Cardium and SourceOne Global Plan to Develop Nutritional Supplement & Medical Foods
Under the agreement, Cardium has made a $0.75 million equity investment in the form of unregistered, restricted Cardium shares to acquire rights to a 15% ownership interest in SourceOne Global Partners.
Dec 29 2011 --- Cardium Therapeutics announced that it has entered into a cross-strategic investment agreement with SourceOne Global Partners, a leading supplier of exclusive science-based ingredients and proprietary formulas to the nutritional supplement and related functional food & beverage industries. The Cardium and SourceOne agreement provides for the joint development and commercialization of customized nutritional supplements, as well as pharmaceuticals and medical foods based on SourceOne's branded ingredients that include specialized formulations of EPA/DHA Omega-3 oils, Citrus Polymethoxylated Flavonoids (PMFs, which have been used for promoting cholesterol balance and health), Ubiquinol-QH (a specialized CoQ10 formulation), TocoSource Palm Tocotrienols, and VESIsorb (which is designed to enhance bioavailability of a variety of nutraceutical ingredients and dietary supplements).
"We are pleased to announce this cross-equity investment agreement with SourceOne Global Partners, a global nutritional business with an industry-wide reputation in the health markets," stated Christopher J. Reinhard, Chairman and Chief Executive Officer of Cardium. "We look forward to working collaboratively with SourceOne's seasoned team to expand our MedPodium healthy lifestyle brand platform, and to identify, develop and commercialize customized nutritional supplements, as well as pharmaceuticals and medical foods through appropriate commercialization pathways."
Jesse Lopez, founder and Chief Executive Officer of SourceOne Global Partners, commented, "We look forward to working with Cardium in the development of strategic and proprietary nutraceutical products, as well as pharmaceutical and medical food product candidates designed to support cardiovascular health. We believe Cardium's extensive clinical research and development experience, combined with their business acumen, will be instrumental in expanding our leadership role in the nutritional marketplace."
Under the agreement, Cardium has made a $0.75 million equity investment in the form of unregistered, restricted Cardium shares to acquire rights to a 15% ownership interest in SourceOne Global Partners. Cardium's ownership interest was acquired through the issuance into escrow of 1.5 million shares of Cardium common stock based on a $0.50 per share value representing a 70% premium above the closing price of Cardium stock on December 19, 2011. The shares would be held in escrow and subject to release in four allotments at 6, 9, 12 and 18 months following the closing date. Cardium also has certain rights to maintain its proportionate ownership interest in SourceOne, and to acquire SourceOne in the event SourceOne were to receive an offer from a third-party acquiror.
In parallel with the cross-equity investment and acquisition of an ownership interest in SourceOne, Cardium also received a license for a portfolio of nutraceutical, pharmaceutical and medical food product opportunities for a licensing fee of $0.75 million, which SourceOne applied to the purchase of 1.5 million restricted shares of Cardium common stock at $0.50 per share, which shares are to be held in escrow for six months and subject to release at future dates thereafter based on Cardium's advancement of certain jointly-developed products. Under terms of the licensing arrangement, Cardium received a fully-paid-up license to commercialize formulations of various SourceOne ingredients to be marketed as nutraceuticals, pharmaceuticals and/or medical foods. In addition, Cardium can designate up to ten products to be jointly developed by the partners, with cash and other resources to be contributed by both Cardium and SourceOne under a profit-share arrangement.
Medical foods, which are defined in Section 5(b) of the Orphan Drug Act, are formulated and administered under the supervision of a physician and are intended for the specific dietary management of a disease or condition. There are a number of medical foods in pill and capsule form that are marketed and sold in the U.S. for disorders including depression, Alzheimer's disease, osteopenia, osteoporosis, osteoarthritis, central nervous system disorders and diabetic neuropathy.
