Item
2.01 - Completion of Acquisition or Disposition of
Assets.
BioSpecifics
Technologies Corp. (“BTC”) and Advance Biofactures Corporation (“ABC”), a direct
wholly-owned subsidiary of BTC, entered into an asset purchase agreement (the
“Asset Purchase Agreement”) with DFB Biotech, Inc. (“DFB Biotech”), dated as of
March 3, 2006, for the sale by BTC and ABC, and the purchase by DFB Biotech,
of
certain assets owned by BTC and ABC relating to their topical collagenase
business. DFB Biotech delivered the $8,000,000 cash purchase price, and BTC,
ABC
and DFB Biotech finalized the sale, on March 6, 2006.
At
the
Closing, DFB Biotech acquired all of the issued and outstanding shares of
Advance Biofactures of Curaçao N.V., a direct wholly-owned subsidiary of BTC
(“ABCuraçao”) organized under the laws of the Netherlands Antilles. ABCuraçao
manufactures a fermentation derived enzyme called Collagenase ABC, the principal
component of the collagenase ointment (used for debriding chronic dermal ulcers
and severely burned areas) manufactured by BTC and marketed by Abbott
Laboratories Inc. under the registered trademark SANTYL®.
In
addition, at the closing, DFB Biotech, through its affiliate DPT Lakewood Inc.
(“DPT Lakewood”), (i) acquired from ABC certain inventory and manufacturing
equipment used in the topical collagenase business, (ii) was granted a perpetual
royalty free license to use, solely in connection with the topical collagenase
business, certain intangible assets retained by ABC, and (iii) was granted
the
right (for a limited period of time) to use, solely in connection with the
topical collagenase business, certain tangible assets retained by ABC.
As
consideration for the purchased assets BTC and ABC received $8,000,000 in cash,
DFB Biotech’s assumption of certain liabilities, and the right to receive earn
out payments in the future based on sales of certain products. In connection
with the Closing of the Asset Purchase Agreement, ABC agreed to provide certain
technical assistance and certain transition services to DPT Lakewood in
consideration of fees and costs totaling over $1.4 million. At the Closing,
DFB
Biotech paid to ABC a partial payment of $400,000 in respect of the technical
assistance to be provided by ABC.
The
Asset
Purchase Agreement also contains other customary representations and warranties,
covenants, and indemnification provisions.
The
Closing was subject to customary closing conditions including the entry into
certain other ancillary agreements that were mutually acceptable by the
parties.
Following
the sale, BTC and ABC continue to own material assets relating to their
injectible collagenase business. BTC plans to continue to develop injectible
collagenase products for the treatment of Dupuytren’s disease, Peyronie’s
disease, Frozen Shoulder and other clinical indications, through ABC and in
conjunction with Auxilium Pharmaceuticals, Inc. (“Auxilium”), pursuant to a
Development and License Agreement, dated June 3, 2004, between BTC and Auxilium,
as amended.