Bioniche closes funding, licensing deal with Paladin

Bioniche (ASX:BNC) has officially closed its debt refinancing, funding and product licensing deal with Canada’s Paladin Labs.

The companies entered into the wide-reaching collaboration last month. As part of the deal, Bioniche is granting Paladin an exclusive licence to market and distribute phase III bladder cancer candidate Urocidin in Canada, South Africa and Mexico.

With the deals now closed, Paladin Labs has issued Bioniche an extra C$5 million ($4.7 million) in debt financing. Paladin Labs had already purchased Bioniche’s existing debt facility with Capital Royalty Partners in a deal worth around C$22 million ($22.9 million).

Bioniche has in turn given Paladin the option to purchase up to 3 million in Bioniche shares - 2 million at prices between C$0.31 and C$1.00, and up to a further 1 million at market prices if the loan is not repaid by April 2014.

The licensing component of the collaboration will have Bioniche pay for the remaining product development and manufacturing costs, while Paladin will take on the marketing and sales costs in the three markets.

The companies will share net revenue from sales. Paladin Labs has offered sales performance milestones worth up to C$16 million ($15.1 million) as part of the licensing deal.

Bioniche took back the global rights to Urocidin in April after calling off its original licensing agreement for the product with Endo Pharmaceuticals.

Bioniche shares were trading unchanged at $0.30 as of around 1.30 pm on Monday. Its shares on the Toronto Stock Exchange closed out last week at C$0.33.