDN$58.46 million which had been held in escrow in accordance with the terms of the Subscription Receipts, have been released to Pediapharm. Following completion of the Acquisitions and the conversion of the Subscription Receipts, Pediapharm has an aggregate of 221,193,877 Common Shares outstanding.

PEDIAPHARM BOARD, MANAGEMENT AND CORPORATE MATTERS

Upon completion of the Acquisitions, the board of directors of Pediapharm (the “Board“) has been reconstituted to consist of seven directors, comprised of Pierre Lapalme, Sylvain Chretien, Michael Mueller, Benoit Gravel, Ken d’Entremont, Stephen Nelson and Peter van der Velden. Ken d’Entremont, the Founder, President and Chief Executive Officer of Medexus, has also been appointed the Chief Operating Officer of Pediapharm.

Pediapharm expects to convene and hold a meeting of Pediapharm’s shareholders in December 2018 to obtain the approval of Pediapharm’s shareholders for: (i) a long-term incentive plan of Pediapharm designed to incentivize directors, officers, employees and consultants, and to align their interests with the long-term interests of Pediapharm’s shareholders; (ii) the consolidation of the Common Shares; and (iii) the change of Pediapharm’s name. Further details regarding the proposed longterm incentive plan, share consolidation and name change will be included in the meeting materials to be provided to Pediapharm’s shareholders in connection with such meeting.

Bloom Burton Securities Inc. advised and assisted Pediapharm’s Board in its evaluation of the Acquisitions.

The Acquisitions are subject to the final approval of the TSX Venture Exchange.

About Pediapharm

Pediapharm is the only Canadian specialty pharmaceutical company dedicated to serving the needs of the pediatric community. Its mission is to bring to the Canadian market the latest innovative pediatric products with the objective to improve the health and the well-being of children in Canada. Since its debut in 2008, Pediapharm has entered into numerous commercial agreements with partners from Canada and other countries around the world. Pediapharm’s innovative product portfolio includes NYDA®, a breakthrough treatment for head lice; Relaxa™, an osmotic laxative used to treat constipation; EpiCeram®, a non-steroid emulsion for eczema; naproxen suspension, indicated to treat pain and inflammation due to various conditions, including Juvenile Idiopathic Arthritis; Rupall™, an innovative new allergy medication with a unique mode of action; Otixal™, the first and only antibiotic and steroid combination ear drop available in single, sterile, preservative-free and unitdose packaging; and Cuvposa™, for chronic severe drooling, a condition affecting a significant proportion of cerebral palsy patients.

Medexus, a direct subsidiary of Pediapharm, is a Canadian specialty pharmaceutical company focused on the licensing, registration, marketing, sales and distribution of innovative pharmaceutical products in Canada, with strategic partnerships in key international markets. Medexus has a strong position in the Canadian marketplace and focuses on key growth areas with an emphasis on rheumatology as well as women’s health and dermatology. The healthcare solutions offered by Medexus include: Metoject®, Oralvisc®, Tricovel®, Multi-Gyn®, Calcia®, IronOne®, Monoderma A-C-E-M™, Allergoff® and Triamcinolone Hexacetonide.

Medac Pharma, an indirect subsidiary of Pediapharm, is a specialty pharmaceutical company focusing primarily in the area of rheumatology in the United States through a solid implemented commercial infrastructure. The leading product of Medac Pharma is Rasuvo, an enhanced delivery of methotrexate (auto-pen) to treat rheumatoid arthritis.

This press release is not an offer of the securities for sale in the United States. The securities may not be offered or sold in the United States absent registration or an exemption from registration. The securities will not be publicly offered in the United States. The securities have not been and will not be registered under the U.S. Securities Act, or any state securities laws.

For more information, please contact:

Sylvain Chretien, President and Chief Executive Officer
Pediapharm Inc.
Tel.: 514-762-2626 ext. 201
E-mail: sylvain.chretien@pedia-pharm.com

Roland Boivin, Chief Financial Officer
Pediapharm Inc.
Tel.: 514-762-2626 ext. 202
E-mail: roland.boivin@pedia-pharm.com

Ken d’Entremont, Chief Operating Officer
Pediapharm Inc.
Tel.: 905-676-0003
E-mail: ken.dentremont@medexus.ca

Frank Candido
Direct Financial Strategies and Communication Inc.
Tel. 514-969-5530
E-mail: directmtl@gmail.com

