27 May 2020

Arthritis company Promisia pivots into aged care sector

2:36 pm on 27 May 2020

Medical company Promisia Integrative hopes to turn its core business to the aged care sector, pitching the acquisition of three facilities in the North Island and leasing a fourth in the South Island.

Medsafe issued a warning about potential risk of harm to the liver for users of Arthrem.

Promisia Integrative produces Arthrem - an arthritis medicine. Photo: Arthrem

In a letter to shareholders, chairman Stephen Underwood said there was no viable future in its current listed activity - producing the arthritis medication Arthrem.

"Shareholders will be well aware of the regulatory difficulties that have placed the future of PIL [Promisia] at risk. In particular, the regulatory actions taken by Medsafe in relation to Arthrem have severely impacted sales and jeopardised the ability for the business to operate."

"The Board has been exploring new opportunities to leverage the listing of PIL and introduce a profitable business that is resilient and scalable... The intention is to complete this transaction and cease operating in the natural remedy business."

The letter also said the Board would consider a rebrand to reflect the change.

Promisia was recently charged on breaches of the Medicines Act which the Board said had jeopardised the businesses ability to operate.

It planned to contest the charges but said the Arthrem brand had already been damaged.

"It is the view of the PIL directors that there is little, if any, viable future in continuing with the current business activities."

Promisia's director and largest shareholder, Thomas Brankin, would sell it the companies that owned the three North Island aged care facilities, as well as the company that held a long-term lease for a property in Christchurch that PIL planned on turning into a care facility.

The centres are Ranfurly Residential Care Centre and Nelson Residential Care Centre in Feilding, Eileen Mary Residential Care Centre in Dannevirke and the fourth property to be developed was at 62 Aldwins Road in Christchurch.

The aggregate purchase price is $31.4 million, paid for by a share issue to Thomas Brankin (Brankin Family Trust), bank debt and a share issue to wholesale investors.

Shareholders would vote on the proposals next month.