Specialty pharma company Sinclair Pharma (AIM: SPH) has announced the termination of its US distribution agreement for Decapinol mouth rinse with Orapharma Inc, allowing it to re-position the product for a larger market, particularly the over-the-counter (OTC) market in the US.
Orapharma, which is a Johnson & Johnson (NYSE: JNJ) subsidiary, previously held the rights to the niche market of sale and promotion to dental specialists in the US.
Sinclair Pharma is now free to license and reposition the product for a much larger target market, including the over-the-counter (OTC) market in the US, while the agreement with Orapharma would prevent it from doing so for “some years.” The company said discussions over such opportunities were in place.
“The refinancing of our business allows Sinclair to take a strategic view of its operations with less reliance on one-off licensing income and greater focus on ongoing revenues and profitability. There is considerable interest in Sinclair's Decapinol rinse and related dental products in the US and we will now be able to negotiate an agreement that will help maximise its potential more broadly by allowing us to quickly penetrate the US market via both the OTC as well as the specialist dental prescriptions,” said chief executive Chris Spooner.
The company has recently entered new debt facilities of £9 million and said it would scale back the proposed equity fundraising to £18 million, as planned. The funds will be used for general working capital purposes and for the proposed acquisition of dermatology products from Solvay Pharmaceuticals for €17.5 million.