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Alliqua (ALQA) Enters Agreement for Exclusive SORBION Products Distribution Rights

July 7, 2016 7:32 AM EDT
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Alliqua BioMedical, Inc. (Nasdaq: ALQA) announced that Alliqua signed a definitive agreement with BSN medical, Inc. (“BSN”), a global integrated medical therapy provider for the sale to BSN of Alliqua’s exclusive distribution rights for SORBION SACHET and SORBION SANA primary dressings in the United States, Canada and Latin America. Subject to the terms and conditions of the definitive agreement, BSN will pay Alliqua total consideration of up to $4.4 million for the purchase by BSN of all of the rights out of Alliqua’s existing distribution agreement with former Sorbion GmbH & Co KG (now owned by BSN medical).

“The sale of Alliqua’s exclusive distribution rights for the SORBION® dressing products represents an opportunity for us to add important growth capital to our balance sheet and to focus our future investments on commercializing our own highly differentiated advanced wound care and regenerative technologies in MIST® Therapy, BIOVANCE® and, later this year, Interfyl™,” said David Johnson, Chief Executive Officer of Alliqua.

“We believe our entire experience with the distribution rights for the SORBION® dressings is illustrative of the strong value creation that our organization can provide in the wound care space,” Johnson continued. “After identifying an unmet need in the U.S. market, we secured the distribution rights for the SORBION® dressings in late-2013, and leveraged our highly-focused wound care distribution infrastructure to establish the product franchise in the U.S. and ultimately grow it into a strong commercial line in just two and a half years.”

“BSN medical is one of the few research-based wound care companies that can offer a comprehensive portfolio of integrated therapeutic solutions. We are very excited that SORBION® products are now also part of our wound care and vascular franchise in the world´s largest markets, the U.S., Canada and Latin America. With their patent-protected design and best-in-class superabsorbent core built on Hydrokinetic® fibers and Hydration Response® technology, these products offer an innovative therapeutic choice for patients suffering from particularly challenging wounds with high levels of exudate,” Dr Guido Oelkers, Chief Executive Officer of BSN medical Group, stated.

“This agreement is a perfect strategic fit for BSN medical following our acquisition of SORBION, as we just recently announced the launch of two new wound care products in the U.S., including products featuring BSN´s DACC Technology, a powerful alternative to silver antimicrobial dressings. With this step we are fueling our growth plans in the American markets and will strengthen our position in the therapeutic area of advanced wound care,” Oelkers commented.

The above description of the definitive agreement does not purport to be complete and is qualified in its entirety by reference to the definitive agreement, which Alliqua will file as exhibit to its Securities and Exchange Commission filings.

Background: In September, 2013, Alliqua Biomedical signed an agreement with Sorbion GmbH & Co KG, pursuant to which Alliqua became the exclusive distributor of SORBION SACHET® and SORBION® SANA in the United States, Canada and Latin America. In November 2014, BSN medical announced the acquisition of Sorbion GmbH & Co. KG, Germany, as a result of which all of the rights and obligations under Alliqua’s distribution agreement were assigned to BSN. The term of Alliqua’s distribution agreement was scheduled to end on December 31, 2018.

Alliqua Fiscal Year 2016 Revenue Outlook:

Alliqua is updating its revenue guidance for the fiscal year 2016 period, which was originally issued on February 23, 2016 and reaffirmed on May 10, 2016, to account for the anticipated impact of the transition of distribution rights for SORBION® products.

For the fiscal year ending December 31, 2016, Alliqua now expects total revenue of $20 million to $22 million. This updated guidance range compares to the prior range of $22 million to $24 million, and represents growth in the range of approximately 33% to 46% year-over-year and growth in the range of approximately 5% to 15% on a pro forma basis, assuming Alliqua had recorded a full year of MIST® Therapy revenue. Revenue on a pro forma basis for the fiscal year ended December 31, 2015 was approximately $19.1 million. Alliqua acquired MIST® Therapy through its acquisition of Celleration on May 29, 2015. Alliqua will use approximately $1.75 million of the proceeds of this transaction to reduce its outstanding debt balance in accordance with its Credit Agreement with Perceptive Credit Opportunities Fund, L.P.



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