Covalon Announces Major License and Distribution Agreement with Molnlycke Health Care
MISSISSAUGA, ON, Nov. 4, 2013 /PRNewswire/ - Covalon Technologies Ltd. (the "Company" or "Covalon") (TSXV: COV), an advanced medical technologies company, today announced that it has licensed its antimicrobial silicone adhesive technology to Molnlycke Heath Care ("Molnlycke").
Under the license agreement, Covalon has granted Molnlycke the exclusive rights to exploit Covalon's patent-pending antimicrobial silicone adhesive technology in the field of single-use surgical, wound care and vascular access medical dressings.
Covalon will receive $3.5 million in upfront license fees and additional ongoing minimum royalties, milestone payments and other fees. Covalon retains the rights to exploit the antimicrobial silicone adhesive technology in other fields and commercialize new life-saving products in its development pipeline while continuing to distribute its other products.
The parties simultaneously signed a supply and distribution agreement under which Covalon will provide to Molnlycke its United States Food and Drug Administration (FDA) cleared products, SurgiClear™ and IV Clear™, for distribution under the Molnlycke brand.
Covalon's antimicrobial silicone adhesive technology is the key component of IV Clear and SurgiClear, a transformative technology in the medical dressing market because it is extremely gentle on the skin and has powerful antimicrobial capabilities. IV Clear and SurgiClear have been clinically validated by leading clinicians in some of the largest and most well respected medical institutions in the United States, Canada and the Middle East as an important tool in the fight against healthcare acquired infections. Of the approximately $10 billion spent annually treating healthcare acquired infections in the United States, over half the cost is attributed to blood stream and surgical site infections - the two primary markets addressed by IV Clear and SurgiClear.
Brian Pedlar, Covalon's Chief Executive Officer said, "We are delighted to sign a major agreement with Molnlycke, the best partner for Covalon to license its antimicrobial silicone adhesive to because of their domination of the silicone wound dressing market. Molnlycke's global reach and talented sales force will greatly expand the distribution of Covalon's antimicrobial silicone adhesive technology in the surgical, wound care and vascular access markets. With some 7,400 staff across over 30 countries and over 1.7 billion medical dressings and surgical products made per year, Molnlycke is the clear market leader in silicone wound dressings. Molnlycke is well positioned to take IV Clear and SurgiClear into market leading positions. This license and distribution agreement is a major validation of our team's ability to research, develop and commercialize breakthrough products and we are looking forward to developing new products with Molnlycke based on our antimicrobial silicone adhesive technology."
Covalon Technologies Ltd. researches, develops and commercializes new healthcare technologies that help save lives around the world. Covalon's patented technologies, products and services address the advanced healthcare needs of medical device companies, healthcare providers and individual consumers. Covalon's technologies are used to prevent, detect and manage medical conditions in specialty areas such as wound care, tissue repair, infection control, disease management, medical device coatings and biocompatibility. To learn more about Covalon, visit our website at www.covalon.com
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SOURCE Covalon Technologies Ltd.