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pounds 1.6m to firm for breach in agreement; Boost for health care group.

Byline: DAVID JONES

DEESIDE-based health care group Provalis has been awarded pounds 1.6min compensation and costs after a Canadian pharmaceuticals company ended a distribution agreement.

The group said the arbitration it started against Dimethaid International Inc following the North American company's termination of the Pennsaid distribution agreement had been decided in Provalis' favour.

As a result the Welsh firm, which is based on Deeside Industrial Park, said it had been awarded the compensatory sum of just over pounds 1.2m, together with costs and interest of about pounds 360,000.

Provalis chief executive Dr Phil Gould said ``I am very pleased with the outcome of the arbitration and that this matter has now been brought to a close.

``This award will reinforce our cash position and assist the development of the group.''

Provalis is a diversified health care company with two operating businesses, Medical Diagnostics and Pharmaceuticals.

Medical Diagnostics develops and sells to world markets medical diagnostic products for chronic disease management, while Pharmaceuticals sells and markets its own and third party branded,prescription medicines to GPs and hospitals in the UK and Ireland through its own sales force.

A licensing agreement under which Provalis Healthcare was appointed to distribute the osteoarthritis treatment Pennsaid in the UK was signed by the health care division and Dimethaid International in January, 2001.

Provalis paid Dimethaid an undisclosed fee to secure exclusive distribution rights for the product, which is manufactured by Dimethaid in Quebec.

Last year Dimethaid announced in Toronto that it had terminated the distribution agreement with Provalis.

Provalis said it had not been consulted over the move and subsequently commenced arbitration proceedings against the Canadian business for what it said was the unilateral tearing up of the agreement.

The North Wales business admitted in June, 2002, that initial sales of Pennsaid had been disappointing but claimed that over the 10 years covered by the agreement sales would have built up.

The arbitration hearing was held in October.
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Title Annotation:Business
Publication:Daily Post (Liverpool, England)
Date:Dec 17, 2003
Words:327
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