Columbia Laboratories retires all debt

Columbia Laboratories has closed the sale of its progesterone-related assets and 11.2m shares of common stock to Watson Pharmaceuticals and is debt-free, the company has announced. Columbia now has over $25m in cash and approximately 84 million common shares outstanding.

The company received $47m in cash from Watson; Watson also forgave the interest on a $15m loan it had given Columbia on June 1, 2010. Columbia used approximately $16m of the initial proceeds to pre-pay the balance of the minimum royalty payments due in November 2010 to PharmaBio Development, and $26m, together with stock and warrants, to pre-pay the entire balance of the $40m in convertible notes due by December 31, 2011.

Becoming debt-free has improved the company's outlook significantly, according to Frank C Condella, Jr, president and chief executive officer of Columbia. 

"In the near term, Columbia will focus on the smooth transfer of domestic commercial operations for Crinone 8 per cent (progesterone gel) to Watson, completing the PREGNANT study of Prochieve 8 per cent (progesterone gel), and developing with Watson the next generation progesterone product," he said in a statement. 

The PREGNANT study is a randomised, double-blind, placebo controlled phase III trial to evaluate the safety and efficacy of Prochieve to reduce the risk of preterm birth in women with a cervical length between 1.0cm and 2.0cm as measured by transvaginal ultrasound at mid-pregnancy. 

Columbia's business now consists of its royalty and manufacturing revenues, potential milestone payments, its collaboration with Watson on the development of next-generation progesterone products and its novel bioadhesive drug delivery technologies and other products. Columbia retains all rights necessary to perform its obligations under its agreement with Merck Serono, which relates to sales of Crinone (progesterone gel) outside the US.