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Paladin's wholly owned subsidiary, Squire Pharmaceuticals Inc., has made a$2,500,000 payment to Nuvo in lieu of future payments relating to Canadiansales of Pennsaid accruing prior to January 1, 2011. In addition, Squire willpay Nuvo a royalty on future Canadian sales of Pennsaid occurring afterJanuary 1, 2011.
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Squire has also invested $2,000,000 in Nuvo by way of a two-yearconvertible debenture. The new debenture bears interest at 8% per annum and isconvertible into Nuvo common shares at a price of $0.1380. The conversionprice is based on Nuvo's volume weighted average trading price on the TSX forthe five-day trading period ending July 4, 2008.
The existing Canadian Pennsaid Plus license between Nuvo and Squire hasbeen amended to grant Squire the right to market, distribute and sell PennsaidPlus in South Africa and Israel and, if certain conditions are met, Centraland South America. Nuvo will receive royalties in respect of any sales ofPennsaid Plus by Squire in these additional territories. Pennsaid Plus is animproved gel version of Pennsaid that requires less frequent dosing. Patentapplications are pending. Pennsaid Plus has not yet been approved by HealthCanada or the U.S. Food and Drug Administration (FDA).
"These amended arrangements provide us with additional cash that extendsour financial runway beyond mid 2009 when we expect to receive FDA approval ofPennsaid," said John London, Nuvo's Vice Chairman. "We continue to completethe non-clinical studies to respond to the FDA's December, 2006 ApprovableLetter, and have started to prepare our Pennsaid resubmission, which we expectto file with the FDA in early 2009. This would lead to an expected responsefrom the FDA in the third quarter of 2009. The funds will also allow us tocontinue to develop our early stage transdermal pipeline."
"Pennsaid continues to be one of our most important products," saidJonathan Goodman, President and CEO of Paladin. "This transaction is aneffective use of our existing cash and assists Nuvo towards completing itsdevelopment of Pennsaid Plus. Consistent with our strategy of growinginternationally, we have secured the rights to Pennsaid Plus for Israel, SouthAfrica and, under certain conditions, Central and South America."
About Paladin Labs Inc.
Paladin Labs Inc., headquartered in Montreal, Canada, is a leadingspecialty pharmaceutical company focused on developing, acquiring orin-licensing innovative pharmaceutical products for the Canadian market. Withthis strategy, a focused national sales team and proven marketing expertise,Paladin has evolved into one of Canada's leading specialty pharmaceuticalcompanies. Paladin's shares trade on the Toronto Stock Exchange under thesymbol PLB. For more information about Paladin, please visit the Paladin website at www.paladinlabs.com.
About Nuvo Research Inc.
Nuvo is focused on the research and development of drug products deliveredto and through the skin using its topical and transdermal drug deliverytechnologies. Nuvo's lead product is Pennsaid(R), a topical non-steroidalanti-inflammatory (NSAID) used for the treatment of osteoarthritis. Nuvointends to leverage its skin-penetrating technologies to create a portfolio oftopical and transdermal products targeting a variety of indications.
Nuvo Research Inc. is a publicly traded, Canadian pharmaceutical companyheadquartered in Mississauga, Ontario, w
