Pediapharm Inc.

  • Date: 2016-02-08

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FORM 51-102F3 Material Change Report 1.

Name and Address of Company: Pediapharm Inc. (the “Issuer”) 225 - 1 Place du Commerce Verdun, QC H3E 1A2

2.

Date of Material Change(s): February 2, 2016

3.

News Release: A news release was disseminated February 2, 2016 through the facilities of Marketwire.

4.

Summary of Material Change(s): The Issuer announces that it has signed a formal asset purchase agreement with an industry third party for the sale of its United States rights to Naproxen Suspension in a transaction valued at approximately US$4.25 million. The issuer also announces that it has received US$2.25 million in cash as a first payment of the transaction.

5.

Full Description of Material Change

5.1

Full Description of Material Change: Pediapharm announces that it has signed a formal asset purchase agreement with an industry third party (the “Acquirer”) for the sale of its United States rights to Naproxen Suspension in a transaction valued at approximately US$4.25 million (the "Transaction"). Financial terms of the Transaction include: payment of US$2.25 million in cash which was received at closing and payment of US$2.0 million in cash conditional on Pediapharm being granted approval from the Food and Drug Administration (“FDA”) of the manufacturing site transfer on or before September 30, 2016. The Prescription Drug User Fee Assessment (“PDUFA”) date for the Prior Approval Supplement that Pediapharm submitted regarding the manufacturing site transfer is February 5, 2016. “We are very pleased to announce the completion of the asset purchase agreement within the estimated timeline and with a very solid industry player.” stated Sylvain Chretien, President and Chief Executive Officer of Pediapharm. He added: “As stated before, our objective was never to commercialize Naproxen Suspension in the US on our own. While our initial intent was to sign a royalty-based agreement with potential partners in the US, we also received several offers for the purchase of the rights. In the end, selling the rights was the best option for all stakeholders. For Pediapharm, it brings substantial cash immediately which will enable us to fuel the growth of our existing products, put us in a solid position for the upcoming potential launches of Rupafin™ and Otixal® in 2016 as well as allow us to seriously consider new transactions”. As stated in the press release issued on January 13, 2016, Pediapharm will retain the rights to Naproxen suspension in Canada and will continue to commercialize using its own infrastructure. The Transaction is subject to the approval of the TSX Venture Exchange.

5.2

Disclosure for Restructuring Transaction: Not Applicable

6.

Reliance on Subsection 7.1(2) or (3) of National Instrument 51-102 Continuous Disclosure Obligations: Not Applicable

7.

Omitted Information: Not Applicable

8.

Executive Officer Knowledgeable of Material Change: Roland Boivin Chief Financial Officer Telephone: (514) 762-2626 ext. 202

9.

Date of Report: February 8, 2016