$10 million for Procyon - La Financiere du Quebec Makes Its First Biolevier Loan
12/13/02
MONTREAL, Dec 13, 2002 (CNW Telbec via COMTEX) --
The Deputy Premier and Minister of Finance, the Economy and Research, Pauline Marois, as well as the President and CEO of Procyon Biopharma (TSX: PBP), Hans Mader, have announced major financing for the biotechnology company that specializes in the development of innovative technologies for cancer treatment and diagnosis. Investissement Quebec, through the Biolevier program of its subsidiary La Financiere du Quebec, has made a loan of $10 million to Procyon.
This is the first capital support loan made since the Biolevier program was created. This program is designed to improve access to financing for growing corporations in the biotechnology sector.
"Procyon's projects help develop unique expertise in the biotechnology sector, as well as contributing to the well-being of cancer patients. By associating ourselves with such initiatives through Biolevier, we are providing concrete support for the development of the biotechnology industry, a vector of Quebec's economic prosperity," Ms. Marois noted.
Hans Mader, President and CEO of Procyon, emphasized the importance of this contribution: "The Biolevier loan offers flexible conditions, adapted to the needs and repayment capacity of biotechnology companies. This financial support provides Procyon Biopharma with powerful leverage. The loan will be disbursed to us according to our needs. It substantially reduces our business risk and provides valuable support for the development of our products and technology platforms, as well as the future acquisition of complementary technology."
Procyon has benefited from one of the terms of Biolevier. The program stipulates that Investissement Quebec may provide a loan for an amount equal to the investment made in a company when at least 20% of such funds are sourced from outside Quebec. Last May, Procyon received $10-million as an investment through a financing, thus meeting the terms of the program.
As far as the other terms of the agreement are concerned, Procyon will be able to defer principal repayment and capitalize interest on the loan for a maximum of three years from the first disbursement. In addition, the principal will be repaid annually, on the basis of 25% of funds generated by operations. Should Procyon not generate funds internally, it may defer repayment of the principal up to 10 years following the first disbursement. The interest rate will be based on the prime rate plus 3%. This variable rate may be converted to a fixed rate at the request of the corporation.
In exchange, Procyon will grant Investissement Quebec security on its assets and will issue 1 503 759 warrants to Investissement Quebec that can be used to purchase common shares of Procyon at a price of $0.56 each. In addition, Investissement Quebec may exercise these warrants during a period of from five to ten years, depending on the eventual length of the loan. Should Procyon not draw down the entire amount of the loan, a portion of these warrants could be cancelled.
Procyon Biopharma Inc. develops innovative products, from the laboratory development stage to clinical trials, with a view to licensing out to partners in the pharmaceutical sector. Procyon currently has two technology platforms for cancer diagnosis and treatment: antinuclear autoantibodies (ANAs) that can selectively treat many types of cancers, and prostate secretory protein (PSP94) that can be used in the diagnosis and treatment of prostate cancer. Two other products in the final stage of development - COLOPATH(R), a colorectal cancer screening test, for which a licence has been granted to IMI; and FIBROSTAT(R), a topical cream for the treatment of scars from surgery and burns and for which Biovail Corporation has a licence for North America - complete the current line of technologies. Procyon's shares trade on the TSX, symbol PBP.
This release contains forward-looking statements that reflect the company's current expectation regarding future events. These forward-looking statements involve risks and uncertainties. Actual events could differ materially from those projected herein and depend on a number of factors including, but not limited to, changing market conditions, successful and timely completion of clinical studies, uncertainties related to the regulatory approval process, establishment of corporate alliances and other risks detailed from time to time in the company's filings. This loan is subject to relevant regulatory and self-regulatory approvals and to various other usual conditions. |
