Harro/Bioprogress agreement

BioProgress, the March, UK-based provider of innovative delivery mechanisms for the pharmaceutical oral dosage markets, has formed an alliance with Harro Hoefliger, the German pharmaceutical production machine builder.

BioProgress has executed a letter of intent with Harro Hoefliger and the formal agreement is expected to be executed on or before October 31st 2003.

The agreement will provide for Harro Hoefliger to be the exclusive builder, supplier, servicer and warranty provider for all BioProgress Tabwrap, Swallow, Septum and Nrobe machines. BioProgress will receive a margin on all machines sales and a royalty on all revenues generated by Harro Hoefliger from the service activities.

Alan Holmes of Harro Hoefliger said: 'We have entered into the agreement with BioProgress because we believe the Xgel technologies offer tremendous potential for the sale of pharmaceutical machines in significant volume world-wide.

'Harro Hoefliger is experienced in designing, installing and maintaining pharmaceutical processes that deliver liquids, solids or powders reliably in high volume. We have examined the BioProgress designs and prototype machines in detail and we believe we can build and deliver the first generation versions of the Xgel technology. We also believe, by working closely with BioProgress using our experience, we can enhance and improve the performance of future versions of the machines even further. This is a very exciting opportunity.'

Graham Hind BioProgress ceo said: 'Harro Hoefliger is world class and well respected as machine and process suppliers to the pharmaceutical industry. Its engineering is of the highest quality.

'It is important for our customers that our machines are built by a company with a reputation for high quality build and installation but most importantly for service and back up support. Our appointment of Harro Hoefliger as our exclusive manufacturer is another important strategic alliance that will give our existing and new customers great confidence and give us a truly global capability in machine installation and service. Harro Hoefliger has satisfied us that it has the resources to meet the roll-out of upwards of fifty of our XGel systems at the pace necessary to meet our business goals. This is a key strategic alliance for BioProgress as, by working with Harro Hoefliger, we believe we can generate further machine revenues by future performance upgrades to installed machines. By increasing the speed and throughput on existing and future machines, we also anticipate film revenues to increase from the current machine average of around £1m per installed machine per year.'

Established twenty-five years ago, Harro Hoefliger is a pharmaceutical machine and production process supplier whose existing customer base includes 90% of the leading global pharmaceutical companies. It has a global network for machine supply, installation and servicing.