SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: July 9, 1998
PARACELSIAN, INC.
(Exact name of Registrant as Specified in Its Charter)
DELAWARE 56-1399565
(State of Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
222 Langmuir Laboratories
Cornell Technology Park
Ithaca, New York 14850
(607) 257-4224
(Address, Including Zip Code and Telephone, Including Area Code,
of Registrant's Principal Executive Offices)
Bernard Landes
222 Langmuir Laboratories
Cornell Technology Park
Ithaca, New York 14850
(607) 257-4224
(Address, Including Zip Code and Telephone, Including Area Code,
of Registrant's Principal Executive Offices)
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ITEM 5. OTHER EVENTS
Paracelsian, Inc. has entered into an agreement with R.P. Scherer North
America, a division of R.P. Scherer Corporation, that establishes R.P. Scherer
North America as the exclusive marketing and distribution agent for
Paracelsian's BioFIT (Bio Functional Integrity Testing) Certification program in
the Dietary Supplement and OTC market segments in North America. The agreement
also provides for collaboration between the two companies on the development of
new dietary supplements and OTC products.
Under the terms of the North American agreement, Paracelsian will
initially complete development of 10 BioFIT assay systems. R.P. Scherer North
America will pay Paracelsian initial fees, concurrent with the completion of the
BioFIT assay systems, certification of products, and completion of agreements
with R.P. Scherer customers. The companies will market the program jointly. The
terms of the agreement further call for Paracelsian to receive royalties on the
sale of all BioFIT certified products and the establishment of minimum royalty
payments.
In addition to the initial fees, Paracelsian Inc. will receive a
minimum of $400,000 in royalty payments in the initial period of the agreement.
Paracelsian must receive minimum royalties of $700,000 in the subsequent
12-month period. The agreement will continue to renew automatically, with
Paracelsian receiving royalties adjusted upward annually. Total fees paid to
Paracelsian in the initial period are expected to be $1 million. The agreement
also calls for negotiation of a worldwide agreement within 90 days, on terms and
conditions essentially equivalent to those in the North American agreement.
Sales of herbal remedies in North America represent 18% of worldwide
sales.
This report contains various "forward looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, that represent the Company's judgment
concerning the future and are subject to risks and uncertainties that could
cause the Company's actual operating results and financial position to differ
materially from those projected in the forward looking statements. Such forward
looking statements can be identified by the use of forward looking terminology,
such as "may," "will," "expect," "anticipate," "estimate," or "continue" or the
negative thereof or other variations thereof or comparable terminology. The
Company cautions that any such forward looking statements are further qualified
by important factors that could cause the Company's actual operating results and
financial position to differ materially from the forward looking statements,
including, without limitation, the actual results of research and development
efforts, the effect of regulation by the United States Food and Drug
Administration and other government agencies, the impact of competitive products
and services, and other considerations described in connection with specific
forward looking statements and the Company's periodic reports as filed with the
Securities and Exchange Commission. The Company undertakes no obligation to
release publicly the results of any revisions to these forward looking
statements to reflect events or circumstances arising after the date of this
report.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) EXHIBITS.
Exhibit No. Description
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99 Press Release dated July 9, 1998
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly cause this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
PARACELSIAN, INC.
By: /s/ BERNARD LANDES
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Bernard Landes
Chairman and Chief Executive Officer
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THURSDAY JULY 9, 12:36 PM EASTERN TIME
COMPANY PRESS RELEASE
SOURCE: PARACELSIAN, INC.
PARACELSIAN ANNOUNCES STRATEGIC ALLIANCE WITH R.P. SCHERER
ITHACA, N.Y., July 9 /PRNewswire/ -- (Nasdaq: PRLN - news) Paracelsian, Inc.
(http://www.paracelsian.com) announced today that it has signed a definitive
agreement with R.P. Scherer (NYSE: SHR - news) that establishes R.P. Scherer
North America as Paracelsian's exclusive agent for the marketing and
distribution of its BioFIT Certification program. In addition, the Agreement
provides for collaboration between the two companies in the development of new
dietary supplements and OTC products.
R.P. Scherer (http://www.rpscherer.com), is a leading manufacturer of herbal and
other dietary supplement products, and the world leader in soft gel technology
and drug delivery systems.
The agreement between Paracelsian and R.P. Scherer covers the North American
market and calls for negotiation of a worldwide agreement within 90 days, on
terms and conditions essentially equivalent to those in the North American
agreement. Revenues to Paracelsian from this agreement include development fees,
certification fees, and minimum required royalty payments.
"This represents significant value to Paracelsian and its shareholders", stated
Bernie Landes, Paracelsian's President and CEO. "The agreement covers the cost
of developing and running the BioFIT Certification Program, while also providing
a continuing, growing, and highly profitable royalty stream," he added.
"The past several months have been particularly difficult because of the
pressure to meet the expectations of stockholders to complete a deal with a
major corporate partner, thereby validating our new corporate strategy.
Fortunately, we were able to proceed in a prudent manner to reach a deal with
the partner that we believe will maximize value for Paracelsian shareholders.
This partnership supersedes any prior discussions with other potential partners
in the degree of credibility and value it adds to Paracelsian's core
technology," Landes concluded.
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Under the terms of the North American agreement, Paracelsian will initially
complete development of 10 BioFit assay systems. R.P. Scherer will receive
exclusive BioFit marketing and distribution rights. R.P. Scherer will pay
Paracelsian fees concurrent with the completion of BioFIT assay systems,
certification of products, and completion of agreements with new customers. The
terms of the agreement call for Paracelsian to receive royalties on the sale of
all BioFIT certified products and the establishment of minimum royalty payments.
In addition to these fees, Scherer agrees to pay Paracelsian a per batch fee for
ongoing certification of products on a batch to batch basis. These fees
represent a significant additional source of revenue to Paracelsian.
"R.P. Scherer is pleased to conclude this agreement with Paracelsian. The
exclusive right to produce and market herbal products under the BCP further
strengthen R.P. Scherer's leadership in the herbal category, today and in the
future," said David Heyens, VP of R.P. Scherer's Nutritional Division. "We are
excited to promote this program and are committed to an aggressive marketing
program."
R.P. Scherer Corporation an international developer and manufacturer of drug
delivery systems, is the world's largest producer of soft gelatin capsules
("soft gels"). The company is currently developing and commercializing a variety
of advanced drug delivery systems. The company's proprietary drug delivery
systems improve the efficacy of drugs by regulating the dosage so as to ease
administration, increase absorption, enhance bioavailability and control the
time and place of release. The company operates a global network of 19
facilities in 12 countries.
Paracelsian is a unique biotechnology company whose business centers on the
development and application of functional bioassays. These assays are used for
Quality Assurance of herbs, botanicals and other dietary supplements, in the
development of dietary supplement, OTC and pharmaceutical products, and in
monitoring environmental toxins and identifying carcinogens.
Notice: This news release may contain forward-looking statements.
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Investors are cautioned that such forward-looking statements involve risks and
uncertainties, including but not limited to, the results of research and
development efforts, the effect of regulation by the United States Food and Drug
Administration and other agencies, the impact of competitive products, product
development commercialization and technological difficulties, and other risks
detailed in the Company's periodic reports filed with the Securities and
Exchange Commission.
No forward-looking statement is a guarantee of future results or events, and one
should avoid placing undue reliance on such statements.
SOURCE: Paracelsian, Inc.
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