IRVINE, CA--(Marketwired - May 26, 2016) - Biomerica Inc. (OTCQB: BMRA) today announced that it has entered into an exclusive license agreement with Celtis Pharm Co. Ltd of South Korea granting Celtis an exclusive license to market and sell Biomerica's new InFoods® IBS (Irritable Bowel Syndrome) products in Korea. The InFoods® IBS products identify patient-specific trigger foods that exacerbate IBS symptoms. Under the terms of the agreement, Celtis shall pay up to $1.25 million in exclusivity fees to Biomerica based on certain milestones including receipt of US FDA clearance. In addition to the exclusivity fees, a royalty fee shall be paid to Biomerica based on a percentage (in the mid-teens) of net sales of the products in Korea. The minimum royalty payments required to retain the exclusivity in Korea for the term of the agreement are $7.25 million over five years.
Biomerica also entered into a Stock Purchase Agreement with Celtis whereby Celtis has purchased 333,334 shares of the Company's restricted common stock at the purchase price of $3.00 per share for an aggregate purchase price of $1,000,002.
The exclusive territory under this license agreement is the Republic of Korea (South Korea) with a possibility of future expansion into other territories in Asia if mutually agreed upon terms are reached. The term of the exclusivity agreement is five years with an additional two years for Celtis to receive Korean FDA clearance and begins with the date Biomerica receives final clearance for sale of the InFoods® IBS products in the United States. The agreement may be cancelled if Biomerica has not obtained final clearance for sale of the Products in the United States from the United States FDA on or before December 31, 2017.
Biomerica's InFoods® products are a first-to-market, patent-pending multiplexed diagnostic that identifies trigger foods to improve Irritable Bowel Syndrome (IBS) patient outcomes. The product, based on uniquely formulated assays and statistical modeling of the results, enables identification of specific foods which exacerbate IBS symptoms. Information provided to the physician allows for personalized dietary regimens. The point-of-care product is being developed to allow physicians to perform the test in-office using a finger stick blood sample and provides new incremental revenues to a GI medical practice. A billable CPT code that can be used by both clinical labs and physicians' offices is available for InFoods® diagnostic products. Biomerica's international patent application for the InFoods® IBS product was reviewed by the International Search Authority and all claims have been deemed novel and non-obvious. Biomerica's Scientific Advisory Board is assisting and guiding the Company with the FDA regulatory process. The Scientific Advisory Board is being chaired by Douglas A. Drossman, M.D. (President of the Rome Foundation), and also includes three other key opinion leaders in the field of gastroenterology and Irritable Bowel Syndrome.
Zackary Irani, Chairman and Chief Executive Officer, stated, "We are very pleased to collaborate with Celtis in the Korean market. We are now starting discussions with other pharmaceutical companies about licensing InFoods® diagnostic products in other geographic areas. It is estimated that 10-15% of the world's population and over 45 million Americans suffer from IBS. The ability to manage IBS by identifying and eliminating patient specific foods from patient's diets could help tens of millions suffering from the disorder worldwide. Biomerica's InFoods® products provide for diagnostically-guided dietary regimens without the risk of side effects associated with drug therapy. In addition, the InFoods® technology is applicable for patients with IBS-M (mixed or alternating between Diarrhea and Constipation). This variant of the disease constitutes over 33% of the IBS market and currently no FDA approved therapeutics are available."
Mr. Hong Gye, Lim, CEO of Celtis said, "We are excited about the potential for the InFoods® product in Korea. Based on our review of the technology and science, we believe that the InFoods® products will be able to significantly improve outcomes for patients suffering with this disorder. We also believe that there is a potential to increase efficacy of IBS drugs used in combination with InFoods® treatment. In addition, we are impressed with the Scientific Advisory Board and team that Biomerica has assembled for this project."
About Biomerica (OTCBB: BMRA)
Biomerica, Inc. (www.biomerica.com) is a global biomedical company that develops, manufactures and markets advanced diagnostic products used at the point-of-care (in home and in physicians' offices) and in hospital/clinical laboratories for the early detection of medical conditions and diseases. The Company's products are designed to enhance health and well being, while reducing total healthcare costs. Biomerica primarily focuses on products for Gastrointestinal Disease, Diabetes and esoteric testing.
Celtis Pharm Co., Ltd. (http://www.celtis-pharm.com) is a pharmaceutical company focused on transforming the lives of patients with Gastrointestinal and Oncological Diseases. Celtis specializes in liquid suspension therapies and manufactures its own brands in Korea which are used in hospitals and patients throughout the country. In addition Celtis also provides contract manufacturing for other pharmaceutical companies in Korea.
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Certain information included in this press release (as well as information included in oral statements or other written statements made or to be made by Biomerica) contains statements that are forward-looking; such as statements relating to intended launch dates, sales potential, significant benefits, market size, prospects, new products, favorable outlook, new distributors, expansion, increases in productivity and margins, expected orders, leading market positions, anticipated future sales or production volume of the Company, the launch or success of product and new product offerings. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future, and accordingly, such results may differ materially from those expressed in any forward-looking statements made by or on behalf of Biomerica. The potential risks and uncertainties include, among others, fluctuations in the Company's operating results due to its business model and expansion plans, downturns in international and or national economies, the Company's ability to raise additional capital, the competitive environment in which the Company will be competing, and the Company's dependence on strategic relationships. The Company is under no obligation to update any forward-looking statements after the date of this release.