Covalon Licenses its Antimicrobial Silicone Adhesive Technology to Molnlycke

MISSISSAUGA, Ontario -- Covalon Technologies Ltd. (the "Company" or "Covalon") (TSXV: COV) an advanced medical technologies company, has licensed its antimicrobial silicone adhesive technology to Molnlycke Heath Care ("Molnlycke").

Under the license agreement, Covalon has granted Molnlycke the exclusive rights to exploit Covalons patent-pending antimicrobial silicone adhesive technology in the field of single-use surgical, wound care and vascular access medical dressings.

Covalon will receive $3.5 million in upfront license fees and additional ongoing minimum royalties, milestone payments and other fees. Covalon retains the rights to exploit the antimicrobial silicone adhesive technology in other fields and commercialize new life-saving products in its development pipeline while continuing to distribute its other products.

The parties simultaneously signed a supply and distribution agreement under which Covalon will provide to Molnlycke its United States Food and Drug Administration (FDA) cleared products, SurgiClear and IV Clear, for distribution under the Molnlycke brand.

Covalons antimicrobial silicone adhesive technology is the key component of IV Clear and SurgiClear, a transformative technology in the medical dressing market because it is extremely gentle on the skin and has powerful antimicrobial capabilities. IV Clear and SurgiClear have been clinically validated by leading clinicians in some of the largest and most well respected medical institutions in the United States, Canada and the Middle East as an important tool in the fight against healthcare acquired infections. Of the approximately $10 billion spent annually treating healthcare acquired infections in the United States, over half the cost is attributed to blood stream and surgical site infections - the two primary markets addressed by IV Clear and SurgiClear.

Brian Pedlar, Covalons Chief Executive Officer said, "We are delighted to sign a major agreement with Molnlycke, the best partner for Covalon to license its antimicrobial silicone adhesive to because of their domination of the silicone wound dressing market. Molnlyckes global reach and talented sales force will greatly expand the distribution of Covalons antimicrobial silicone adhesive technology in the surgical, wound care and vascular access markets. With some 7,400 staff across over 30 countries and over 1.7 billion medical dressings and surgical products made per year, Mol