Dimethaid reports arbitration ruling
TORONTO, Dec. 16 /CNW/ - Dimethaid International Inc., a wholly owned
subsidiary of pharmaceutical developer Dimethaid Research Inc. (TSX: DMX), has
been notified that arbitration initiated against the company by Provalis
Healthcare Limited has been decided. Under the decision, Dimethaid will pay
Provalis the compensatory sum of approximately $2.1 million US, together with
costs and interest of approximately $632,000 US. A counterclaim by Dimethaid
against Provalis was denied. The arbitrator's decision is final and binding.
"Naturally, we are disappointed with the decision and believe it does not
appropriately reflect the business commitments made," said Rebecca Keeler,
president and CEO of Dimethaid Research Inc. "But the matter is now concluded
and we look forward to moving ahead with our new UK sales and marketing
strategy."
In June 2002, the company terminated an agreement that gave Provalis
exclusive Pennsaid(R) distribution rights in the United Kingdom. Provalis
initiated arbitration proceedings in December 2002, challenging Dimethaid's
right to terminate. The arbitrator found that although Provalis had provided
long-term sales projections well below the contract minimums and, at
termination, had placed orders for only one-third of the first year's
commitment, those facts were not sufficient to establish that Provalis had
repudiated the contract.
Dimethaid has since signed a sales development services agreement with a
UK contract organization to recover marketing momentum lost after the initial
product launch. Response from physicians to the relaunch of Pennsaid in the UK
has been extremely encouraging.
About Dimethaid Research Inc.
Dimethaid Research Inc. is a publicly traded, Canadian, pharmaceutical
company headquartered in Markham, Ontario, with manufacturing facilities in
Varennes, Québec and Wanzleben, Germany. The company develops and
commercializes targeted therapeutic drugs designed to produce minimal side
effects. Dimethaid's two technology platforms focus on immune system
regulation and transcellular drug delivery. Products are aimed at expanding
treatment options in oncology, immunology, rheumatology and the therapeutic
management of chronic viral infections. For more information, please visit
www.dimethaid.com.
This release may contain forward-looking statements, subject to risks and
uncertainties beyond management's control. Actual results could differ
materially from those expressed here. Risk factors are discussed in the
Company's annual information form filed with the securities commissions in
each of the provinces of Canada. The Company undertakes no obligation to
revise forward-looking statements in light of future events.
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