Paladin in strategic relationship with Dutch specialty pharma

Stepping beyond its Canadian market, Paladin Labs (TSX:PLB) is investing four million Euros through a secured convertible debenture in SpePharm Holding BV, a Dutch specialty pharma company, in a new relationship that “establishes significant future strategic collaboration and value potential for both parties.”

Under the accord, Paladin can convert the debenture into an approximate 10% equity stake in SpePharm, which focuses on acquiring, registering and marketing high medical value specialty medicines essentially for the hospital market in Europe.  It also obtained a “right of first discussion” for all future debt funding by SpePharm during the term of the secured convertible debenture.

As a first step, to further Paladin’s strategy of “expanding its geographic footprint and portfolio of products,” it will be granted an exclusive license to market Savene in South Africa and Israel.  Savene is the only approved treatment for anthracycline extravastion, and has EMEA approval.

As a second step, SpePharm and Paladin granted each other reciprocal rights in their respective marketing regions that flow from any future product acquisitions or licensing transactions.  Paladin will also place a representative on SpePharm’s supervisory board.

“International growth will be a core component of Paladin’s future business and we view this investment as a strategic, yet risk mitigated way, to expand our international reach,” CEO Jonathan Goodman said in a statement.

Like Paladin, SpePharm’s business plan involves in-licensing and acquiring innovative pharmaceuticals.  “By investing in SpePharm, we will be able to further accelerate our existing business development search and acquisition activities via exposure to all the transactions that SpePharm is looking at,” Mr. Goodman said, adding that the Paladin will also be able to offer potential licensors a “proven marketing partner for Europe.”