Covalon Technologies Ltd.

Covalon Technologies Ltd.
Smith & Nephew Advanced Wound Management

March 27, 2007 07:00 ET

Covalon Discloses Details of Deal with Smith & Nephew

MISSISSAUGA, ONTARIO--(CCNMatthews - March 26, 2007) - Under the terms of the agreement announced March 19, 2007 between Covalon Technologies Ltd. (the "Corporation" or "Covalon") (TSX VENTURE:COV) and Smith & Nephew (NYSE:SNN)(LSE:SN), the major financial component will be sales of product to Smith & Nephew for worldwide distribution. The value will vary depending on the commercial conditions in the markets in which Smith & Nephew will promote the products. It is expected to have a total minimum of milestone payments of US$5 million over the term. In addition to sales, Covalon received an up-front exclusivity payment of US$2 Million.

Smith & Nephew is dedicated to helping improve people's lives. The company prides itself on the strength of its relationships with its surgeons and professional healthcare customers, with whom its name is synonymous with high standards of performance, innovation and trust. The company has over 8,500 employees and operates in 33 countries around the world generating annual sales in excess of $2.6 billion.

Covalon Technologies Ltd. is a developer of advanced medical products which has patented therapeutic biomaterials for wound care and surgical applications, and coatings for medical devices. Polymer chemistry and surface coating technology have been combined to create a range of time-release drug delivery platforms that can be applied to many medical devices. A variety of applications for this technology have been identified and specific products have been developed. These products feature solutions to many of the problems caused by the material properties of the medical devices currently offered by most manufacturers and suppliers.

This news release contains forward-looking statements which reflect the Corporation's current expectations regarding future events. The forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan, "estimate", "expect", "intend" and statements that an event or result "may", "will", "should", "could" or "might" occur or be achieved and other similar expressions. These forward-looking statements involve risk and uncertainties, including the difficulty in predicting product approvals, acceptance of and demands for new products, the impact of the products and pricing strategies of competitors, delays in developing and launching new products, the regulatory environment, fluctuations in operating results and other risks, any of which could cause results, performance, or achievements to differ materially from the results discussed or implied in the forward-looking statements. Many risks are inherent in the industry; others are more specific to the Corporation. Investors should consult Covalon's ongoing quarterly filings for additional information on risks and uncertainties relating to these forward-looking statements. Investors should not place undue reliance on any forward-looking statements. Management assumes no obligation to update or alter any forward-looking statements whether as a result of new information, further events or otherwise.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved of the contents of this release.

Contact Information