Announces Significant Cost Reductions
posted on May 04, 2009 04:02AM
Advanced Medical Biosystems
|May 4, 2009|
Covalon Announces Significant Cost Reductions
- Recently announced strategic alliance will permit Amsino International to co-market and manufacture Covalon technologies
|MISSISSAUGA, ONTARIO--(Marketwire - May 4, 2009) - Covalon Technologies Ltd. (TSX VENTURE:COV) has announced that it has decided to significantly reduce its expenses as a result of its recently announced strategic alliance with Amsino International Inc.
Dr. Frank DiCosmo, President, CEO and co-founder noted, "Our strategic alliance contemplates Covalon utilizing Amsino's vast manufacturing facilities thus saving Covalon the capital cost of building its own facilities. Furthermore, given the large volume of high-quality medical products Amsino currently manufactures for some of the world's largest healthcare companies, they will be able to achieve lower costs than Covalon could have hoped to provide."
Staff at Covalon has been reduced from 41 individuals to a complement of 28. The Company estimates annual financial savings of almost $900,000 in direct costs. The Company estimates related severance costs to be $95,000.
William Jackson, Covalon's Chief Business Officer and co-founder said, "What excites me most is that Covalon now gets to focus almost exclusively on ensuring that every company in the medical industry becomes aware of the innovations our incredibly talented scientists have developed. We are in an excellent position to help virtually any medical company increase its sales by introducing innovative new products".
Mr. Peter Hobbes, Covalon's Chief Financial Officer said, "These changes will allow the Company to reduce its committed cost base and further preserve our cash position of $ 8.4 million. With our Amsino relationship and a leaner operation, I am confident about the Company's ability to capitalize on its broad technology base.
Included in the changes is the termination of the Company's contract with D. Bamforth Consulting Inc. for investor relations services, effective April 27, 2009.
Covalon Technologies Ltd. is an advanced medical products company that has developed, patented and commercialized therapeutic biomaterials for wound care and surgical applications and coatings. Polymer chemistry and surface coating technology have been combined to create a range of time-release drug delivery platforms that are applied to medical devices to treat many critical conditions. A variety of applications for these technologies have been identified and specific products have been developed. The products offer features and benefits providing solutions to many of the problems caused by current devices and their material properties which are used by most medical device manufacturers and suppliers. The problems include infection, poor biocompatibility, and microbial attachment.