LAVAL, QUEBEC--(Marketwire - April 24, 2012) - Warnex Inc. (WNX.TO - News) ("Warnex") announces that it has successfully completed the sale of its Analytical Services division to NEOPHARM LABS Inc. ("NEOPHARM"), the previously announced purchaser who initially bound itself to such transaction in December, 2011. Concurrent with the transaction, the parties have terminated all legal proceedings between them.
Under the terms of the transaction, which has an effective date of April 2, 2012, Warnex will realize cash proceeds of $300,000, subject to normal working capital adjustments which are to be finalized and settled by the parties post-closing. In addition, NEOPHARM will assume certain specific liabilities related to the division. The terms of the transaction also provide Warnex with the right, subject to certain conditions, to terminate the lease for its Laval, Quebec facilities, which are owned by an affiliate of NEOPHARM, prior to the current expiry date of such lease.
In addition, NEOPHARM will provide employment to the approximately 90 employees specific to the division. NEOPHARM has advised that the directors, who come with valuable years of experience, will personally manage and administer the analytical operations including: Dr. Martin Nadeau, Ph.D, Senior, Director of Microbiology; Monique Baillet, M.Sc, Director of Quality Assurance; Abderrahim Mallah, Director of Validation; Serge Lacoursiere, Director of Chromatography; and Carl Larouche, Director of Chemistry, who will continue to provide their expertise to NEOPHARM's clients.
NEOPHARM will also assume all of Warnex's lease obligations for its Blainville facility and will consolidate the operations of the Analytical Services division at such location, except for the stability chambers and certain related activities, as well as some other special projects, which shall continue to be performed out of the Laval facility. Warnex has agreed to provide NEOPHARM with certain transitional services in order to ensure the orderly transfer of the division. For further information about NEOPHARM, please visit www.neopharm.ca.
Warnex intends to use the proceeds from this transaction to support its working capital requirements and to reduce outstanding debt.
"Warnex has been working diligently over the past several months to improve its balance sheet and strategic outlook," said Michael Singer, the Chairman of the Board of Directors of Warnex. "The sale of the Analytical Services division is a key step in this process. We would like to thank the employees of the Analytical Services division for their valuable contributions over the years and are confident that the customers of this business will continue to enjoy the same high quality and professional service that they are accustomed to receiving. This transaction permits us to concentrate on our core Bioanalytical Services business, which is now the sole focus of Warnex under the excellent leadership of Dr. Michael Mancini."
Warnex continues to evaluate all of its options for maximizing the value of its remaining Bioanalytical Services division. In this regard, Warnex continues to pursue its previously announced discussions regarding potential transactions involving this division. However, Warnex cautions that there can be no assurance that any transaction will occur, or if a transaction is in fact undertaken, as to its terms or timing. Warnex's immediate priority continues to be to ensure that the Bioanalytical Services division continues to maintain the highest standards of service delivery for the benefit of its customers, its employees and its other stakeholders.
Warnex (www.warnex.ca) is a life sciences company which, through its Bioanalytical Services operations, provides bioequivalence and bioavailability studies for clinical trials at its facility located in Laval, Quebec.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this news release are forward-looking and are subject to numerous risks and uncertainties, known and unknown. For further information identifying known risks and uncertainties, relating to financial resources, liquidity risk, key customers and business partners, credit risk, foreign currency risk, government regulations, laboratory facilities, volatility of share price, employees, suppliers, and other important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the heading Risks and Uncertainties in Warnex's most recent Management's Discussion and Analysis, which can be found at www.sedar.com. Consequently, actual results may differ materially from the anticipated results expressed in these forward-looking statements.