This sale concludes the planned disposals and cost reduction program announced at the time of the acquisition of UK biopharmaceutical company KS Biomedix, which occurred in 2003, said Xenova CEO David Oxlade.
The consideration comprises an initial payment of C$5 million in cash payable upon completion, and a further deferred consideration of C$2 million payable 12 and 18 months following completion. The proceeds from this disposal will be used to fund expenditure relating to Xenova's in-house drug development programmes programs. Net assets disposed as part of the transaction amount to C$6.6 million.
In addition to the sale of the facility, terms have also been agreed for a manufacturing and supply contract with QSV for TransMID (KSB311), which is presently under development in Phase III clinical trials. The annualised reduction in net operating expenses as a result of the disposal, ignoring the impact of the manufacturing contract, will be approximately £1.8 million ($2.6m).
QSV Biologics provides mammalian cell culture and microbial fermentation related biopharmaceutical contract manufacturing services for preclinical research, Phase I, II and III clinical trials materials as well as commercial materials.