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

READER ADVISORIES

Forward Looking Statements

This press release contains “forward-looking information” within the meaning of applicable securities legislation. Forward looking information includes, but is not limited to, statements with respect to Pediapharm’s future business operation, expectations of gross sales, the opinions or beliefs of management and future business goals, statements regarding the receipt of regulatory approvals and management’s expectations with respect to the future performance of the business of Medexus and Medac Pharma, respectively, acquired as a result of the Acquisitions. All statements, other than of historical fact, that address activities, events or developments that Pediapharm believes, expects or anticipates will or may occur in the future (including, without limitation, statements regarding potential acquisitions and financings) are forward-looking statements. Forward-looking statements are generally identifiable by use of the words “may”, “will”, “should”, “continue”, “expect”, “anticipate”, “estimate”, “believe”, “intend”, “plan” or “project” or the negative of these words or other variations on these words or comparable terminology. Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond Pediapharm’s ability to control or predict, that may cause the actual results of Pediapharm to differ materially from those discussed in the forward-looking statements. Factors that could cause actual results or events to differ materially from current expectations include, among other things, without limitation, failure of the parties to satisfy the conditions necessary to obtain regulatory approvals, failure to realize the expected benefits of the Acquisitions, the risk that the operations of Pediapharm, Medac Pharma and Medexus will not be integrated successfully, the failure to obtain sufficient financing to execute Pediapharm’s business plan; competition; regulation and anticipated and unanticipated costs and delays, and other risks disclosed in Pediapharm’s public disclosure record on file with the relevant securities regulatory authorities. Although Pediapharm believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because Pediapharm can give no assurance that they will prove to be correct. Since forward-looking information addresses future events and conditions, by its very nature they involve inherent risks and uncertainties. Pediapharm’s actual results, performance or achievement could differ materially from those expressed in, or implied by, the forward-looking information and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits that Pediapharm will derive therefrom. Management has included the above summary of assumptions and risks related to forward-looking information provided in this press release in order to provide securityholders with a more complete perspective on Pediapharm’s future operations and such information may not be appropriate for other purposes. Readers should not place undue reliance on forward-looking statements. Readers are cautioned that the foregoing lists of factors are not exhaustive. Additional information on these and other factors that could affect Pediapharm’s operations or financial results are included in reports on file with applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). The forward-looking statements included in this news release are made as of the date of this news release and Pediapharm does not undertake an obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise unless required by applicable securities legislation.

Not for distribution to United States newswire services or for dissemination in the United States. FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF UNITED STATES SECURITIES LAW.

MONTREAL, QUEBEC, September 6, 2018 – Pediapharm Inc. (“Pediapharm“) (TSXV: PDP, OTCQX: PDDPF) is pleased to announce that it has entered into definitive agreements to acquire two speciality pharmaceutical companies and also intends to complete a private placement offering for up to CDN$60 million.

Pediapharm has entered into an amalgamation agreement with Medexus Inc. (“Medexus“), a Canadian pharmaceutical innovator with strategic partnerships in key international markets, whereby Pediapharm will acquire all of the issued and outstanding shares of Medexus (the “Medexus Acquisition“). Pediapharm has also entered into a stock purchase agreement with medac Gesellschaft für klinische Spezialpräparate mbH (“medac GmbH“), a global pharmaceutical company based in Germany, whereby Pediapharm will acquire all of the shares of medac GmbH’s U.S. business, Medac Pharma, Inc. (“Medac Pharma“) (the “Medac Pharma Acquisition” and, together with the Medexus Acquisition, the “Acquisitions“).

Pediapharm intends to complete a concurrent private placement offering (the “Offering“) of subscription receipts for aggregate gross proceeds of approximately CDN$60 million, consisting of a combination of subscription receipts exchangeable for Convertible Debentures (defined below) and subscription receipts exchangeable for Units (defined below). The Offering will consist of both a non-brokered private placement for gross proceeds of approximately CDN$30 million (the “Non-Brokered Offering“) and a brokered private placement for gross proceeds of approximately CDN$30 million (the “Brokered Offering“) co-led by Cormark Securities Inc. and Mackie Research Capital Corporation, as co-lead agents and joint bookrunners (together, the “Agents“).

By combining Pediapharm’s Canadian pediatric speciality pharmaceutical business with the Canadian diversified speciality pharmaceutical business of Medexus and the U.S. rheumatology speciality pharmaceutical business of Medac Pharma, the Acquisitions and Offering (collectively, the “Transactions“) will create a leading North American commercial-stage specialty pharmaceutical company strategically positioned for future growth.

