Welichem Announces Termination of Asset Purchase Agreement and Update on Compulsory Acquisition
BURNABY, BC, July 22, 2014 /CNW/ – Welichem Biotech Inc. (the “Company”)
(TSX-V: WBI) announces that it has entered into a termination agreement
with Shenzhen Celestial Pharmaceuticals Ltd. (“Celestial”) and Beijing
Wenfeng Tianji Pharmaceuticals Co., Ltd. (“BWTP”) to terminate the
asset purchase agreement dated March 26, 2013 (the “China APA”) among
the parties, pursuant to which the Company agreed to purchase the
exclusive development and commercialization rights (the “Rights”) to
the novel anti-inflammatory agent, WBI-1001, in China, Taiwan, Macao
and Hong Kong.
Welichem, Celestial and BWTP have been trying to negotiate with the
relevant Chinese authorities since 2012 to obtain approval of the China
APA as required for the transfer the Rights, however, negotiations have
been unsuccessful in this regard. The Board of Directors of the
Company determined that it would be in the best interests of the
Company to terminate the China APA in light of the fact that it is
unlikely that the China APA could ever be implemented.
The Termination Agreement provides that Celestial and BWTP will return
the $10 million payment made by Welichem pursuant to the China APA,
less an amount representing costs of the parties in seeking regulatory
approval of the China APA plus the amount of any taxes required to be
Compulsory Acquisition Update
On July 21, 2014, LJ Resources Co., Ltd. (“LJ”) announced that it
intends to exercise its rights under the compulsory acquisition
provisions in Section 300 of the Business Corporations Act (British Columbia) to acquire all of the outstanding common shares of
Welichem (the “Shares”) that it does not currently own and that it has
now sent a notice of compulsory acquisition to all remaining holders of
Shares in connection therewith. LJ also announced that it intends to
take the necessary steps to have Welichem cease to be a reporting
issuer under applicable Canadian securities laws following completion
of the compulsory acquisition.
About Welichem Biotech Inc.
Welichem Biotech Inc. is a publicly-traded biotechnology company
developing therapeutic drugs in the fields of autoimmune diseases and
cancer. For a more complete business and financial profile of the
Company, interested parties are encouraged to visit the Company’s
CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS
All statements included in this press release that address activities,
events or developments that the Company expects, believes or
anticipates will or may occur in the future are forward-looking
statements. In particular, this document contains forward-looking
information and statements regarding the completion of the compulsory
These forward-looking statements involve numerous assumptions made by
the Company based on its experience, perception of historical trends,
current conditions, expected future developments and other factors it
believes are appropriate in the circumstances. In addition, these
statements involve substantial known and unknown risks and
uncertainties that contribute to the possibility that the predictions,
forecasts, projections and other forward-looking statements will prove
inaccurate, certain of which are beyond the Company’s control,
including further actions or announcements of the offeror, changes in
laws and regulations, stock market volatility and obtaining required
approvals of regulatory authorities. Readers should not place undue
reliance on forward-looking statements.
There can be no assurance that forward-looking statements or information
will prove to be accurate, as actual results and future events could
differ materially from those anticipated in such statements.
Accordingly, you should not place undue reliance on the forward-looking
statements or information contained herein. Except as required by law,
we do not expect to update forward-looking statements and information.
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
SOURCE Welichem Biotech Inc.