Business Editors/Health & Medical Writers
TEMPE, Ariz.--(BW HealthWire)--Oct. 9, 2000
Decision is Part of OrthoLogic's Strategic Plan to Focus Increased
Attention on its Proprietary Orthopedic Products
OrthoLogic Corp. (Nasdaq:OLGC) today announced that the company and Sanofi-Synthelabo, Inc. have mutually agreed to terminate their Hyalgan(r) co-promotion agreement.
In exchange for the return of OrthoLogic's rights to Sanofi to sell Hyalgan to the orthopedic market, OrthoLogic received an upfront cash payment, financial incentives to complete a successful transition of the business, and continuing royalties for the next two years on all U.S. sales of Hyalgan in all market segments.
Hyalgan (sodium hyaluronate), a product administered by injection directly into the knee joint for relief of pain in mild to moderate osteoarthritis of the knee, was developed by Fidia SpA of Italy and is marketed in the U.S. by Sanofi-Synthelabo and OrthoLogic.
In June 1997, OrthoLogic signed a co-promotion agreement with Sanofi-Synthelabo for the rights to sell Hyalgan in the U.S. orthopedic market. The initial term of the agreement was for five years, with provisions for extensions at the discretion of Sanofi. Recent changes in strategic direction for both companies regarding the orthopedic market led to a mutual decision to terminate the agreement at the end of 2000.
The companies have agreed to use the fourth quarter of 2000, beginning immediately, as a transition quarter, with Sanofi assuming all sales and marketing responsibility for all markets beginning in January 2001.
"We are very pleased to have reached a mutually acceptable agreement with Sanofi regarding Hyalgan," said Thomas R. Trotter, president and CEO of OrthoLogic. We plan to work very closely with Sanofi during the remainder of this year to effectuate a smooth transition of the business."
Trotter added, "Achieving this agreement with Sanofi was a key element of our long-term plan to shift more attention back to our own proprietary product lines to further enhance their positions in the orthopedic marketplace.
"The financial terms of this agreement will provide OrthoLogic with a considerable increase in our investment capacity as well as provide us with continuing royalty income for 2001 and 2002. The agreement is expected to result in a one-time financial gain in the fourth quarter ending December 31, 2000, for OrthoLogic"
OrthoLogic develops, manufactures and markets proprietary, technologically advanced orthopedic devices designed to promote the healing of musculoskeletal tissue. Founded in 1987, the company is located in Tempe, Ariz. For more information, please visit the company's Web site: www.orthologic.com.
Statements in this release that are not historical may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although the company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially.
For a more complete description of the risks and uncertainties that face the company, please see the company's annual report on Form 10-K for the fiscal year ended December 31, 1999, the company's quarterly report on form 10-Q for the period ended June 30, 2000, and other documents filed by the company with the Securities and Exchange Commission.
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