Manhattan and Nordic Biotech amend JV agreement

As a result of this regulatory progress, the company and Nordic Biotech Venture Fund II (Nordic) have amended their joint venture agreement for the development and commercialization of Hedrin for the North American market.

This amendment separates the final tranche of cash and equity, originally due upon medical device designation, into two separate installments. The first installment is payable by June 30, 2008 and the second installment is payable upon device classification by the FDA.

Under the terms of the amended agreement, the joint venture entity, Hedrin Pharmaceuticals, is scheduled to receive the first installment of $1.25 million in cash from Nordic by June 30, 3008. Hedrin Pharmaceuticals will then distribute $1 million in cash to Manhattan Pharmaceuticals and equity to each of Manhattan Pharmaceuticals and Nordic sufficient to maintain their respective ownership interests at 50%.

In the second installment, due upon classification of Hedrin by the FDA as a Class II or Class III medical device, Hedrin Pharmaceuticals will receive $1.25 million in cash from Nordic, and will then distribute $0.5 million cash to Manhattan Pharmaceuticals and equity to each of Manhattan Pharmaceuticals and Nordic sufficient to maintain their respective ownership interests at 50%.

The total of both installments results in payment and distribution of the same aggregate amounts agreed to under the original joint venture agreement. Upon fulfillment of the final tranche, Hedrin Pharmaceuticals will have received a total of $1.5 million cash to be applied toward the development and commercialization of Hedrin in North America.