Today’s announcement of extending the strategic collaboration with Sartorius Stedim Biotech (SSB) is another example of how ProMetic Life Sciences (PLI) is building value by using its collaborative model to minimise dilution for shareholders. PLI entered into collaboration with SSB in 2006 and subsequent technology transfer deals had already established SSB as the preferred supplier of filtration equipment and consumables for PLI’s PPPSTM licensees. What is new today is that SSB has agreed to contribute equipment and consumables to PLI’s own PPPSTM plant in Laval, Canada which will also be the technical showroom for PPPSTM. We estimate the financial benefit to PLI from this contribution alone to be at least $10m over the next three years.
In addition, the two parties have also agreed to co-market PPPSTM on a global basis, allowing PLI to leverage SSB’s global sales and distribution network. With 2012 sales of €544m and a market capitalisation of €1.5bn, SSB is one of the world's largest suppliers of laboratory and process technologies and equipment, with production facilities in Europe, Asia and America. It has sales offices and local representatives in more than 110 countries. It is too early to estimate the value of this agreement but it could be significant.
*  Stronger balance sheet
PLI ended the financial year 2012 with a pro-forma cash and cash equivalent of C$11.2m, thanks to a C$10m equity investment by Shenzhen Hepalink. A part of these proceeds was originally earmarked for operational launch of PLI’s plasma facility. However, the extension of agreement with SSB has freed up some capital for other uses.
It is easy to under-estimate the significance of events announced today. Competition for capital remains tough and companies like PLI which can raise funds from alternative sources that cost little and even enhance the scope of the business are best placed to deliver shareholder value.
*   Laval facility on target
The launch of plasma production in Laval, Quebec is on schedule. The first batches of the bulk active GMP output in 2014 is expected to be used for an orphan drug for the treatment of hypoplasminogenemia, or type I plasminogen deficiency (T1PD). We are forecasting this facility to generate sales of C$7m in 2014, rising to C$20m in 2015. At full capacity, we expect this facility to generate annual revenues of at least C$150m.
The benefits of plasma-derived products in treating rare diseases are well documented. What is, perhaps, less known is the yield advantage of PLI’s proprietary PPPSTM platform of 40% to 170% over current manufacturing processes. With SSB as a partner, we expect more potential customers to convert.