THE ACQUISITIONS

                  Medexus Acquisition

Medexus is a Canadian specialty pharmaceutical company focused on the licensing, registration, marketing, sales and distribution of innovative pharmaceutical products in Canada, with strategic partnerships in key international markets. Medexus has a strong position in the Canadian marketplace and focuses on key growth areas with an emphasis on rheumatology as well as women’s health and dermatology. The healthcare solutions offered by Medexus include: Metoject®, Oralvisc®, Tricovel®, Multi-Gyn®, Calcia®, IronOne®, Monoderma A-C-E-M™, Allergoff® and Triamcinolone Hexacetonide.

Based on the annual audited financial statements of Medexus for the year ended December 31, 2017, Medexus had annual net revenue of $4.4 million. Based on the interim unaudited financial statements for the three-month period ended June 30, 2018, Medexus had net revenue of $1.39 million.

The total consideration payable by Pediapharm for the Medexus Acquisition is CDN$23 million, which will be satisfied through the issuance of 67,647,059 common shares of Pediapharm (the “PDP Shares“) at an issue price of CDN$0.34 per PDP Share.

The Medexus Acquisition will be completed by way of an amalgamation whereby a wholly-owned subsidiary of Pediapharm, incorporated solely for the purposes of the Medexus Acquisition, will amalgamate with Medexus. Upon completion of the Medexus Acquisition, Ken d’Entremont, the Founder, President and Chief Executive Officer of Medexus, will become a director and the Chief Operating Officer of Pediapharm. Mr. d’Entremont and two other former directors of Medexus have agreed not to sell the PDP Shares issued to them pursuant to the Medexus Acquisition for a period of two years following the closing of the Medexus Acquisition, subject to certain exceptions for Mr. d’Entremont tied to his funding needs for bona fide tax obligations, without the prior approval of Pediapharm.

The Medexus Acquisition is subject to customary closing conditions, including, among other things, TSX Venture Exchange (“TSXV“) approval and the receipt of Medexus shareholder approval of the amalgamation (such approval requiring not less than 662/3% of the votes cast by Medexus shareholders present in person or represented by proxy at the special meeting of Medexus shareholders). Medexus shareholders, that will in the aggregate hold approximately 71.3% of the shares of Medexus entitled to vote at the special meeting of Medexus shareholders that will be convened to approve the amalgamation, have signed customary support and voting agreements under which they have agreed to vote in favour of the amalgamation.

                  Medac Pharma Acquisition

Medac Pharma is a privately held specialty pharmaceutical company focusing primarily in the area of rheumatology in the United States through a solid implemented commercial infrastructure. The leading product of Medac Pharma is Rasuvo, an enhanced delivery of methotrexate (auto-pen) to treat rheumatoid arthritis. Medac Pharma is a wholly owned subsidiary of medac GmbH, a well-known global pharmaceutical company located in Germany that has been making scientific and therapeutic discoveries for more than 40 years.

Based on the annual audited financial statements of Medac for the year ended March 31, 2018, Medac Pharma had annual net revenue of US$24.4 million.

Pursuant to the Medac Pharma Acquisition, all of the shares of Medac Pharma will be acquired by a wholly-owned U.S. subsidiary of Pediapharm, incorporated solely for the purposes of the Medac Pharma Acquisition. The total consideration payable by Pediapharm for the Medac Pharma Acquisition is up to U.S. $50 million, payable as follows:

  • (i) a cash payment of U.S. $13.1 million (the “Closing Cash Payment“) due on closing, to be funded by the proceeds of the Offering;
  • (ii) such number of units of Pediapharm (the “Consideration Units“) equal in value to U.S. $1.9 million, issued at an issue price of CDN$0.34 per Consideration Unit (the “Closing Unit Payment“) with each Consideration Unit consisting of one PDP Share and one half of one PDP Share purchase warrant (each such full warrant being exercisable into one PDP Share for a period of five years at an exercise price of CDN$0.63 per PDP Share). medac GmbH has agreed not to sell the PDP Shares issued or issuable to it under the Medac Pharma Acquisition for a period of two years following the closing of the Medac Pharma Acquisition, without the prior approval of Pediapharm;
  • (iii) a contingent cash payment of U.S. $5 million, payable within six months following the FDA approval of a certain new product to be supplied to Pediapharm by medac GmbH for sale in the United States, or 30 days following the date, provided that such FDA approval has been obtained, that medac GmbH has manufactured and delivered to Pediapharm sufficient quantities of such products to meet the forecasted launch demand for such product in the United States; and
  • (iv) annual payments in an amount equal to 7.5% of the aggregate consolidated EBITDA of Pediapharm (the “Trailer Payments“), subject to certain agreed-upon adjustments, until such time as an aggregate of U.S. $30 million in Trailer Payments have been made.

