RoundTable Hopes For Another Injectable Success Story –

Bioniche Life Sciences Inc. (BLS) is one of the many biopharmaceutical companies searching for the cure to cancer. And as the Belleville, Ontario-based company prepares to enter a new phase of research on a proprietary cancer treatment, it decided late last month to divest a majority interest of its injectable pharmaceutical subsidiary in order to devote more time and capital to the cause.

And perhaps as a testament to the frenetic pace of the healthcare sector, less than a week after BLS announced that the subsidiary, Bioniche Pharma Group Ltd., was put up for sale, it announced that RoundTable Healthcare Partners has signed an exclusive, letter of intent to purchase BLS’s 65% stake in the subsidiary. In addition, Bioniche Pharma’s minority shareholder, ICC Private Equity Fund, has also agreed to terms for the sale of its stake to RoundTable. Financial terms of the transaction were not disclosed.

County Galway, Ireland-based Bioniche Pharma is a specialty pharmaceutical company involved primarily in the development, manufacturing, and marketing of sterile injectable products. The company sells a number of non-branded products to both the primary care and hospital markets in the U.S., Canada and Europe, in addition to selling Suplasyn-a branded, injectable knee and joint lubricant-to markets in about 30 countries globally.

Jack McGinley, a founding partner at RoundTable, said that Bioniche Pharma will serve as a strategic generic pharmaceutical platform for the Lake Forest, Ill-based firm. “Bioniche Pharma is a unique and thriving pharmaceutical business with a solid track record and substantial potential for future growth,” he said, noting that the company has a “valuable” pipeline of products and that it recently built an additional 20,000 square-foot manufacturing facility in Galway and a valuable pipeline of products.

In terms of value-add, McGinley said RoundTable expects to “accelerate investments in [Bioniche Pharma] and operations in Galway.”

RoundTable is well versed in the injectable pharmaceutical space. In April 2002, the firm acquired a majority interest in Sabex Holdings Ltd., a Quebec-based manufacturer and distributor of generic injectable pharmaceuticals, and reportedly made more than 8x its money in August 2004 when it exited the investment to Novartis AG for $565 million.

On the sell side, BLS said it is focusing its corporate energy on its “high potential” strategic priorities, which include the Phase III clinical trial of its Mycobacterial Cell Wall-DNA Complex for bladder cancer and the licensing of its E. coli vaccine for cattle. In addition, proceeds from the sale will be put toward paying down the more than $30 million in debts and liabilities on BLS’s balance sheet. However, this sale is not a complete exit for either investor.

Both BLS and ICC will retain minority ownership positions in Bioniche Pharma and have agreed to participate in the future growth of the business. Other terms of the transaction will be disclosed upon signing of definitive agreements, which is expected to occur in November.

RoundTable is currently investing out of its second fund, which closed on $500 million in limited partner commitments earlier this year. RoundTable’s strategy is to invest in healthcare segments that offer above-average growth, below-average risk and predictable cash flows. Healthcare areas it invests in include: disposables, medical devices, medication delivery systems, specialty pharmaceuticals, complementary outsourced servicesanies.

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