- Release Date: 05/09/13 11:30
- Summary: PLACE: CVT: Comvita Announces Strategic Investment by Derma Sciences
- Price Sensitive: No
- Download Document 6.05KB
CVT 05/09/2013 09:30 PLACE REL: 0930 HRS Comvita Limited PLACE: CVT: Comvita Announces Strategic Investment by Derma Sciences Comvita has announced its global licensee for Medihoney specialist wound care products, Derma Sciences Inc., has taken an approximately $9.0million (USD$7.0million) strategic shareholding in Comvita Limited, with the purchase of approximately 2.3million, newly issued common shares at a price of $3.90 per share*. Comvita Chairman, Neil Craig said in conjunction with this investment, which represents approximately 7.3% of Comvita's outstanding shares, Derma Sciences' Chairman and Chief Executive Officer Edward J. Quilty, has joined Comvita's Board of Directors. Mr Quilty said, "With the rapid growth of our Medihoney products, Manuka honey now is our single largest raw material purchase and an anchor product in our Advanced Wound Care (AWC) segment, with sales growth of approximately 50% in the second calendar quarter 2013. Our expectations are for continued rapid growth for the foreseeable future in both professional wound care and over-the-counter channels." Mr Craig said the proceeds of this share placement will be used to support the company's apiary acquisition and harvest modernisation strategy, to ensure sufficient supply of medical-grade Manuka honey to meet the strongly growing demand for the Medihoney wound care product line. "This strategic investment by Derma Sciences cements the relationship between our companies in a very meaningful way and ensures an alignment of our shared, longer-term interests in further developing Comvita's Manuka honey business," said Mr Craig. Comvita CEO, Brett Hewlett said, "The acquisition of strategically located apiary businesses has been important to Comvita in providing supply surety and meeting the growing global demand for Manuka honey. Comvita currently owns apiaries that provide approximately 30% of our total honey needs. We are now in a position to accelerate our apiary growth programme and meet our strategic objective of owning up to 50% of our honey supply needs. The balance of supply will come from long term contractual supply and partnership relationships." In February 2010 Derma Sciences licensed exclusive worldwide rights from Comvita for the Medihoney professional wound and skin care products. Current Medihoney products include Medihoney Calcium Alginate Dressing, Medihoney Paste, Medihoney Gel, Medihoney HCS and Medihoney Honeycolloid(TM). In addition, Derma Sciences makes over-the-counter private-label, honey-based dressings for a leading U.S. pharmacy chain. Comvita has an equity stake (and warrants) in Derma Sciences (NASDAQ: DSCI), which is now valued by the market at approximately NZ$17.5 million. Under the licensing agreement with Derma Sciences, Comvita receives ongoing monthly royalty payments, revenue from the sale of bulk medical grade honey and ongoing milestone payments on achievement of agreed sales targets. The license agreement also provides for Comvita to sell Derma Sciences manufactured Medihoney products to the Over-the-Counter (OTC) and pharmacy markets worldwide. Comvita CEO Brett Hewlett is a member of the Derma Sciences Board of Directors. The global licencing rights agreement has proven to be outstandingly rewarding for both Comvita and Derma Sciences: o From a standing start in 2006, Derma Sciences Medihoney sales are now at a 'run rate' of US$15million pa. o Comvita now receives a royalty stream of approximately $400,000 per quarter and has received its second capital milestone payment of US$1million in 2012-2013 based on Medihoney sales reaching agreed sales targets. o Sales by Derma Sciences are continuing to grow at approximately 50% pa. # Ends # For further information: Comvita CEO, Brett Hewlett, 021 740 160 Comvita Chairman, Neil Craig, 021 731 509 Comvita Communications Manager, Julie Chadwick, 021 510 693 * In terms of the Subscription Agreement between Comvita and Derma Sciences, should Comvita issue further shares to any third party investor by way of a private placement within 6 months from now at a price of 10% or more below $3.90 per share, the benefit of such lower issuance price must be extended to Derma Sciences by issue of additional shares to Derma Sciences at no further cost. There is currently no intention to issue additional shares to any third party. Background information About Comvita (www.comvita.co.nz) Comvita is an international natural health and beauty company committed to the development of innovative products, backed by credible scientific research. We are the global leader in Manuka (leptospermum) honey and fresh-picked Olive Leaf Extract, which are at the core of the Comvita product range. We have approximately 30% of honey supply under our ownership with the balance of supply from long term contractual and partnership arrangements. Comvita's Olive Leaf Extract is grown, harvested, extracted and bottled at the world's largest specialised olive leaf grove, with over 580,000 olive trees. Comvita sells into more than 18 countries through a network of wholesale and third-party outlets and online. We have offices in New Zealand, Australia, Hong Kong, Japan, Taiwan, South Korea and the United Kingdom. About Derma Sciences (www.dermasciences.com) Derma Sciences is a medical technology company focused on three segments of the wound care marketplace: pharmaceutical wound care products; advanced wound care dressings to address chronic wounds including diabetic ulcers; and traditional dressings. The Company has begun its Phase 3 clinical trials in diabetic foot ulcer healing with DSC127, based on excellent Phase 2 data. Its MEDIHONEY product is the leading brand of honey-based dressings for the management of wounds and burns. The product has been shown in clinical studies to be effective in a variety of indications. TCC-EZ is its gold-standard total contact casting system for diabetic foot ulcers. Other novel products introduced into the $14 billion global wound care market include XTRASORB for better management of wound exudate and BIOGUARD for infection prevention. End CA:00240725 For:CVT Type:PLACE Time:2013-09-05 09:30:34
- Forums
- NZX - By Stock
- CVT
- Ann: PLACE: CVT: Comvita Announces Strategic Inve
Ann: PLACE: CVT: Comvita Announces Strategic Inve
Featured News
Add CVT (NZSX) to my watchlist
The Watchlist
CCO
THE CALMER CO INTERNATIONAL LIMITED
Anthony Noble, MD & CEO
Anthony Noble
MD & CEO
Previous Video
Next Video
SPONSORED BY The Market Online