Leading Canadian specialty pharmaceutical company, Paladin Labs Inc. has has entered into a licensing and distribution agreement with Australian-based biopharmaceutical company, Immuron Limited.

Under the terms of the agreement, Paladin receives the exclusive rights to market and sell Travelan in Canada, Latin America (including Brazil and Mexico) and Sub-Saharan Africa (including South Africa).

Travelan is a novel, other the counter (OTC) product for the prevention of Travellers' Diarrhoea. According to the US Centers for Disease Control and Prevention, each year between 20% - 50% of international travellers, an estimated 10 million persons, develop diarrhoea. In addition, Paladin also received an option to acquire the same territorial rights to Immuron's influenza product candidate (IMM 255) which is currently under development.

Paladin will pay CAD $500,000 upfront and provide a series of potential sales performance milestone payments that can total up to CAD $115 million. In addition, Immuron and Paladin have also entered into a funding agreement, subject to certain closing conditions, under which Paladin will provide up to CAD $1.5 million at a rate of interest of 10% to Immuron for the ongoing global commercialization of Travelan and future product development in the form of a secured convertible debenture. Further financial details related to the agreement were not disclosed.

"This transaction continues to demonstrate Paladin's appetite and capability to build both its OTC and international business," said Mark Beaudet, Interim President and CEO of Paladin. "Travelan is unique in that it will be the only OTC product indicated for the prevention of traveller's diarrhoea, the most common illness that affects travellers. Travelan will complement our Kaopectate brand in Canada and will add further critical mass to our OTC portfolio that includes well known consumer brands like Plan B, Tempra, Anbesol and Zincofax. In Latin America and Sub-Saharan Africa, Travelan will become another important piece of our future growth and expansion in markets that are becoming increasingly important for our business and future strategy."

"We are very excited to partner with Paladin in Canada, Latin America and Sub-Saharan Africa," said Joe Baini, CEO of Immuron. "This is a major event for Immuron and we have confidence in the market potential of Travelan in these geographies given the continued strong sales in Australia by our local partner Nycomed. We have confidence in Paladin's track record and abilities to maximize the commercial potential of Travelan".

Travelan is a natural product which is specifically designed to reduce the risk of infection by ETEC, the most common cause of Travellers' Diarrhea. In clinical trials, Travelan showed protection of up to 90% efficacy against infection with the type of E.coli that causes Travellers' Diarrhoea. In addition, trials showed a significant reduction in abdominal cramps and stomach pain compared to those who did not receive Travelan. There were no reported side effects in the clinical trials.