William Ransom & Son that the marketing and distribution agreement for Glucomed (local brand name Alateris) will be terminated with effect from 1 November 2008.
Navamedic has agreed with its UK partner William Ransom & Son that the marketing and distribution agreement for Glucomed (local brand name Alateris) will be terminated with effect from 1 November 2008. The decision results from the sales performance in the UK to date, and Ransom's incapability to fulfil its obligations towards Navamedic due to financial constraints.
In August, September and October, Ransom will continue to market the product with the current sales force at its own cost, while Navamedic will receive all sales revenues in the period. Navamedic will also take over Ransom's purchased stock of Alateris at zero cost.
From 1 November, Navamedic will take over the marketing and distribution in the UK through a local contract sales force. Navamedic will also consider appointing a new marketing and distribution partner for Alateris in the UK.
-The UK market for glucosamine products represents a very large potential, but the performance in the UK has not been satisfying so far. This change gives us the possibility to evaluate the market in more dept and thereafter make the right steps to take a larger share of this interesting market, says CEO Øyvind Brekke in Navamedic ASA.
The UK market for glucosamine products has an annual value of approx. GBP 80 million. Navamedic's Alateris is the first glucosamine product approved as a medicinal product in the UK. The product is sold on prescription with reimbursement and competes with food supplement glucosamine products sold on prescription, over-the counter in pharmacies, in supermarkets and other retail channels. The prescription market for glucosamine products currently represents approximately 10% of the total market value, with 700-800.000 annual prescriptions.
The termination has a positive P&L effect of approx. NOK 6 million in Q3, as the remaining provisions related to the received license income will be stated as income. For the three months ending 31 October, Navamedic will have revenues from products sold to wholesalers in the UK with no related costs. From 1 November Navamedic will have revenues from product sales, and will carry costs related to the contract sales force, logistics, marketing etc, if a new marketing and distribution partner is not appointed.