QLT ANNOUNCES SALE OF QLT USA, INC. FOR UP TO US$230 MILLION
FOR IMMEDIATE RELEASE OCTOBER 01, 2009
VANCOUVER, CANADA-QLT Inc. (NASDAQ: QLTI; TSX: QLT) ("QLT" or the "Company") today announced that it has completed the sale of all of the shares of its wholly-owned U.S. subsidiary, QLT USA, Inc. ("QLT USA"), to TOLMAR Holding, Inc. ("TOLMAR") for up to an aggregate US$230 million pursuant to a Stock Purchase Agreement dated October 1, 2009. QLT USA's principal operating asset is the Eligard® line of products for the treatment of prostate cancer. The Eligard line of products is currently manufactured by TOLMAR, Inc., a wholly-owned subsidiary of TOLMAR.
Under the Stock Purchase Agreement, QLT received US$20 million on closing and will receive US$10 million on or before October 1, 2010 and up to an additional US$200 million payable on a quarterly basis in amounts equal to 80% of the royalties paid under the license agreements with each of Sanofi-Synthelabo Inc. and MediGene Aktiengesellschaft for the commercial marketing of Eligard in Canada, the United States and Europe (beginning with the royalties payable for Eligard sales that occurred in the quarter ended September 30, 2009) until the earlier of QLT receiving the additional US$200 million or the expiry of the Stock Purchase Agreement on October 1, 2024. In addition, under the terms of the Stock Purchase Agreement, TOLMAR will pay QLT an additional amount for the shares of QLT USA equal to the balance of cash that QLT USA had on-hand at closing, substantially all of which had been reflected in QLT's consolidated balance sheet at June 30, 2009. The net after-tax proceeds of this transaction are expected to be approximately US$230 million, assuming the entire additional US$200 million is paid.
"Eligard has been a very strong revenue stream for us and we believe this deal reflects the robustness of the Eligard franchise," said Bob Butchofsky, President and Chief Executive Officer of QLT. "This is the last asset sale in a series of divestments and licensing agreements that the Company commenced in early 2008. As a result, we are very pleased to have completed our transition into a company focused solely in the ocular therapeutic area."
Goldman, Sachs & Co. acted as financial advisor to QLT in connection with this transaction.
About Eligard®
Eligard®, a palliative treatment for advanced prostate cancer, incorporates a luteinizing hormone-releasing hormone agonist, or LHRH agonist, known as leuprolide acetate, with QLT USA's proprietary Atrigel® drug delivery system. The Eligard line of products is marketed through commercial licensees and includes one, three, four and six month commercial formulations of Atrigel technology combined with leuprolide acetate. Eligard is currently manufactured by TOLMAR, Inc. at its Fort Collins, Colorado facility. On August 25, 2008, QLT USA entered into an exclusive license agreement with Reckitt Benckiser Pharmaceuticals Inc. for the Atrigel drug delivery technology, except for certain rights retained by QLT USA and its prior licensees, including rights retained for use with the Eligard products.
Eligard works by lowering the levels of testosterone in the body, which may result in a reduction of symptoms related to the disease. Sustained levels of leuprolide decrease testosterone levels to suppress tumor growth in patients with hormone-responsive prostate cancer. The liquid Eligard products are injected subcutaneously with a small gauge needle, forming a solid implant in the body that slowly releases leuprolide as the implant is bioabsorbed.
About QLT
QLT Inc. is a global biopharmaceutical company dedicated to the discovery, development and commercialization of innovative ocular therapies. We utilize two unique technology platforms, photodynamic therapy (used with the Visudyne® product) and punctal plugs which are currently under development for future product opportunities. For more information, visit our website at www.qltinc.com.
About TOLMAR Holding, Inc.
TOLMAR Holding, Inc. is a private pharmaceutical company. TOLMAR, Inc. is a Colorado-based pharmaceutical research, development, manufacturing and commercial operations company. TOLMAR is responsible for the development and manufacturing of 18 prescription pharmaceutical products dispensed in the U.S. The company's dental division manufactures and distributes dental products designed to treat adult periodontal disease. For more information about the company, visit www.tolmar.com.