SAN DIEGO, Nov. 12 /PRNewswire-FirstCall/ -- Mera Pharmaceuticals, Inc (OTC Bulletin Board: MRPI) announced today that it has signed a Technical Services Agreement (TSA) to support the design, construction and operation of a large scale, GMP certified microalgae cultivation and processing facility on Hainan Island, China. The facility is being built by Hainan Sunshine Marine Bioengineering Co., Ltd. ("HSMBCo"), a Chinese Joint Venture Company. The first phase of the facility is anticipated to cost approximately $20,000,000 and is expected to commence operation late in the third quarter of 2003. The first phase of the Hainan facility will be 32 times larger than Mera's present facility in Kona, Hawaii. In addition, the plant has been planned for expansion to 128 times the size of the Kona facility.
HSMBCo will pay Mera approximately $1 million under the TSA over the next 12 months. It is anticipated that Mera will also obtain significant revenues over that period from the sale of proprietary equipment for use at the facility. Additional contracts are anticipate to be signed with regard to services and equipment sales after the first phase of the facility is in operation.
Richard D. Propper, MD, Mera's chairman and chief executive officer, finalized the TSA agreement during his trip to China last week. He commented on his return that "The completion of this agreement represents another major step forward for Mera. First and foremost, it assures that we will have the production capacity available to meet the rapid increase in retailer demand that we are experiencing for our first product, the AstaFactor(R). In addition, by concluding this agreement, HSMBCo signified its commitment to distribute the AstaFactor(R) in China, where it projects sales of several million bottles of the AstaFactor(R) annually. Mera will receive a royalty on each of those bottles sold in China. Mera expects an annual multi-million dollar income stream from these Chinese sales of the AstaFactor(R), which will be a meaningful addition to revenues from our growing domestic sales.
"The development of the Hainan facility is an integral part of Mera's intermediate term strategic plan. By shifting cultivation and processing to Hainan, we are able to devote our resources at the Kona production facility to research and development for the next generation of our pharmaceutical and nutraceutical products, accelerating their development and introduction. By increasing the number of highly skilled positions based in Hawaii, Mera will increase the advantages that Mera enjoys under Hawaiian tax law."
Mera Pharmaceuticals, Inc., based in Kona, Hawaii, is a drug discovery and nutraceutical company with a focus on identifying and producing valuable products from the rich, untapped resource of microbial aquatic plants. Long recognized for their potential medical and nutritional value, these plants have been largely ignored because of the extreme difficulty of growing them at commercial scale. Mera has overcome that obstacle through application of its patented photobioreactor technology, which enables Mera to produce a large number of algal species at scale reliably, efficiently and at high quality. Mera's first nutraceutical product, the AstaFactor(R), is a concentrated source of natural astaxanthin, a key nutritional component of wild salmon. Astaxanthin is an extremely powerful antioxidant and a highly effective anti- inflammatory.
This press release contains forward-looking statements characterized by the use of words such as "believe," "expect," "anticipate," "feel" and similar expressions. Actual results might differ materially from those projected in, expressed in or implied by the forward-looking statements. The kinds of risks and uncertainties that could affect the future operating results of Mera include, without limitation: (i) the ability to attract new business for its existing products; (ii) the ability to identify new products and bring them to market; (iii) the ability to identify promising pharmaceutical candidates and, if they are identified, the ability to have them successfully complete the clinical trial process; (iv) the sensitivity of Mera to general economic conditions; (v) the inability to attract the additional investment needed to plans regarding the drug discovery and development business. Additional information concerning risk factors that could cause actual results to differ materially from those described in forward looking statements can be found in Mera's SEC filings, including its Annual Report on Form 10-KSB and other periodic reports that it files under the Securities Exchange Act of 1934, as amended.