Invest in Finland

Covalent Group, Inc. and Remedium Oy agree to combine operations

03/04/2006

At the beginning of March, the Covalent Group, Inc., a leader in the design and management of complex clinical trials and patient disease registries for the pharmaceutical, biotechnology and medical-device industries, announced that it has entered into a definitive combination agreement with Remedium Oy, a privately-held, full-service clinical research organization (CRO) based in Finland. According to a statement, the terms of the agreement have been approved by the boards of directors of both companies and the Remedium’s shareholders, and Covalent expects to pay USD 20 million for all outstanding shares and common stock equivalents in Remedium. Subject to certain contingencies, closing of the transaction is expected to occur at the end of June 2006.

According to Covalent, after the deal is closed, the combined company will be called Encorium BioSolutions Inc. and a listing on the Nasdaq Small Cap market is expected. In its statement, the Covalent Group also said it believes that the combination represents an important growth opportunity for both Covalent and Remedium and significant workforce reductions as a result of the merger are not anticipated.

“Access to approximately 180 million people”

Commenting on the announcement, Kenneth M. Borow MD, the Covalent Group’s President and CEO, said “We believe that this transaction represents a breakthrough event in Covalent’s history. Previously, new business contracts of significant size and scope had been difficult to win when Covalent and Remedium were operating as stand-alone companies. The combined company will be able to compete for a broader range of global and regional new business contracts by virtue of its increased size, expanded geographic footprint, and depth of resources. In addition, this combination will provide Covalent with a global platform from which to further expand our highly respected position as a consulting company focused on value-added intellectual input, innovative drug development planning and design, and exceptional clinical trial execution.”

Commenting on geographical aspects of the merger, Dr Borow said “Remedium’s operations cover countries that provide access to approximately 180 million people. This will have a positive impact on our ability to identify appropriate study sites in Europe and Scandinavia and allow us to recruit for various clinical trials in a timely and cost-effective manner.”

“Well positioned to provide timely and cost-efficient solutions”

Kai Lindevall, MD, PhD, Remedium’s President and CEO, said “Covalent has a proven management team, a full range of clinical trial capabilities and expertise, and an impressive track record of programmatic successes. Its consulting services, an important distinguishing feature, provide an integrated scientific and operational approach to the successful development of drugs and biologics. The new company will be well positioned to provide timely and cost-efficient solutions to the biopharmaceutical industry utilising our extensive clinical research capabilities in Scandinavia, central and eastern Europe. In addition, Covalent will provide Remedium’s current clients with expanded access to clinical trial resources in the Americas and western Europe. I believe that the excellent track record of the combined entity in the areas of advanced cardiovascular disease as well as infectious diseases and vaccines will form a firm foundation for Encorium to become a leading global service provider to the biopharmaceutical and medical device industries.”

Founded in 1996, Remedium is a full-service CRO for the Phase I-IV clinical development of drugs and biologics in the pharmaceutical and biotechnology industries. The company’s in-house staff consists of 11 physicians, clinical and data management teams, and an early development team that specializes in fast-tracking Phase I and Phase II studies. Remedium has offices in eight countries throughout Scandinavia and central and eastern Europe and has completed more than 160 clinical research projects involving over 45,000 subjects.

Covalent Group, Inc. is a leading CRO in the design and management of complex clinical trials and patient disease registries for the pharmaceutical, biotechnology and medical device industries. Covalent has drug and biologics development as well as clinical-trial experience across a wide variety of therapeutic areas such as cardiovascular, endocrinology/metabolism, diabetes, vaccines, infectious diseases, gene therapy, immunology, neurology, oncology, gastroenterology, dermatology, hepatology, women’s health and respiratory medicine.

Further information:

http://www.covalentgroup.com/news/encorium4Ma42006.htm

http://www.remedium.com/en/index.html