The Closing Cash Payment and the Closing Unit Payment shall be subject to adjustment with respect to the allocation of cash and Consideration Units at closing, all in accordance with the terms of the Medac Pharma Acquisition agreement, but the aggregate closing consideration paid shall be equal to U.S. $15 million.

Contemporaneously with the completion of the Medac Pharma Acquisition, medac GmbH will enter into a manufacturing and supply agreement (the “Medac Supply Agreement“) with Pediapharm and Medac Pharma for an initial term of 12 years from the completion of the Medac Pharma Acquisition, which Supply Agreement will provide for the continued supply of products by medac GmbH to Pediapharm for sale in the United States by Pediapharm.  In addition, the term of the existing supply agreement between medac GmbH and Medexus will be extended, on its existing financial terms, such that it expires 12 years from the date of the completion of the Medac Pharma Acquisition.

As part of the Medac Pharma Acquisition, during the term of the Medac Supply Agreement, medac GmbH has granted to Pediapharm a right of first refusal with respect to the commercialization in the United States or Canada of certain specified products of medac GmbH that medac GmbH wishes to commercialize for use in the United States or Canada during the term of the Medac Supply Agreement.

The Medac Pharma Acquisition is subject to customary closing conditions, including, among other things, TSXV approval.

Subject to the timely completion of the Offering, and other customary closing conditions, it is expected that the Acquisitions will be completed on or about September 28, 2018.

THE OFFERING

In connection with the Acquisitions, Pediapharm intends to complete the Offering consisting of a combination of subscription receipts exchangeable for Convertible Debentures (“Debenture Subscription Receipts“) and subscription receipts exchangeable for Units (“Unit Subscription Receipts” and, collectively with the Debenture Subscription Receipts, the “Subscription Receipts“). The gross proceeds from the Offering, will be placed in in escrow pending the satisfaction of certain escrow release conditions (the “Escrow Release Conditions“) to be set out in a subscription receipt agreement to entered into in connection with the Offering (the “Subscription Receipt Agreement“), including the completion, satisfaction or waiver of all conditions precedent to the completion of the Acquisitions and the receipt of necessary approvals for the Offering and the Acquisitions. Upon the satisfaction of the Escrow Release Conditions, the net proceeds of the Offering will be used to fund the cash consideration due on closing of the Medac Pharma Acquisition, with the balance of the proceeds to used for the ongoing operations and strategic initiatives of Pediapharm.

The Debenture Subscription Receipts shall be issued at a price of CDN$1,000 per Debenture Subscription Receipt. Each Debenture Subscription Receipt shall, following the satisfaction of the Escrow Release Conditions, without payment of additional consideration or further action, automatically be exchanged for one CDN$1,000 principal amount convertible debenture (a “Convertible Debenture“), which Convertible Debenture shall be convertible into units (“Conversion Units“) at a conversion price of CDN$0.42 per Conversion Unit. Each Conversion Unit shall be comprised of one PDP Share and one half of one PDP Share purchase warrant (each such full warrant being exercisable into one PDP Share at an exercise price of CDN$0.63 per PDP Share for a period of five years from the date the Convertible Debentures are issued). The Convertible Debentures will mature on the date that is the fifth anniversary of the date of issuance and shall be repaid in full by Pediapharm with a payment equal to 125% of such outstanding principal amount, with such repayment to be made in cash or, at Pediapharm’s option, in PDP Shares. The Convertible Debentures will bear interest at 6.0% per annum beginning on the date the Debenture Subscription Receipts are exchanged for Convertible Debentures, payable semi-annually in cash, or, at Pediapharm’s option and subject to the prior approval of the TSXV, in PDP Shares.

The Unit Subscription Receipts shall be issued at a price of CDN$0.34 per Unit Subscription Receipt. Each Unit Subscription Receipt shall, following the satisfaction of the Escrow Release Conditions, without payment of additional consideration or further action, automatically be exchanged for a unit of Pediapharm (a “Unit“) comprised of one PDP Share and one half of one PDP Share purchase warrant (each such full warrant being exercisable into one PDP Share at an exercise price of CDN$0.63 per PDP Share for a period of five years from the date the Units are issued).

Pediapharm has signed an engagement letter with the Agents, under which the Agents have agreed to offer for sale, on a best efforts basis, the Subscription Receipts under the Brokered Offering.

The Non-Brokered Offering is being assisted by Goodwood Inc. (“Goodwood“) pursuant to the Transaction Agreement (as further described below).

The Subscription Receipts will be distributed by way of private placement in all the provinces of Canada, to investors in the United States pursuant to available exemptions from the registration requirements of the United States Securities Act of 1933, as amended, and in such certain other jurisdictions as Pediapharm and the Agents may agree. Completion of the Offering is subject to certain customary closing conditions, including approval of the TSXV. Closing of the Offering is expected to occur on or about September 21, 2018.

