Sigma opt for negotiation with Chemist Warehouse
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July 26, 2017

Sigma has dropped its legal action against the Chemist Warehouse Group (CWH) over an exclusivity agreement.

The two groups have instead started formal negotiations in a bid to settle their dispute over a plan by CWH to source Sandoz generics from another supplier.

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The move provided respite for Sigma’s share price, which jumped nearly 10% to reach just under 0.94 cents at the close of trading on Wednesday.

It had plummeted from around $1.20 to a low of under 80 cents when the legal battle was launched.

If a commercial resolution is not reached, the two groups have agreed to “confidential and binding” mediation and arbitration, Sigma said in an ASX announcement.

“As a result of these developments, Sigma will now discontinue legal proceedings.”

“Sigma values the long-term relationship with [My Chemist/ Chemist Warehouse] and continues to provide operational support in accordance with the terms of the current supply agreement which runs to June 2019.”

The case was set to start in the Victorian Supreme Court on 24 October.

There were signs Sigma and Chemist Warehouse were attempting to resolve their differences with the latter failing to file a defence by the 14 June deadline set by the court.


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