Kane Biotech and Animalcare to Form Animal Health Company to Target Biofilm-Related Ailments
Animalcare to Invest $5 million, Consisting of $3 million to Acquire One-Third Stake in STEM Animal
Health, Kane Biotech’s New Animal Health Subsidiary, and $2 million for Rights to
Commercialize Products in Global Veterinary Markets Outside of the Americas
Animalcare to Launch Biofilm Oral Care Range for Companion Animals in European and Asian Markets
WINNIPEG, Manitoba, Sept. 28, 2020 (GLOBE NEWSWIRE) -- Kane Biotech Inc. (TSX-V:KNE; OTCQB:KNBIF) (“Kane Biotech”) today announced that it has entered into an agreement with UK-based veterinary products company, Animalcare Group PLC (AIM:ANCR,”Animalcare”), under which the parties will form STEM Animal Health Inc. (“STEM”), a company dedicated to treating biofilm-related ailments in animals.
The agreement will see Animalcare commercialize Kane Biotech’s range of oral care products for companion animals in European and Asian markets and collaborate with Kane Biotech on the development of new biofilm treatments for animals.
Under the terms of the agreement, Kane Biotech will create a new subsidiary, STEM, in which Animalcare will invest $3 million in installments over a period of 48 months to acquire, on entering into the agreement, a one-third plus one share equity interest. STEM will be established with a global license over Kane Biotech’s existing range of animal health oral care products and in collaboration with Animalcare will also focus on the research and development of novel animal treatments based on biofilm targeting technology. Animalcare will have licensing rights over future STEM products in Europe and Asia and the option, for a period of six years, to acquire an additional one-sixth stake in the subsidiary for $4 million, payable to Kane.
STEM is designed to be self-financing from day one and will benefit from revenues already being generated in the US, Canada and South America as well as from Europe and Asia.
Additionally, in exchange for Animalcare receiving the right to commercialize Kane’s coactiv+ and DispersinB products in global veterinary markets outside the Americas, Animalcare will provide an upfront payment to Kane Biotech along with a series of potential payments linked to various commercial milestones to a combined maximum of CA$2 million (“Licensing Fee”) as well as ongoing royalties.
“We are very excited to partner with Animalcare to establish an animal health company dedicated to treating biofilms, while further expanding our footprint globally,” said Marc Edwards, President and Chief Executive Officer of Kane Biotech. “This agreement provides STEM Animal Health, Kane Biotech’s first commercialization vehicle, with capital at a valuation that is highly attractive and non-dilutive to existing Kane shareholders. This will accelerate our product development and commercialization globally and is a major step towards defining Kane Biotech as the preeminent global leader in biofilm research and product development. In the months to come, we plan on establishing additional commercialization vehicles for both our wound care and our consumer goods businesses.