Dimethaid Research Inc announced that, pursuant to its May 15th purchase agreement with Swiss-based OXO Chemie AG, the company has elected to pay the November 30th installment of $4.5 million US using a combination of cash and shares. The payment to OXO founder, Dr. Friedrich-Wilhelm Kuhne, will consist of $500,000 US ($783,000 Cdn) cash and $4 million US ($6.3 million Cdn) in common stock totaling 3,239,092 shares. Under the agreement, these shares will be held in escrow for a minimum of one year.
OXO Chemie AG develops and commercializes proprietary products for treating disease caused by dysfunction of the immune system. Its lead product - code-named WF10 - is currently in phase III clinical trials and results to date suggest improved immune function in late-stage AIDS patients.
"Our continued commitment to OXO Chemie goes directly to our core business strategy of acquiring new drug technologies that can be adapted to treating many different diseases," said Rebecca Keeler, President and CEO, Dimethaid Research Inc. "This strategy is fundamental to our goal of providing better drugs with fewer side effects. We are creating a strong product pipeline while reducing the expense and risk of developing new products."
The payment to OXO Chemie was financed through a private placement agreement with Caledonia Corporate Management Group Limited for 769,230 common shares at $1.30 per share, raising aggregate proceeds of $1.0 million ($638,570 US). As a result of this transactions, Dimethaid Research Inc has 52,497,776 shares outstanding. The company is currently discussing other public and private financing options with a number of interested parties, and anticipates securing additional financing in the near term.
"Proceeds from this financing will enable Dimethaid to implement our corporate objectives, including the commercialization of our lead drug Pennsaid," said Keeler. "Based on our clinical research, we remain confident that we will receive regulatory approvals in Canada and the US."
Dimethaid's product Pennsaid is a topical solution that uses the company's proprietary carrier in combination with diclofenac sodium, a proven nonsteroidal anti-inflammatory drug (NSAID). This medication has been developed to provide localized treatment for the symptoms associated with osteoarthritis, such as pain, stiffness and impaired physical function. Pennsaid has gained marketing approval in the UK, Austria, Italy, Finland, Luxembourg, and some Caribbean countries. Pennsaid is currently under regulatory review in Canada and the United States.