In connection with the Offering, Pediapharm will pay commissions to the Agents equal to a cash fee of 7.0% for the gross proceeds raised in the Brokered Offering, and will issue PDP Share purchase warrants (“Broker Warrants“) to the Agents equal to 3.5% of the gross proceeds raised in the Brokered Offering, with each Broker Warrant exercisable for one PDP Share, at an exercise price of CDN$0.63 per PDP Share, for a period of 36 months following closing. Pediapharm may also pay cash commissions of up to 7% on a portion of the funds raised in respect of the Non-Brokered Offering to one or more registered dealers involved in the Non-Brokered Offering, provided that no commissions will be paid to Goodwood.

                  The Transaction Agreement

In connection with Transactions, Pediapharm has entered into a transaction agreement with Goodwood (the “Transaction Agreement“). In accordance with the Transaction Agreement, one or more investment funds managed by Goodwood, together with the other purchasers under the Non-Brokered Offering, are expected to purchase approximately CDN$30 million of Subscription Receipts.

Pediapharm has also agreed that, contemporaneously with the completion of the Transactions, Pediapharm and Goodwood (or an affiliate thereof) will enter into a consulting agreement pursuant to which Goodwood (or an affiliate thereof) will provide strategic advisory services to Pediapharm for four years. Under such consulting agreement, Goodwood will be paid a fee of CDN$120,000 per annum.

PEDIAPHARM BOARD

Upon completion of the Transactions, the board of directors of Pediapharm (the “Board“) will be reconstituted to consist of seven directors, comprised of four existing directors (Pierre Lapalme, Sylvain Chretien, Michael Mueller and Benoit Gravel) and three new directors (Ken d’Entremont, Stephen Nelson and Peter van der Veldan). Biographies of Messrs. d’Entremont, Nelson and van der Veldan are set forth below.

In connection with the Transactions, Pediapharm expects to convene and hold a meeting of Pediapharm’s shareholders following the completion of the Transactions to obtain the approval of Pediapharm’s shareholders for: (i) a long-term incentive plan of Pediapharm designed to incentivize directors, officers, employees and consultants, and to align their interests with the long-term interests of Pediapharm’s shareholders; (ii) the consolidation of the PDP Shares; and (iii) the change of Pediapharm’s name. Further details regarding the proposed long-term incentive plan, share consolidation and name change will be included in the meeting materials to be provided to Pediapharm’s shareholders in connection with such meeting.

Bloom Burton Securities Inc. advised and assisted Pediapharm’s Board in its evaluation of the Transactions.

Biographies

Ken d’Entremont

Ken d’Entremont is the founder, President and Chief Executive Officer of Medexus and is a member of the Medexus board of directors. Mr. d’Entremont is a highly qualified pharmaceutical executive who has over 30 years of pharmaceutical industry experience. During the course of Mr. d’Entremont’s career, he has occupied various executive positions of increasing seniority, including VP sales & marketing, VP business development and GM for Sanofi Canada. Mr. d’Entremont has been instrumental in the growth and success of Medexus, which has provided him with extensive experience in running an emerging growth company and driving successful corporate development activities and product launches in the life sciences and healthcare sectors. Mr. d’Entremont holds a B.Sc. Chemistry from McMaster University.

Stephen Nelson

Stephen Nelson is Senior Vice-President, Portfolio Manager and Investment Advisor with TD Wealth Private Investment Advice. Mr. Nelson has been with TD Bank for over 20 years, and works out of TD’s flagship office in Toronto, Ontario. Mr. Nelson currently manages over $2 billion of investment assets. His performance as a portfolio manager and investment advisor has resulted in his designation as a member of TD Waterhouse’s President’s Club for the past 16 consecutive years. Mr. Nelson has served as a director of a number of private companies and is a noted author of bestselling finance texts. He graduated with a four-year degree in Economics from the University of Western Ontario.

