Phosphagenics Limited (ASX: POH; AIM: PSG; OTCQX: PPGNY) provides an update on developments with its dietary supplement commercial partner NBTY Inc. (“NBTY”).
As advised to the market in October 2006, NBTY acquired the Ester-E® license agreement between Phosphagenics and Zila Inc. as a consequence of its purchase of Zila Nutraceuticals Inc. (“ZNI”). This agreement, signed in 2003, was for an initial five year term and granted the rights to market Phosphagenics’ vitamin E phosphate as a dietary supplement in the US, Canada and Indonesia.
Since NBTY’s acquisition of ZNI, Phosphagenics and the NBTY group have been in discussions to amend the terms of the license agreement. The parties have been unable to reach agreement and consequently, the NBTY group has given notice to terminate the agreement.
Under the terms of the agreement, the termination will be effective six months after notice. Phosphagenics will therefore be entitled to minimum royalties as specified in the agreement until April 2008 and anticipates minimal financial impact as the agreement was due to expire only a few months later, in July 2008.
Harry Rosen, Phosphagenics President and CEO, said: “Nestlé Nutrition, our partner for medical foods, and Phosphagenics have recently announced a phase 2 clinical trial to establish the efficacy of our vitamin E phosphate in the management of metabolic syndrome.
“We will now pursue alternative commercial arrangements for our vitamin E phosphate in the dietary supplement market. Additionally, following our positive preclinical studies, termination of this agreement opens opportunities to explore and potentially reposition and leverage the use of our vitamin E phosphate in a multitude of markets, thus extracting additional value from the product.”
