Toronto (ots/PRNewswire) – The acquisition provides Khiron with a European EU GMP manufacturing and distribution center for medical cannabis and other pharmaceutical products
* With the acquisition of Pharmadrug Production GmbH, Khiron gains direct access to German pharmacies and increases gross margins
for its products
* Upon completion of the transaction, Khiron will continue to sell its current products and expand its portfolio. In doing so, the company expects higher gross margins and a stronger market presence with its own sales force and pharmacy network.
Khiron Life Sciences Corp. (“Khiron” or the “Company”) (TSXV:
KHRN) (OTCQX: KHRNF) (Frankfurt: A2JMZC), a global leader in medical cannabis in Europe and Latin America, announces that it has completed the acquisition of Pharmadrug Production GmbH (“Pharmadrug GmbH” or “Target Company” ) from Pharmadrug Inc. (CSE:PHRX) (OTC: LMLLF) (“Pharmadrug”). The acquisition was previously announced on May 31, 2022 and closed in accordance with its published terms.
With the closing of the transaction, Khiron has expanded its presence in Europe with the addition of an EU GMP-certified manufacturer and wholesaler, as well as a European pharmaceutical manufacturing and distribution center. The acquisition is an optimal fit for Khiron in Europe and is consistent with its economic asset-light strategy. As Khiron Europe’s own wholesaler, the target company will distribute Khiron’s products directly to German pharmacies, enabling Khiron to control the entire value chain in the country and achieve a higher gross margin.
With this acquisition, Khiron is able to accelerate the expansion of its medical product portfolio with additional exclusive flower varieties that are in demand in the market and a THC-dominated full-spectrum extract that combines the medicinal properties and application areas of established THC isolate formulations (dronabinol) with the specific benefits of a full-spectrum extract. Additional new products are already in the pipeline that will span the full spectrum of therapies with medical cannabis to provide the right therapy for each patient, with more details to follow soon.
Franziska Katterbach, President of Khiron Europe, stated, “We are very pleased that we have now received all necessary approvals and licenses in connection with the acquisition and integration of the target company and can continue our growth trajectory in Europe at an accelerated pace with full control over the value chain all the way to the dispensary. We are very excited to leverage the target company’s excellent infrastructure and experienced team, which will enrich us professionally and personally. Following the opening of our ZERENIA clinic in London last year and the addition of a strong foothold in Germany, our European team is now complete and ready to grow our sales in Germany. Now we expect to sell our products directly to German pharmacies faster and with higher margins, which will save distribution fees. A first signal in this direction is the upcoming expansion of our medical portfolio for patients in Europe. These are products manufactured exclusively in Europe, and our medical portfolio now covers the full range of chemotypes and dosage forms. We will provide further information on our new products in a timely manner.”
Under the terms of the acquisition, in consideration for the acquisition of all issued and outstanding shares of the target company, Khiron has issued 5,500.000 shares of the Company’s common stock to Pharmadrug (at a deemed price of $0.16 per share) and an additional 468,750 shares of common stock in connection with certain closing adjustments, for a total of 5,968,750 shares of common stock, and a non-interest bearing promissory note loan, adjusted downward to an aggregate principal amount of $974,137 pursuant to certain closing adjustments. The promissory note is payable one year from the date of issuance in cash or, at Khiron’s option, by issuance of additional Khiron shares. Any issuance of Khiron shares upon conversion of the Promissory Note is subject to the prior approval of the TSX Venture Exchange.
A total of 5,000,000 Khiron Shares issued in connection with the closing are subject to a lock-up agreement pursuant to which Pharmadrug may not transfer such shares without the consent of Khiron. One-fourth of the total number of shares subject to the lock-up agreement will be released at 90-day intervals after each closing date (with all such shares being released 360 days after the closing date).
Information on Khiron Life Sciences Corp. Khiron is a leading vertically integrated international medical cannabis company with core operations in Latin America and Europe. Leveraging medical clinics and proprietary telemedicine platforms, Khiron combines a patient-centric approach, physician education programs, science, product innovation and cannabis operational expertise to drive prescriptions and brand loyalty among patients worldwide. The company has a sales presence in Colombia, Peru, Germany, the United Kingdom and Brazil, and is positioned to launch sales in Mexico. The company is led by Alvaro Torres, co-founder and CEO, along with an experienced and diverse executive team and board of directors.
Visit Khiron online at https://investors.khiron.ca.
Pharmadrug Production GmbH Information Pharmadrug GmbH has been a global manufacturer and wholesaler of pharmaceuticals and active pharmaceutical ingredients for more than 30 years and is licensed to handle narcotics in Germany. Pharmadrug GmbH is EU-GMP (Good Manufacturing Practice) and EU-GDP (Good Distribution Practice) certified and thus fulfills the European guidelines for highest quality standards.
Cautionary Note Regarding Forward-Looking Information This press release may contain “forward-looking information” within the meaning of applicable securities laws. All information contained herein that is not historical in nature constitutes forward-looking information. The forward-looking information contained in this press release may include statements about the expected synergies and benefits to the Company from the acquisition of the target, as well as statements about the expected synergies of the target with the Company’s business and its impact on the Company’s business strategy. The forward-looking information and statements contained in this press release reflect the current views of management and are based on currently available information and assumptions that management believes are reasonable. These assumptions include, but are not limited to, the benefits Khiron expects to realize from the acquisition of the target, the synergies expected to result from the acquisition, and assumptions about market opportunities in the countries in which the Company and the target operate or intend to operate.
Although management believes that its expectations and assumptions are reasonable, forward-looking information is always subject to known and unknown risks, uncertainties and other factors, many of which are beyond management’s control, that could cause actual results to differ materially from those expressed or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, the following: general economic conditions, adverse conditions in the capital markets, political uncertainties, counterparty risks, failure to obtain necessary regulatory requirements and approvals, failure to maintain necessary permits and licenses, business integration risks, and the other risk factors discussed in Khiron’s most recent information statement, available on Khiron’s SEDAR profile at www.sedar.com.
As a result of the foregoing and other risks and uncertainties, readers are cautioned not to place undue reliance on the forward-looking information contained in this press release. Readers are also cautioned that the foregoing risks and uncertainties are not exhaustive and that there may be other risks and uncertainties not currently known to the Company’s management that could cause actual results to differ materially from those expressed or implied by the forward-looking statements contained in this press release. The forward-looking information contained in this press release is expressly qualified by this cautionary statement. Khiron disclaims any intention to update or revise any forward-looking information disclosed herein, whether as a result of new information, future events or otherwise, except as required by law.
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