Paladin to pay Isotechnika up to $2 million for diagnostic line profits

Paladin Labs Inc. (TSX:PLB) will pay up to $2 million to drug developer and partner Isotechnika Pharma Inc. (TSX:ISA) to gain a full share of future net profits from the Isodiagnostika line of diagnostic products.

Montreal-based Paladin said recently that it will make the payment over the next 12 months.

In a separate announcement, Isotechnika confirmed that it would receive a one-time payment of $1.65 million, with up to another $350,000 payable by Jan. 31, 2011, based on Isodiagnostika sales for this year.

Last May, Paladin launched an agreement with Edmonton-based Isotechnika Inc. to set up the new drug subsidiary, Isotechnika Pharma.  The agreement helped commercialise Isotechnika's main product, voclosporin, for use as a psoriasis treatment and for transplants.

Psoriasis is a chronic skin disease characterized by dry red patches covered with scales and usually appears in the scalp and ears.

"This amendment to the terms of our earlier agreement allows Isotechnika Pharma to continue its focus on the development of our voclosporin programs...as well as our NICAM portfolio project," said Isotechnika president and CEO Robert Foster.

"These programs will continue to drive the value of our company and this amendment with Paladin is a great source of immediate non-dilutive working capital," Foster said.

Isotechnika has developed NICAM, or non-immunosuppressive cyclosporine analogue molecules, with potent cyclophilin inhibition, which is considered a unique therapy for diseases like hepatitis C and neurological disorders like Parkinson's.

Paladin president and chief executive Jonathan Ross Goodman described the latest agreement as an opportunity for Paladin to expand the use of its treatments.  "Our experience with the Isodiagnostika business over the last several months suggests that (it) has untapped growth potential in Ontario and Quebec," he said in his release.