DEESIDE, Flintshire, U.K., Dec. 16, 2003 (PRIMEZONE) -- Provalis plc (LSE: PRO; NASDAQ: PVLS), the Medical Diagnostics and Pharmaceuticals Group, announces that the arbitration it commenced against Dimethaid International Inc. following Dimethaid's termination of the Pennsaid distribution agreement has been decided in Provalis' favour, and that as a result Provalis has been awarded the compensatory sum of just over GBP1.2m, together with costs and interest of approximately GBP360k.
Dr. Phil Gould, Chief Executive Officer of Provalis, said "I am very pleased with the outcome of the arbitration and that this matter has now been brought to a close. This award will reinforce our cash position and assist the development of the Group."
Provalis' Internet Website ; http://www.provalis.com
"Safe Harbor" Statement under the US Private Securities Litigation Reform Act of 1995: Statements in this announcement that relate to future plans, expectations, events, performances and the like are forward-looking statements as defined in the US Private Securities Litigation Reform Act of 1995. Actual results of events could differ materially from those described in the forward-looking statements due to a variety of factors. Such factors include, among others: the viability of the Group's products, which are at various stages of development; the generation of sufficient operating cash flow by the Group's pharmaceutical and medical diagnostic businesses to finance the ongoing development of these businesses as well as the Group's research and development activities; the success of the Group's research and development strategy and activities; uncertainties related to future clinical trial results and the associated regulatory process; the execution and success of collaborative agreements with third parties; availability and level of reimbursement for the Group's products from government health administration authorities or other third-party payors; the rate of net cash utilisation within the Group and, hence, the Group's possible need for additional capital in the short, medium and/or long term; the Group's intellectual property position and the success of patent applications for its products and technologies; the Group's dependence on key personnel; general business and economic conditions; the impact of future laws, regulations and policies; stock market trends in the Group's sector; and other factors beyond the Group's control that may cause the Group's available capital resources to be used more quickly than expected. These and other factors that could affect the Company's future results are more fully described in its filings with the US Securities and Exchange Commission, in particular the latest 20-F filing, copies of which are available from the Company Secretary at the Company's registered address.
Notes to Editors
Provalis plc (LSE:PRO and NASDAQ:PVLS) is a diversified healthcare company with two operating businesses:-
-- Medical Diagnostics -- develops and sells to world markets medical diagnostic products for chronic disease management. The division's principle products are Glycosal(R) and Osteosal(R) in the areas of diabetes and osteoporosis respectively.
-- Pharmaceuticals -- sells and markets its own, and third party, branded, prescription medicines in the UK and Ireland to GPs and hospitals through its own regionally managed sales force. The division's principle product is Diclomax(R), a medicine for use in the treatment of musculo-skeletal disorders, and it also sells products in the areas of gastroenterology, osteoporosis, migraine and dermatology.
Pennsaid Distribution Agreement
The distribution agreement under which Provalis Healthcare was appointed to distribute Pennsaid in the UK was signed by Provalis Healthcare Limited and Dimethaid International Inc on 5th January 2001.
On 14th June 2002, Provalis plc announced that it had unexpectedly received a notification from Dimethaid International Inc. purporting to terminate the Pennsaid distribution agreement, but that Provalis did not believe Dimethaid was entitled to terminate the agreement.
On 20th June 2002, Provalis further announced that following a review of the position it had concluded that, whilst Dimethaid was not entitled to terminate the Agreement, the actions taken by Dimethaid had irreparably damaged the relationship between the two companies and that as a consequence, Provalis had no alternative but to treat the Agreement as terminated.
Provalis subsequently commenced arbitration proceedings against Dimethaid seeking full compensation for its losses. The arbitration hearing was held during the week commencing 6th October 2003, and Provalis was notified of the arbitration award on 15th December 2003.
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