BARDA EXERCISES OPTIONS WITH CANGENE WORTH US$61 MILLION UNDER BOTULISM ANTITOXIN SUPPLY CONTRACT
WINNIPEG, June 3, 2011 /PRNewswire/ - Cangene Corporation (TSX: CNJ) today announces that the Biomedical Advanced Research and Development Authority ("BARDA"), the agency within the U.S. Department of Health and Human Services that administers its biodefence stockpiling contracts, will exercise options under a botulism antitoxin ("BAT") supply contract, which are expected to generate approximately US$61 million in additional revenue for Cangene over the next three to four years. In addition, the delivery schedule under the existing contract will be extended to 2018 for the approximately 80,000 doses remaining, with a heavier weighting in 2017 and 2018. The options to be exercised increase the total contract revenue value to Cangene from US$362 million to US$423 million. While the extended delivery schedule spreads the revenue associated with this part of the contract over a greater period of time, it ensures a more predictable revenue stream over the upcoming years. Through the end of the second quarter of fiscal 2011, Cangene has already recognized US$200.1 million in revenue from this contract. The additional work included in the US$61 million of options will primarily involve plasma collection in the next three years, along with additional stability studies and licensure-related work. BARDA has also retained a contract option under which some of the collected plasma may be fractionated or used to manufacture bulk product over the period from 2012 to 2016.
"This is an extremely positive step. Not only does this significantly increase the total revenue value of this contract, it also indicates that BARDA is adopting a strategy of extending these types of contracts to replenish supplies of biodefence products. As the supplier for three products in the U.S. Strategic National Stockpile, that's an indication we are happy to see," said Michael Graham, acting President and CEO of Cangene. "It also provides for a consistent addition to our revenue stream for the next seven years."
About Cangene Corporation
Cangene is one of Canada's largest and earliest biopharmaceutical companies. It was founded in 1984 and is headquartered in Winnipeg, Manitoba. Cangene has approximately 700 employees in six locations across North America and its products are sold worldwide. It operates manufacturing facilities in Winnipeg, Manitoba and Baltimore, Maryland. Cangene operates three U.S. and one Canadian plasma-collection facilities branded as Cangene Plasma Resources (www.cangeneplasma.com). In addition, it has a regulatory affairs, sales and corporate communications office in Toronto, Ontario.
Cangene is focused on developing therapeutics for infectious diseases, and the Company uses patented manufacturing processes to produce plasma-derived and recombinant therapeutic proteins. Cangene has four FDA and/or Health Canada-approved hyperimmune products. In addition, the Company has several more products in development at various stages. Three of Cangene's products have been accepted into the U.S. Strategic National Stockpile-botulism antitoxin (investigational product), anthrax immune globulin (investigational product) and a vaccinia immune globulin, a product that may be used to counteract certain complications that may arise from smallpox vaccination. Cangene's wholly-owned subsidiary, Cangene bioPharma, Inc., is based in Baltimore, Maryland and includes its U.S. commercial sales and marketing office as well as a significant contract-manufacturing business (www.cangenebiopharma.com). Cangene's website, www.cangene.com, includes product and investor information, including past news releases.
Forward-looking and risk information
The reader should be aware that Cangene's businesses are subject to risks and uncertainties that cannot be predicted or quantified; consequently, actual results may differ materially from past results and those expressed or implied by any forward-looking statements. Factors that could cause or contribute to such risks or uncertainties include, but are not limited to: the regulatory environment including the difficulty of predicting regulatory outcomes; changes in the value of the Canadian dollar; the Company's reliance on a small number of customers including government organizations; the demand for new products and the impact of competitive products, service and pricing; availability and cost of raw materials, especially the cost, availability and antibody concentration in plasma; fluctuations in operating results; government policies or actions; progress and cost of clinical trials; reliance on key strategic relationships; costs and possible development delays resulting from use of legal, regulatory or legislative strategies by the Company's competitors; uncertainty related to intellectual property protection and potential costs associated with its defence; the Company's exposure to lawsuits; and other matters beyond control of management. Risks and uncertainties are discussed more extensively in the MD&A section of the Company's most recent annual report and annual information form, which are available on the Company's website or on SEDAR at www.sedar.com.
The preceding cautionary statements should be considered in connection with all written or oral statements, especially forward-looking statements, that are made by the Company or by persons acting on its behalf and in conjunction with its periodic filings with Securities Commissions, including those contained in the Company's news releases and most recently filed annual information form. Forward-looking statements can be identified by the use of words such as "expects", "plans", "will", "believes", "estimates", "anticipates", "intends", "may", "bodes" and other words of similar meaning (including negative and grammatical variations). Should known or unknown risks or uncertainties materialize, or should management's assumptions prove inaccurate, actual results could vary materially from those anticipated. The Company undertakes no obligation to publicly make or update any forward-looking statements, except as required by applicable law.