Ondine to sell dental healthcare business

Apr 7, 2009

Ondine Biopharma has entered into a nonbinding letter of intent with JS Dental Technologies (JSDT) to sell its dental healthcare business to JSDT.

Subject to the execution of definitive agreements and Ondine shareholder approval, the proposed transaction would provide Ondine with continued economic benefits and cash flows to be used for the development of expanded applications of its Periowave photodisinfection platform technology, the company announced.

Periowave is approved by Health Canada for the treatment of gum disease and other oral indications and is used in approximately 400 dental offices and teaching schools across Canada, Ondine noted.

Under terms of the proposal, Ondine and JSDT will collaborate on sales and marketing of Periowave. Ondine would receive a stream of milestone payments ranging from $200,000 to $12.5 million based on cumulative sales thresholds ranging from $10 million to $1 billion achieved via the collaborative arrangement with JSDT.

In the event of a subsequent sale to a third party, Ondine would receive, in lieu of further royalties and milestone payments, a percentage of all proceeds of such sale, up to a maximum of 40% in the first year and declining on a yearly basis to 5% in the sixth year and 2.5% thereafter. Ondine will also receive an up-front cash payment of $725,000 Canadian ($586,000), royalties, manufacturing margins, and management consulting and product development fees.

"We believe that this proposed sale will ensure that Periowave not only continues to grow as a leading dental technology to combat gum disease, but will also be expanded to assist dental professionals in treating other oral infections," said Ondine Chairman and CEO Carolyn Cross in a press release. "Periowave is currently used by 12% of Canadian periodontists and in select European Union countries and, pending the successful outcome of our application to the FDA, will become an important product in the U.S."

Upon completion of the proposed transaction, Ondine plans to focus on further advancing its MRSAid nasal decolonization system, which is designed to kill bacteria in the nasal passages, a key reservoir for methicillin-resistant Staphylococcus aureus (MRSA) and a significant source of MRSA infections.