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Lorus trades C$3.3 million in cash, license agreement for debentures
By Devika Patel
Knoxville, Tenn., June 23 - Lorus Therapeutics Inc. said it bought back C$15 million in secured convertible debentures from Erin Mills Investment Corp.
The debentures were bought for C$3.3 million in cash, rights under a license agreement with ZOR Pharmaceuticals, LLC, intellectual property associated with Virulizin and Lorus' equity stake in its subsidiary, Pharma Immune Inc.
Under the agreement, Lorus will be entitled to 50% of any royalties received under the ZOR license agreement and 50% of the deal value of any transaction completed in territories not covered by the ZOR license agreement.
Lorus also retains a perpetual, royalty-free license for the animal use of Virulizin.
The investor will be fully responsible for all clinical and regulatory costs associated with commercialization of Virulizin in territories not covered by the ZOR license agreement.
"The settlement announced today is a key turning point for Lorus and our shareholders," Lorus' president and chief executive officer, Dr. Aiping Young, said in a press release. "We are now able to focus on the development of our promising pipeline together with establishing key partnerships and strategic alliances which have previously been difficult to execute with the overhang of such a significant liability.
"We are also pleased that this liability could be resolved with no dilution to our shareholders while allowing us to retain a significant portion of the future value of Virulizin."
Toronto-based Lorus is a biopharmaceutical company that develops and commercializes pharmaceutical products for the management of cancer.
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