Bioniche’s Pharmaceutical Business Unit Raises 10.8 Million Euro for Expansion of Manufacturing Facilities
BELLEVILLE ON, May 21, 2004 – Bioniche Life Sciences Inc. (TSX:BNC), a fully-integrated human and animal health biopharmaceutical company, announced today that its Irish pharmaceuticals business unit, Bioniche Pharma Group Limited, has signed a loan agreement with the Governor and Company of the Bank of Ireland making available two facilities totalling up to 8.2 million Euro. Bioniche Pharma will use these funds to expand its manufacturing facilities in Galway, Ireland.
“Bioniche Pharma has seen its revenue line grow from $5 million (Cdn.) in 2000 to approximately $27 million (Cdn.) last year,” said Albert Beraldo, President & CEO, Bioniche Pharma Group. “This expansion is necessary to address the anticipated continuation of this growth trend in our product line and revenues.”
The loans are secured, and bear interest at the European overnight interbank rate (Euribor) plus 1.825% per annum for the first facility of 5.6 million Euros, and at Euribor plus 1.75% per annum for the second facility of 2.6 million Euros. The loans are repayable, commencing 15 months after the first funds are advanced, in quarterly instalments over nine years for the first facility and five years for the second facility.
The Bank has also made available two additional facilities of up to 2.5 million Euro, to be used for currency hedging and interest rate swaps in connection with this loan.
In connection with its proposed expansion, Bioniche has concurrently negotiated a grant aid package from Údarás na Gaeltachta, an Irish development corporation, totalling 1.9 million Euro. In addition to the grant aid provided, Údarás has added to its existing equity investment in Bioniche Teoranta, Bioniche Pharma’s operating subsidiary, by purchasing 700,000 Euro of preference shares in the operating company. The preference shares are redeemable over a five-year period commencing on the fifth anniversary of subscription, and bear interest on a cumulative basis at the rate of 5%.
“We are pleased with the Bank of Ireland’s confidence in our business plan and also wish to acknowledge the significant contribution of Údarás na Gaeltachta to our ongoing business initiatives,” added Mr. Beraldo.
Bioniche Pharma Group is a specialty pharmaceutical company involved in the development, manufacturing, and marketing of sterile injectable products and other pharmaceuticals for human health. Its sterile injectable products are primarily sold in the United States directly or through strategic alliances with other pharmaceutical companies. It holds the rights to Bioniche’s proprietary product – Suplasyn®, which has become a market leader in Europe. Suplasyn® is a sterile, sodium hyaluronate solution injected into synovial joints such as the knee to replace or augment synovial fluid, the naturally occurring lubricant in the joint. Suplasyn® reduces joint pain and increases mobility.
In the past fiscal year, Bioniche Pharma has received approval for six Abbreviated New Drug Applications for sterile injectable preparations, which it has either commenced marketing or is in the process of launching in the U.S. market.
“This expansion is a significant event for Bioniche Pharma Group,” noted Graeme McRae, President & CEO of Bioniche Life Sciences Inc. “It will significantly increase manufacturing capacity and will provide upgraded equipment that will improve efficiency considerably.” Construction on the Bioniche Pharma facility has begun, and is expected to be completed by the middle of 2005.