NEWS ON PPRT
PharmaPrint and Subsidiary of China New Industries Form $12 Million JointVenture Targeting China's US$20 Billion Market
The Parties Reach Binding Legal Agreement Subject to Final Approval Of
Respective Boards
IRVINE, Calif., Feb. 2 /PRNewswire/ -- PharmaPrint Inc. (Nasdaq: PPRT), a leader in the development of health products from natural plant extracts, announced today the successful completion of a binding legal agreement with ShenZhen ZeGu Venture Capital Co., Ltd., a wholly owned subsidiary of China New Industries Investment Co., Ltd. The companies will form a joint business entity that will sell a wide range of herbal-based health products in China and the Asia Pacific region utilizing the proprietary PharmaPrint(TM) Process.
Under the terms of the agreement, PharmaPrint owns 51% of the new entity, principally by contributing exclusive rights to its proprietary technology. China New Industries will contribute $6 million in cash and receive in return 49% of the joint venture equity shares. China New Industries' initial contribution is $1.5 million in cash; the remaining capital contributions will be provided in installments over a two-year period in accordance with relevant laws. PharmaPrint will pay a nominal administrative fee at the time of distribution. PharmaPrint will transfer use rights to its technology with respect to manufacturing, testing and quality control of herbal-based health products; provide necessary technical assistance and services; and grant an exclusive license for the use of the PharmaPrint patents, trade secrets and trademarks in China and the Asia Pacific regions, while retaining title to these technologies.
The initial stage of the of the joint venture will focus on promotion and marketing of PharmaPrint's herbal-based health products produced from raw materials and/or semi-finished products. Once the initial stage is completed, the focus of the joint venture entity may also include certain phases of the production process.
This agreement is subject to approval by both parties' governing boards. The Company anticipates that a formal joint venture contract and articles of association will be completed within the first quarter of 2000.
"We're obviously very pleased to form this strategic alliance with China New Industries," said C. Richard Piazza, PharmaPrint's Chairman of the Board, President and Chief Executive Officer. "This joint venture entity provides a gateway into the China and the Asia Pacific region and a tremendous opportunity to distribute PharmaPrint's current line of herbal health products, products under development and future products. This new distribution channel is part of the Company's overall marketing strategy of developing multiple revenue streams for the PharmaPrint(TM) Process worldwide," concluded Mr. Piazza. The Company recently announced two notices of allowance for patent applications for saw palmetto and St. John's wort.
The Chinese people have been using herbs for several thousand years. "China's 1.3 billion people represent an enormous market potential for herbal products and nutritional foods in this region," said Xian Ding Weng, President of China New Industries Investment Co., Ltd. "Approximately US$20 billion is spent each year. We believe products utilizing the unique PharmaPrint(TM) Process technology will provide Asian consumers with the assurance that they are getting quality herbal and nutritional food products, in a capsule form that is more convenient than the traditional Chinese blending of raw herbs. We look forward to introducing the PharmaPrint products to the Asian consumers as soon as the appropriate documentation is completed and approvals are obtained."
About China New Industries Investment Co., Ltd.
China New Industries Investment Co., Ltd. is a major Chinese conglomerate with leadership positions in many areas. The Company specializes in investing in businesses that have unique technologies that have demonstrated highly promising market potentials. The Company was recognized by Business Week as one of the leading companies in China in terms of its innovative investment practices and impressive returns on assets.
About PharmaPrint
PharmaPrint develops, manufactures and markets dietary supplements, functional foods and pharmaceuticals derived from natural plant extracts. The Company's proprietary PharmaPrint(TM) Process technology enables the precise identification and consistent replication of the active ingredients from these extracts that are scientifically believed to provide the desired health benefits.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:
This press release includes forward looking statements that involve a high degree of financial, technological, regulatory and competitive risks and uncertainties inherent to early stage nutraceutical companies. These forward looking statements include, but are not limited to, the ability to execute a legal agreement between PharmaPrint and China New Industries and obtain respective board approval; the outcome of litigation with American Home Products Corporation; the cost and availability of botanical extracts; the cost and availability of manufacturing service contracts; the ability to obtain and enforce patents; limited manufacturing experience; dependence on third parties; uncertainties related to the PharmaPrint(TM) Process; government regulation and uncertainty of product approvals; ability to commercialize and market products in the U.S. and internationally; results of research and development and clinical and toxicology studies; technological advances by third parties; competition; future capital needs of the Company and general economic and business conditions; uncertainties relating to Nasdaq rules, regulations and procedures and their interpretation in the future; and uncertainties regarding the Company's continued compliance with all requirements to maintain listing of its common stock on the Nasdaq National Market. Additional information on potential factors that could affect the Company's financial results are included in the Company's Registration Statement on Form S-8 dated July 6, 1999, and on Form 10-Q for the periods ended September 30, 1999, and on Form 10-K for the year ended March 31, 1999.
For more information, contact the Company's Website at www.pharmaprint.com.
SOURCE PharmaPrint Inc.
CO: PharmaPrint Inc.; China New Industries Investment Co., Ltd.; ShenZhen ZeGu Venture Capital Co., Ltd.
ST: California, China
IN: MTC
SU: JVN
02/02/2000 09:01 EST prnewswire.com |
