Encorium Group Provides Update to LOI with Respect to the Sale of its U.S. Business
May 18 2009 - 4:05PM
PR Newswire (US)
WAYNE, Pa., May 18 /PRNewswire-FirstCall/ -- Encorium Group, Inc.
(NASDAQ: ENCO), a full service multinational contract research
organization (CRO) that provides design, development, and
management capabilities for clinical trials and patient registries
to many of the world's leading pharmaceutical companies, today
announced that the initial non-binding letter of intent with
respect to its U.S. business has been terminated and that the
Company has entered into another letter of intent with Pierrel SpA,
an international contract research organization listed on Milano's
Stock Exchange. Subject to the negotiation of a definitive
agreement, pursuant to the letter of intent, Pierrel has the right
to purchase the U.S. Line of Business for a purchase price equal to
a percentage of the Company's U.S. backlog calculated as of the
closing or $1.35 million, whichever is greater, less the amount, if
any, that assumed current liabilities, less assumed current assets
exceeds $350,000. In addition to the purchase price payable at
closing, Pierrel will pay Encorium a 10% commission on the value of
any new contract, net of pass-through costs, executed after the
closing date but prior to December 31, 2009, which constitute part
of the Company's pipeline at closing. Encorium Group plans to file
a Current Report on Form 8-K with the United States Securities and
Exchange Commission today containing a more detailed description of
the parties' rights and obligations under the agreement. About
Encorium Group, Inc. Encorium Group, Inc. is a global clinical
research organization specializing in the design and management of
complex clinical trials and Patient Registries for the
pharmaceutical, biotechnology and medical device industries. The
Company's mission is to provide its clients with high quality,
full-service support for their biopharmaceutical and medical device
development programs. Encorium offers therapeutic expertise,
experienced team management and advanced technologies. The Company
has drug and biologics development as well as clinical trial
experience across a wide variety of therapeutic areas such as
infectious diseases, cardiovascular, vaccines, oncology, diabetes
endocrinology/metabolism, gene therapy, immunology, neurology,
gastroenterology, dermatology, hepatology, women's health and
respiratory medicine. Encorium believes that its expertise in the
design of complex clinical trials, its therapeutic experience and
commitment to excellence, and its application of innovative
technologies, offer its clients a means to more quickly and cost
effectively move products through the clinical development process.
Encorium is headquartered in Wayne, Pennsylvania with its European
base of operations in Espoo, Finland. The Company has a geographic
footprint that includes over one billion people in North America,
Western/Central/Eastern Europe, Scandinavia, and the Baltics. This
press release contains forward-looking statements identified by
words such as "estimate," "project," "expect," "intend," "believe,"
"anticipate" and similar expressions regarding the potential sale
of the U.S. business and our expectations regarding the effects of
such transactions. Those statements involve risks and
uncertainties, and actual results could differ materially from
those discussed. Factors that could cause or contribute to such
differences include, but are not limited to: (i) the timing of the
closing, if any, of the transaction; (ii) the completion to the
purchaser's satisfaction of due diligence; (iii) our ability to
negotiate a definitive agreements with the Purchaser; (iv) the
possibility that the transaction may not close; and (vi) the risk
that any distributions to stockholders in connection with the
transaction and with respect to the potential sale of Encorium Oy
will not result in a premium to the current stock price. Additional
risks and uncertainties that could affect the Company's future
operating results and financial condition generally include,
without limitation: (i) the risk that we may not have sufficient
funds to operate our business; (ii)our success in attracting new
business and retaining existing clients and projects; (iii) the
size, duration and timing of clinical trials we are currently
managing may change unexpectedly; (iv) the termination, delay or
cancellation of clinical trials we are currently managing could
cause revenues and cash-on-hand to decline unexpectedly; (v) the
timing difference between our receipt of contract milestone or
scheduled payments and our incurring costs to manage these trials;
(vi) outsourcing trends in the pharmaceutical, biotechnology and
medical device industries; (vii) the ability to maintain profit
margins in a competitive marketplace; (viii) our ability to attract
and retain qualified personnel; (ix) the sensitivity of our
business to general economic conditions; (x) other economic,
competitive, governmental and technological factors affecting our
operations, markets, products, services and prices; (xi) announced
awards received from existing and potential customers are not
definitive until fully negotiated contracts are executed by the
parties; (xii) our backlog may not be indicative of future results
and may not generate the revenues expected; (xiii) our ability to
successfully integrate the business of Remedium Oy, which we
acquired on November 1, 2006; (xiv) the performance of the combined
businesses to operate successfully and generate growth; and (xv)
uncertainties regarding the availability of additional capital and
continued listing of our common stock on Nasdaq. You should not
place undue reliance on any forward-looking statement. We undertake
no obligation to publicly release the result of any revision of
these forward-looking statements to reflect events or circumstances
after the date they are made or to reflect the occurrence of
unanticipated events. Please refer to the section entitled "Risk
Factors" in the Form 10-K for a more complete discussion of factors
which could cause our actual results and financial position to
change. You should not place any undue reliance on these
forward-looking statements which speak only as of the date of this
press release. Additional information concerning factors that might
affect our business or stock price which could cause actual results
to materially differ from those in forward-looking statements is
contained in Encorium Group's SEC filings, including its Annual
Report on Form 10-K for the year ended December 31, 2008 and other
periodic reports under the Securities Exchange Act of 1934, as
amended, copies of which are available upon request from Encorium
Group's investor relations department. CONTACT: Encorium Group,
Inc. Cameron Associates Philip L. Calamia, Chief Financial Officer
Alison Ziegler 610-975-9533 212-554-5469 http://www.encorium.com/
DATASOURCE: Encorium Group, Inc. CONTACT: Philip L. Calamia, Chief
Financial Officer, Encorium Group, Inc., +1-610-975-9533; or Alison
Ziegler, Cameron Associates, +1-212-554-5469, Web Site:
http://www.encorium.com/
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