August 26, 2002
Forbes Medi-Tech, Pan Pharmaceuticals Sign International SupplyAgreement
VANCOUVER, British Columbia--Forbes Medi-Tech Inc.announced an international supply agreement with Sydney-based PanPharmaceuticals Ltd. for Reducol, a cholesterol-lowering phytosterol-basedingredient, to be used in dietary supplements. The initial supply agreement isfor a minimum of three years and secures Pan Pharmaceuticals' exclusive rightsto supply Reducol as a dietary supplement to the Australian market, as well asto selected countries in Asia, the Middle East, Africa and Europe."We will be supplying base product--base materials--to PanPharma, and they will be acting in most cases as a distributor of sorts in theseforeign entities," said Darren Seed, manager of investor relations atForbes Medi-Tech. "They will also maintain the marketing rights to Reducolin those foreign entities."Forbes, which developed and manufactured Reducol (originallycalled Phytrol), initially licensed the ingredient to Novartis in 1999.However, on June 18, Forbes regained the licensing and distribution rights toReducol, after having sent a notice of termination of the master licenseagreement in February. Forbes is currently making royalty payments to Novartis,which will continue for approximately the next 18 months, according to Seed."By that, we gain full access to all revenue, contracts and new clientsdirectly," he said. "Therefore, we do not have to involve Novartis inany new contract negotiations."As Novartis had previously been responsible for internationaldistribution, Pan Pharmaceuticals was a good match for Forbes due to itsinternational ties. "One downside to settling the Novartis agreement isthat Novartis was maintaining most of our global regulatory authorities in thoseforeign counties in which Novartis had a presence," Seed said. "Withthe settlement agreement, Novartis then was no longer responsible for obtainingregulatory approval for Reducol in foreign countries. Now, Pan Pharma has sortof picked up that ball, if you will."Reducol is currently approved for sale in Australia, accordingto Seed, and additional international regulatory approvals are expected in thenear future. "I can see a lot of very steady, consistent growth both on thedietary supplement and the food ingredient side," Seed said. "Thisspecific agreement was more relative to the dietary supplement market. As forForbes in general, I'd like to say I can see some very consistent growth overthe next few months. That's a big push for us right now."
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