Peter van der Velden

Peter van der Velden is a highly experienced investor and operator with demonstrated success in venture and buyout investing, transaction structuring, strategic planning, corporate restructuring and operational management. His entire career has focused on building innovative, life science, consumer and technology centric companies from start-up through to expansion. Mr. van der Velden is currently the Managing General Partner of Lumira Capital, Canada’s largest dedicated life sciences venture capital investor, which seeks to identify, invest in and help to build transformative healthcare companies located in North America. Lumira’s successes include multiple billion dollar market capitalization companies including: Pharmasset (acquired by Gilead), Mako Surgical (acquired by Stryker) and G1 Therapeutics (NASDAQ:GTHX). In addition to a number of investee company board roles, he is currently a board member for the World Health Innovation Network, a committee member for Ontario’s Scale Up Voucher program, and on the Commercialization Advisory Board for Sick Kids Hospital and he was a member of the Government of Ontario’s, Ontario Health Innovation Council whose mission was to enhance the adoption of Ontario based innovation by the Ontario health care system. He is also a past President, Chairman and Director of the Canadian Venture and Private Equity Association where, in addition to leading the restructuring and repositioning of the organization, he worked closely with the Federal government on its Venture Capital Action Plan. Previously, Mr. van der Velden was the founder of a boutique merchant bank focused on private technology companies, head of investment banking for a boutique investment bank focused on public technology companies, a partner in a buyout partnership targeting retail and consumer-centric businesses, vice president of business development for a venture capital-backed drug delivery company, and an associate at Canada’s then-largest venture capital firm. Mr. van der Velden holds degrees from the Schulich School of Business (MBA finance and policy) and Queen’s University (M.Sc. (pathology), B.Sc. (honours life sciences)).

About Pediapharm

Pediapharm is the only Canadian specialty pharmaceutical company dedicated to serving the needs of the pediatric community. Its mission is to bring to the Canadian market the latest innovative pediatric products with the objective to improve the health and the well-being of children in Canada. Since its debut in 2008, Pediapharm has entered into numerous commercial agreements with partners from Canada and other countries around the world. Pediapharm’s innovative product portfolio includes NYDA®, a breakthrough treatment for head lice; Relaxa™, an osmotic laxative used to treat constipation; EpiCeram®, a non-steroid emulsion for eczema; naproxen suspension, indicated to treat pain and inflammation due to various conditions, including Juvenile Idiopathic Arthritis; Rupall™, an innovative new allergy medication with a unique mode of action; Otixal™, the first and only antibiotic and steroid combination ear drop available in single, sterile, preservative-free and unit-dose packaging; and Cuvposa™, for chronic severe drooling, a condition affecting a significant proportion of cerebral palsy patients.

This press release is not an offer of the securities for sale in the United States. The securities may not be offered or sold in the United States absent registration or an exemption from registration. The securities will not be publicly offered in the United States. The securities have not been and will not be registered under the U.S. Securities Act, or any state securities laws.

For more information, please contact:

Sylvain Chretien, President and Chief Executive Officer

Pediapharm Inc.

Tel.: 514-762-2626 ext. 201

E-mail: sylvain.chretien@pedia-pharm.com

 

Roland Boivin, Chief Financial Officer

Pediapharm Inc.

Tel.: 514-762-2626 ext. 202

E-mail: roland.boivin@pedia-pharm.com

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

READER ADVISORIES

Forward Looking Statements

This press release contains “forward-looking information” within the meaning of applicable securities legislation. Forward-looking information includes, but is not limited to, statements with respect to Pediapharm’s future business operation, expectations of gross sales, the opinions or beliefs of management and future business goals, statements regarding the timing and completion of the proposed Acquisitions and the Offering, the use of the net proceeds of the Offering, the satisfaction of the Escrow Release Condition, the value of the consideration to be received by Medexus shareholders in connection with the Medexus Acquisition, which may fluctuate in value due to the consideration consisting of PDP Shares, the ability of the parties to satisfy, in a timely manner, the conditions to closing of the Offering and the Acquisitions, and management’s expectations with respect to the Offering and the Acquisitions. All statements, other than of historical fact, that address activities, events or developments that Pediapharm believes, expects or anticipates will or may occur in the future (including, without limitation, statements regarding potential acquisitions and financings) are forward-looking statements. Forward-looking statements are generally identifiable by use of the words “may”, “will”, “should”, “continue”, “expect”, “anticipate”, “estimate”, “believe”, “intend”, “plan” or “project” or the negative of these words or other variations on these words or comparable terminology. Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond Pediapharm’s ability to control or predict, that may cause the actual results of Pediapharm to differ materially from those discussed in the forward-looking statements. Factors that could cause actual results or events to differ materially from current expectations include, among other things, without limitation, failure of the parties to satisfy the conditions necessary to complete the Transactions, failure to realize the expected benefits of the Acquisitions, the risk that the operations of Pediapharm, Medac Pharma and Medexus will not be integrated successfully, the failure to obtain sufficient financing to execute Pediapharm’s business plan; the success of the Rasuvo product offering and pre-filled syringe; guidance on expected sales volumes associated with the Rasuvo product offering and inhalation device; competition; regulation and anticipated and unanticipated costs and delays, and other risks disclosed in Pediapharm’s public disclosure record on file with the relevant securities regulatory authorities. Although Pediapharm believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because Pediapharm can give no assurance that they will prove to be correct. Since forward-looking information addresses future events and conditions, by its very nature they involve inherent risks and uncertainties. Pediapharm’s actual results, performance or achievement could differ materially from those expressed in, or implied by, the forward-looking information and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits that Pediapharm will derive therefrom. Management has included the above summary of assumptions and risks related to forward-looking information provided in this press release in order to provide securityholders with a more complete perspective on Pediapharm’s future operations and such information may not be appropriate for other purposes. Readers should not place undue reliance on forward-looking statements. Readers are cautioned that the foregoing lists of factors are not exhaustive. Additional information on these and other factors that could affect Pediapharm’s operations or financial results are included in reports on file with applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). The forward-looking statements included in this news release are made as of the date of this news release and Pediapharm does not undertake an obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise unless required by applicable securities legislation.

