Secures 10-year Supply Source
PRINCETON, N.J.--(BUSINESS WIRE)--Jan. 11, 2017--
Derma Sciences, Inc. (Nasdaq:DSCI), a tissue regeneration company
focused on advanced wound and burn care, today announced that it has
purchased the MEDIHONEY® brand and related intellectual property and
goodwill from its long-term partner, New Zealand-based Comvita Limited.
Consideration is an upfront payment of $13.25 million in cash, with an
additional $5.0 million potentially payable in the form of an earn-out
upon achievement of future annual sales milestones. Prior to the
acquisition, Derma Sciences held the exclusive global license for the
Comvita-owned MEDIHONEY brand and patents for the medical and
professional market segments. The purchase eliminates Derma Sciences’
obligation of royalty payments to Comvita on the sale of MEDIHONEY
products, which royalties amounted to $1.6 million in 2016.
Additional agreements entered into at the time of the acquisition
include an exclusive medical honey supply agreement from Comvita to
Derma Sciences for 10 years with fixed pricing terms for two years, a
worldwide licensing agreement from Derma Sciences to Comvita to use the
purchased intellectual property in the over-the-counter (OTC) market,
and the continued manufacture of honey-based products by Derma Sciences
for Comvita for OTC consumer product sales.
“Under Derma’s leadership, the MEDIHONEY brand has grown to be the
largest line of medical-grade honey products for advanced wound care use
in the world, totaling global sales of approximately $20.0 million in
2016,” said Stephen T. Wills, Executive Chairman of Derma Sciences.
“What is important to Derma Sciences and to the healthcare professionals
and patients who benefit from these important products, is security of
supply. Under the terms of the deal, we have a new 10-year medical honey
supply agreement with Comvita, which gives Derma Sciences cost certainty
for the first two years and priority of medical honey supply with
respect to its needs. Comvita has supplied us for more than a decade,
and having the backing of Comvita, its supply chain, and related
partnerships gives us the confidence to continue to invest in the growth
of our MEDIHONEY business.”
About Derma Sciences, Inc.
Derma Sciences is a tissue regeneration company focused on advanced
wound and burn care. It is engaged in the development and
commercialization of novel proprietary regenerative products derived
from placental/birth tissues for use in a broad range of clinical
applications including the treatment of complex chronic wounds, acute
wounds and localized areas of injury or inflammation, in addition to
filling soft tissue defects or voids. The Company also markets TCC-EZ®,
a gold-standard total contact casting system for diabetic foot ulcers.
Derma Sciences’ MEDIHONEY® product line 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. Other novel products introduced into the $14 billion
global wound care market include XTRASORB® for better
management of wound exudate, and BIOGUARD® for barrier
protection against microbes and other contaminants. The Company also
offers a full product line of traditional dressings. For more
information, please visit www.dermasciences.com.
Statements contained in this news release that are not statements of
historical fact may be deemed to be forward-looking statements. Without
limiting the generality of the foregoing, words such as "may," "will,"
"expect," "believe," "anticipate," "intend," "could," "estimate" or
"continue" are intended to identify forward-looking statements. Readers
are cautioned that certain important factors may affect the Company's
actual results and could cause such results to differ materially from
any forward-looking statements that may be made in this news release or
that are otherwise made by or on behalf of the Company. Factors that may
affect the Company's results include, but are not limited to product
demand, market acceptance, impact of competitive products and prices,
product development, completion of an acquisition, the success or
failure of negotiations and trade, legal, social and economic risks.
Additional factors that could cause or contribute to differences between
the Company's actual results and forward-looking statements include but
are not limited to, those discussed in the Company's filings with the
U.S. Securities and Exchange Commission.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170111006112/en/
Source: Derma Sciences, Inc.
Derma Sciences, Inc.
Chief Financial Officer
Sutton Golodetz, 212-838-3777