Palla Pharma Limited has settled all outstanding legal issues with its large API customer, M&A Pharmachem, and together have entered into a long-term production partnership. The production partnership involves Marketing Authorisation Licences, Contract Manufacturing and API Supply agreements which together have the effect of securing Palla Pharma both access to significant manufacturing capacity at M&A's UK facility (at a minimum, capacity equivalent to 25% of the Company's Norwegian facility capacity), further enhancing Palla Pharma's ability to service customers in the world's large codeine-based pain management market, and significant long term API sales volumes (at a minimum, 4 metric tonnes per annum). Importantly, the production partnership enhances Palla Pharma's ability to reliably supply the UK market with significant product volumes from two geographically separate sources of manufacture and allows the Company to progress its plans to enter the European market with the knowledge that it will be able to assure European customers access to significant product volumes. Palla Pharma anticipates being able to access product produced under the production partnership in third quarter based upon receipt of all necessary regulatory approvals in accordance with normal approval timelines. The registration, validation, and approval processes for the other 5 Marketing Authorisations owned by Palla Pharma are on-going and updates will be provided in due course.