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news.Manhattan Pharmaceuticals has reported the closing of its joint venture agreement with Nordic Biotech Venture Fund II, to develop and commercialize Hedrin, the company's novel, non-insecticide treatment for head lice for the North American market.
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As a result of this closing, Manhattan has received a $2 million cash payment plus $2.5 million of equity in the newly established joint venture, which has been named Hedrin Pharmaceuticals. Manhattan has formally assigned and transferred its North American Hedrin rights to Hedrin Pharmaceuticals.
In accordance with a milestone expected to be achieved on April 30, 2008, Nordic has the right to receive, on such date, a warrant to purchase approximately 7.1 million shares of Manhattan common stock at $0.14 per share. If fully exercised, this warrant will yield an additional $1 million of capital for the company. In addition to the investment in the joint venture noted above, Nordic has made an upfront payment of $150,000 to the company.
Under the terms of the 50/50 joint venture agreement with Nordic, and upon Hedrin receiving medical device designation from the FDA by September 30, 2008, Hedrin Pharmaceuticals will receive an additional $2.5 million in cash from Nordic, pay Manhattan an additional $1.5 million in cash, and issue $2.5 million in equity to both Nordic and Manhattan.