The Medexus management prepared audited financial statement for the year ended December 31, 2017 and the management prepared unaudited financial statements for the three-month period ended June 30, 2018, were prepared in accordance with Canadian accounting standards for private enterprises.

The Medac Pharma management prepared audited financial statements for the year ended March 31, 2017 were prepared in accordance with US GAAP.

CHICAGOFeb. 9, 2018 /PRNewswire/ — Medac Pharma, Inc., a privately held pharmaceutical company, today announced the PTAB has upheld all 22 claims of our parent company medac GmbH’s patent covering its rheumatoid arthritis treatment, Rasuvo®, an auto-injector that provides highly concentrated doses of methotrexate.  This ruling ends the challenge brought by Koios Pharmaceuticals LLC.

“Medac is gratified by the PTAB decision upholding the patentability of all the claims of its ‘231 patent,” stated Medac’s CEO Terri Shoemaker. “The patent, which is based on Medac’s pioneering work to bring methotrexate treatment to patients in need of safe, less painful, and easy to use form, does not expire until 2029.

About Medac Pharma

Medac Pharma, Inc. is a privately held specialty pharmaceutical company focused on the development, in-licensing and commercialization of late-stage molecules.  The company strives to bring new life to products and solve everyday patient challenges in autoimmune disease and cancer.  For more information about Medac Pharma, please visit www.medacpharma.com

Medac Pharma is the wholly-owned subsidiary of medac GmbH, a well-known and respected global pharmaceutical company that has been making scientific and therapeutic discoveries for more than 40 years.  For more information about medac GmbH, please visit www.medac.de

For complete prescribing information, including Boxed Warning, and information on Medac Pharma’s CORE Connections program, please visit www.Rasuvo.com

Medac Media Contact:

Tiberend Strategic Advisors, Inc.
David Schemelia
212-375-2686
dschemelia@tiberend.com

SOURCE Medac Pharma, Inc.

The METOP trial published in The Lancet shows lasting efficacy and safety of subcutaneous methotrexate over one year in plaque-type psoriasis patients

  • The results of the phase 3 METOP trial demonstrate that self-administered subcutaneous methotrexate has a rapid onset of action and is significantly better than placebo in improving the skin condition and quality of life of plaque-type psoriasis, with efficacy and safety sustained over one year.
  • Subcutaneous methotrexate in an intensified dosing schedule showed a favourable 52 week risk-benefit profile in patients with psoriasis. Consideration should be given to the route of administration and intensified dosing schedule when using methotrexate in this patient group.

Wedel, Germany (08 March 2017). Medac announced today that the 1-year results of the METOP trial on subcutaneous methotrexate had been published in The Lancet[1]. Methotrexate has been used in plaque-type psoriasis as an effective systemic treatment for more than 50 years and is considered a first-line therapy according to current treatment guidelines[2],[3]. But so far there have not been any high-quality clinical trials with subcutaneous methotrexate in long-term therapy.

Now, however, new data published in The Lancet show “a favourable 52 week risk-benefit profile of subcutaneous methotrexate in patients with psoriasis. The route of administration and the intensified dosing schedule should be considered when methotrexate is used in this patient group”[1].

The Methotrexate Optimized treatment schedule in patients with Psoriasis (METOP) trial is a randomised, double-blind, placebo-controlled phase 3 trial, evaluating the efficacy and safety of self-administered subcutaneous methotrexate in patients with moderate to severe plaque-type psoriasis using an optimised dosing regimen[4]. The trial enrolled a total of 120 adult patients with plaque-type psoriasis from 13 centres in Germany, France, the Netherlands and the United Kingdom. As one of the conditions for entry to the trial, patients had to have been diagnosed at least 6 months beforehand. Individuals that previously underwent a MTX-therapy, as well as those with highly active psoriatic arthritis, hepatic impairment or a low leucocyte count were excluded from the trial.

