Paladin Labs buys into film technology with BioEnvelop deal

By Pete Mansell

- Last updated on GMT

Related tags Chief executive officer Over-the-counter drug

Paladin Labs has reached an agreement in principle to acquire the
outstanding shares of BioEnvelop Inc, which develops, manufactures
and markets rapidly dissolving edible films for use as delivery
systems in the pharmaceutical and nutraceutical sectors.

BioEnvelop's film-strip technology provides a platform for the development of innovative nutraceutical, over-the-counter and prescription products, said Paladin, which could not be reached for comment.

According to the company's president and chief executive officer Jonathan Ross Goodman, Paladin intends to leverage the BioEnvelop technology to improve the delivery of a number of identified off-patent products.

It also believes there is significant potential to enhance BioEnvelop's performance through focused promotion of its existing film-based product line, which is generating revenues in Canada and the United States.

Paladin has agreed to pay up to around C$1.9m (€1.24m) for BioEnvelop, half in cash and half through the issue of Paladin common shares.

The transaction is subject to a number of conditions, including court approval, but is expected to close no later than 30 April 2007.

Based like Paladin in Quebec province (specifically in Laval, while Paladin's headquarters are in Montreal), BioEnvelop is a wholly owned subsidiary of BioEnvelop Technologies , whose products include edible-film delivery systems for vitamins, hormones, nutraceuticals and over-the-counter drugs, as well as drinkable gels for the natural food and sporting markets, and a range of agri-foods.

BioEnvelop, which was previously known as BioEnvelop Agro, focuses on the development, production and commercialisation of solid and liquid delivery systems.

Both the company and its parent filed for bankruptcy in August 2006.

Their main creditor, Quorum Secured Equity Trust, obtained a court order appointing André Giroux Conseil Inc as interim receiver for the companies' property, with the power to sell the businesses or their assets.

Paladin's strategy to date has been to acquire or license in innovative pharmaceutical products for the Canadian market.

It recently secured marketing approval from Health Canada for a one-step dosing regimen of Plan B (levonorgestrel), the emergency contraceptive or so-called 'morning-after pill' currently sold over the counter as two tablets to be taken within 12 hours of each other.

Among Paladin's other mainstay products are Twinject, a pen-sized auto-injector with two doses of epinephrine for the emergency treatment of severe allergic reactions; and Oxytrol (oxybutynin transdermal system), a clear patch formulation of a treatment for overactive bladder.

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