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Once given up for dead, Medicure is growing again

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A few years ago, Winnipeg's Medicure Inc. was on the verge of developing an important new heart drug.

But after 10 years and about $100 million in costs, the clinical trials failed and the company's prospects for survival were grim.

All it was left with was the U.S. rights to an orphaned heart drug called Aggrastat.

"Ever since the wheels feel off on the old MC1 (Medicure's failed heart drug) we've been trying to find ways to get legs under this chair," said Medicure president Dawson Reimer. "For some time we did not know for certain if Aggrastat would turn around and if it did not we knew for certain we would run out of nine lives."

Since then, Aggrastat has turned around. In its most recent quarterly result, sales were up 266 per cent to $1.6 million -- and Reimer is optimistic for its future.

This week, Medicure helped orchestrate a US$22.5-million refinancing of a U.S. company, called Apicore LLC, that makes pharmaceutical ingredients.

Apicore has a plant in New Jersey and another in India, with about 140 total employees and a solid portfolio of clients with FDA approved drugs.

For its efforts in the deal, Medicure received a six per cent equity stake in Apicore and the option to buy the whole company in three years.

The debt and equity financing deal involves three other partners, including Knight Therapeutics.

Montreal-based Knight, run by Jonathan Goodman, is the new offshoot of Paladin Labs, a specialty pharmaceutical company that sold earlier this year for $3 billion.

That deal made Knight and Goodman darlings of the industry and Medicure's association with it brings some goodwill its way as well.

A few weeks ago, Medicure announced that Knight would be consulting Medicure on U.S. opportunities.

Over the years Medicure founder and chairman Albert Friesen has built up an enviable network of investors and scientists around the world. He and Reimer are also committed to the company's long-term investors and are loathe to dilute the equity base of the company with new financings.

Apicore was one of the companies it did come across and Medicure found the partners to close the deal without incurring any cash costs.

Jeffrey Kadanoff, Knight Therapeutics' chief financial officer, said his company is happy to partner with Medicure.

"Jonathan's reputation is very strong based on that experience (the Paladin sale)," Kadanoff said. "When he helps companies out it generally has a positive halo effect so to speak."

This is the third deal Knight has done after it was created earlier this year.

While Medicure has the option to buy the rest of Apicore in three years, Reimer said it will depend on Apicore's performance..

"If Apicore does not perform well and does not meet the valuation then it won't be worth doing," Reimer said. "And if Medicure is struggling it will not be easily financed."

martin.cash@freepress.mb.ca

 

Republished from the Winnipeg Free Press print edition July 4, 2014 B14

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