Columbia Laboratories, PharmaBio Extends Final Payment Under STRIANT Financing Agreement

Columbia Laboratories has signed an agreement with PharmaBio under which Columbia can extend its final royalty payment on sales of STRIANT from November 2010 to November 2011. The final payment is estimated at approximately $16.4 million.

Columbia and PharmaBio have agreed that on the due date in November 2010, Columbia may either pay the balance due or issue a secured promissory note for that balance, to PharmaBio.

The note would bear interest quarterly at the rate of 10% per annum, be due on November 30, 2011, and be secured by Columbia’s assets.

Considering this right, Columbia has agreed to escrow any proceeds from the sale of assets outside the ordinary course of business in excess of $15 million for the remaining term of the royalty agreement. It would grant PharmaBio a warrant, exercisable for five years, to purchase 900,000 shares of Columbia’s common stock at $1.15 per share.

Reportedly, if Columbia elects to deliver the secured promissory note in November 2010 for the balance due on the royalty agreement, it will grant PharmaBio a second warrant to purchase 900,000 shares of Columbia’s common stock on the same terms.

Robert Mills, president and CEO of Columbia Laboratories, said: “We are very pleased that PharmaBio has agreed to extend the date of the STRIANT royalty payment. This will allow us to focus our energy on the PREGNANT Study, our Phase III clinical trial of PROCHIEVE 8% for the prevention of preterm birth in women with a short cervix at mid-pregnancy. This important trial has the potential, if the results are positive, to deliver significant returns for Columbia and its shareholders. We expect to complete enrollment by late 2009, report results in mid-2010 and, if the results are positive, obtain FDA approval in mid-2011.”