Trial participants received a weekly methotrexate starting dose of 17.5 mg subcutaneously using a pre-filled syringe. If, by week 8, patients had not achieved at least a 50% improvement in the Psoriasis Area and Severity Index (PASI) score, the dose was increased to 22.5 mg/week. The placebo group switched to methotrexate after week 16. The treatment was continued up until week 52 in the whole patient population.

As the study in The Lancet reports, 41% in the methotrexate group and 10% in the placebo group achieved a PASI 75 in week 16. The response rates continued to increase up until week 52, by which time 45% in the methotrexate group had a PASI 75 and almost a third of subjects met the criteria for a PASI 90[1].

Quality of life had improved after just 16 weeks in 59% of methotrexate-treated patients and at this point 43% no longer had any impairment. In the placebo group, the figures were only 34% and 10%, respectively.

No serious adverse reactions were observed. As expected, gastrointestinal complaints and elevations of liver enzymes occurred more often on methotrexate compared with placebo. A small proportion of subjects was suffering from fatigue.

In a substudy the molecular mechanism of action of subcutaneous methotrexate in psoriasis was investigated. Skin samples were taken at the start of the trial and after 16 weeks of treatment. The biopsies of the PASI 75 responders were found to have reduced mRNA expression of pro-inflammatory cytokines: compared with baseline, IL-17 mRNA expression fell to 10% and that of interferon γ to 25%. A clinical response was, moreover, associated with a significant reduction in important inflammatory cells such as the CD11c+ dendritic cells and CD3+ T cells. Values close to those in healthy skin were achieved.

The results of the METOP trial show that subcutaneous injection of methotrexate 50 mg/ml using a starting dose of 17.5 mg/week greatly reduces the severity of plaque-type psoriasis and improves quality of life while at the same time being well tolerated. Furthermore, the demonstrated correlation between the reduction in specific cytokines and inflammatory cells suggests an inhibitory effect of methotrexate on the TH1/TH17 pathway in the skin.

The study results published in The Lancet support the subcutaneous administration of methotrexate for the treatment of psoriasis. They also underline the current European[2] and US[5] guidelines recommending methotrexate as a cost-effective[6] systemic first-line treatment in psoriasis.

 

  1. Warren, RB et al., An intensified dosing schedule of subcutaneous methotrexate in patients with moderate to severe plaque-type psoriasis (METOP): a 52 week, multicentre, randomised, double-blind, placebo-controlled, phase 3 trial. Lancet. 2017;389:528-537
  2. Nast A et al., European S3-Guidelines on the systemic treatment of psoriasis vulgaris – Update 2015 – Short version – EDF in cooperation with EADV and IPC. J Eur Acad Dermatol Venereol 2015;29:2277-2294
  3. Warren, RB et al., British Association of Dermatologists’ guidelines for the safe and effective prescribing of methotrexate for skin disease 2016. Br J Dermatol. 2016;175:23-44
  4. ClinicalTrials.gov: Trial in Patients With Psoriasis Treated With Methotrexate Using an Optimized Treatment Schedule (METOP). https://clinicaltrials.gov/ct2/show/NCT02902861 (06.03.2017)
  5. Menter A et al., Guidelines of care for the management of psoriasis and psoriatic arthritis: section 6. Guidelines of care for the treatment of psoriasis and psoriatic arthritis: case-based presentations and evidence-based conclusions. J Am Acad Dermatol 2011; 65:137-174
  6. D’Souza LS et al., Estimated cost efficacy of systemic treatments that are approved by the US Food and Drug Administration for the treatment of moderate to severe psoriasis. J Am Acad Dermatol 2015;72:589-598

 

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Volker Bahr
Tel. +49 (0)4103 – 8006 9111
Fax +49 (0)4103 – 8006 8934
presse@medac.de

medac Gesellschaft für klinische Spezialpräparate mbH
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www.medac.de

medac Gesellschaft für klinische Spezialpräparate mbH
medac is a privately held German pharmaceutical company located in Wedel, Tornesch and Hamburg. Medicinal products from medac support doctors and patients throughout the world in overcoming their acute and persistent diseases in the indication areas of oncology & haematology, urology and autoimmune disorders. In addition, medac develops and markets special diagnostic test systems. Since 1970, medac has been committed to unifying therapeutic and diagnostic agents under one roof.

You can find further information on the company and its products on the internet under www.medac.de.