NEXM: Management Discusses Agreement to Acquire Bio-Quant, Inc. [delayed]

Ridgeland, MS, NOV 23, 2009 (EventX/Knobias.com via COMTEX) --
NEXM | Quote | Chart | News | PowerRating -- NexMed, Inc. (NEXM) announced today that it has entered into a definitive agreement to acquire Bio-Quant, Inc., a revenue generating privately-held research organization for in vitro and in vivo contract drug discovery and pre-clinical development services, headquartered in San Diego, CA. Upon closing of the transaction, which is expected before the end of the year, Bio-Quant will become a wholly-owned subsidiary of NexMed. Bassam Damaj, Ph.D., co-founder, current CEO and Chief Scientific Officer of Bio-Quant, will become Chief Executive Officer of NexMed, replacing Vivian Liu, who will transition to the role of Executive Vice President and, in that capacity, Ms. Liu will continue to be responsible for leading the business development and licensing efforts for NexMed's clinical programs. Mark Westgate will remain as NexMed's Chief Financial Officer. The Board will be composed of three Bio-Quant nominees and four NexMed nominees, and Ms. Liu is expected to be appointed as Chairman of the Board. The agreement provides for NexMed's issuance of 4,000,000 unregistered shares of its common stock to the Bio-Quant shareholders and a promissory note in the amount of approximately $12.1 million due on December 31, 2010. NexMed can elect to pay all or any portion of the Note by issuing its common stock. In a conference call today, Ms. Liu commented, "Bio-Quant is one of the industry's most experienced and well respected companies. Their team has contributed to the successful submission of more than 50 investigational new drug applications on behalf of their clients. Their resources and contacts within the pharmaceutical industry are wide-ranging and a valuable asset that we will tap into immediately upon closing."She continued, "Following the acquisition, we will become an operating company with a steady stream of revenue to help finance our ongoing business development activities. This deal also adds a cash flow positive business with a sound and proven business strategy for growth. Bio-Quant has experienced more than a 250% growth over the past five years alone, and it continues to grow steadily despite a difficlut economic and industry environment.Ms. Liu explained, "This acquisition stregthens our balance sheet which will enable us to negotiate from a position of strength with potential licensing partners. It also allows us to gain enough critical mass to retain our Nasdaq listing."She added, "The skill sets of our two management teams are very complimentary, and the synergies between our companies are excellent. I envision a fairly smooth integration of the two companies. We are very positive about the potential growth and value that this deal brings to the shareholders of both companies."Mark Westgate, CFO of NexMed, concluded, "While we will probably not by profitable in 2010 because of significant one time charges due to the acquisition and ongoing cash expenses, we should be cash flow neutral to cash flow positive in 2010. As we follow the vision for revenue growth set out by the new management team, we are very optimistic about the immediate future and beyond 2010."

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