6th Jul 2005 07:00
Vernalis PLC06 July 2005 6 July 2005 Vernalis to acquire the privately held UK biotech company Ionix Pharmaceuticals - Adds promising development stage pain programme IX-1003 - Vernalis plc (LSE: VER, NASDAQ: VNLS) announced today that it has entered intoan agreement to acquire the privately held UK company Ionix PharmaceuticalsLimited in a share-based transaction valuing Ionix at approximately £12.5million. Completion of the transaction, which is not subject to approval byVernalis' shareholders, is expected before the end of July. Ionix's principal asset is IX-1003, a proprietary intranasal formulation ofbuprenorphine for acute post-operative pain. Buprenorphine is a well knownopiate analgesic and the intranasal formulation is being developed to providerapid pain relief whilst potentially reducing some side effects associated withopiates. The IX-1003 programme, which has completed phase I testing and isexpected to commence phase II testing in 2H 2005, is partnered with ReckittBenckiser Healthcare who will pay the development costs for this clinical study. Ionix retained an option to co-promote IX-1003 in the US and will receivemilestones and royalties through the development and commercialisation of theproduct. Should Vernalis exercise the Ionix option to co-promote IX-1003 at theend of the phase II trial, it will contribute to a proportion of the costs forfuture development and commercialisation in return for a share of profits. Reckitt Benckiser also partner with Ionix on two pre-clinical programmes,IX-1004 for the treatment of chronic pain and IX-1005 for the treatment ofopiate addiction. All three product candidates are based upon proprietaryintranasal formulation technology for the delivery of buprenorphine, which ismanufactured and marketed globally by Reckitt Benckiser and its licensees inother dosage forms. Ionix also has proprietary technology and intellectual property in the field ofion channel drug discovery, which Vernalis will continue to investigate. Commenting on the transaction, Simon Sturge, CEO of Vernalis, said, "Ionix is agood strategic fit and adds a clinical programme that has the potential toprovide a convenient alternative to other opiate analgesics currently on themarket. It gives Vernalis an additional programme with co-promotion rights forour emerging sales and marketing infrastructure in the US. We look forward toco-promoting these products as we continue on our path to become a sustainable,self-funding, R&D-driven biotechnology company." Transaction details In consideration for Vernalis acquiring the entire issued share capital ofIonix, Vernalis will issue to Ionix's shareholders 19,685,040 ordinary shares,representing approximately 9% of the enlarged issued share capital of Vernalisand valuing Ionix at £12.5 million. Of the 19,685,040 million shares,17,847,769 million (90%) will be issued on completion of the transaction withthe remaining shares being issued in July 2006, subject to reduction for anywarranty or indemnity claims. A cash payment of £5 million will be paid to existing Ionix shareholders on thereceipt of the first marketing authorisation for IX-1003, subject to reductionfor any warranty or indemnity claims. As a result of the transaction, Funds advised by Apax Partners, Ionix's leadinvestor, will initially receive 15,245,564 of new Vernalis ordinary shareswhich will bring their holding in Vernalis to 27,389,243 ordinary shares,representing 12.6% of the enlarged issued share capital of Vernalis. Ionix will be restructured prior to completion of the acquisition. Its existingpremises on the Cambridge Science Park will be returned to the Landlord oncompletion of this transaction and Ionix staff will be made redundant, with theexception of six employees who will be retained by Vernalis to progress thenewly acquired R&D programmes. Ionix will be acquired by Vernalis with no cashor liabilities, including any liabilities in respect of the property andredundancy programme. The unaudited gross assets of Ionix at 31 December 2004were £7.0 million and the unaudited loss for the 12 months to 31 December 2004was £7.7 million. The net assets of Ionix to be acquired by Vernalis followingthe restructuring are estimated to be £0.9 million. The enlarged Vernalis will have a robust financial position, a marketed migrainetreatment, frovatriptan, and a pipeline of product candidates comprising sixclinical-stage products including a phase III programme for frovatriptan inmenstrually related migraine patients; a phase II programme with V10153, andfour phase I programmes. Vernalis expects progress during 2005 to include theinitiation of three phase II studies, V10153 in acute ischaemic stroke, IX-1003in acute post-operative pain and V2006 in Parkinson's disease, as well asregulatory submission of frovatriptan for menstrually related migraine in thefirst half of 2006. - ends - Enquiries: Vernalis plc +44 (0) 118 977 3133Simon Sturge, Chief ExecutiveTony Weir, Chief Financial OfficerJulia Wilson, Head of Corporate Communications Brunswick Group +44 (0) 20 7404 5959Jon ColesWendel Verbeek Notes for Editors: About Vernalis Vernalis is a UK-based biotechnology company with a marketed migraine product,frovatriptan, and a development pipeline focused on central nervous systemdisorders and oncology. The company has five products in clinical developmentand collaborations with leading, global pharmaceutical companies includingNovartis, Biogen Idec and Serono. Vernalis is establishing a US commercialoperation to co-promote frovatriptan alongside its North American licensingpartner, Endo Pharmaceuticals, propelling the company towards its goal ofbecoming a sustainable, self-funding, R&D-driven biotechnology company. Forfurther information about Vernalis, please visit www.vernalis.com About Ionix Ionix Pharmaceuticals, based in Cambridge UK, is a specialist in the discoveryand development of new analgesic medicines for the treatment of acute andchronic pain. Combining novel drug delivery systems, proprietary drug targetsand state-of-the-art chemistry, the company is developing medicines that aredesigned to alleviate pain associated with trauma, operative procedures, anddebilitating diseases such as arthritis, diabetes and multiple sclerosis. IonixPharmaceuticals is a privately held company and was founded in 2001. Forfurther information about Ionix, please visit www.ionixpharma.com Safe Harbour statement: this news release may contain forward-looking statementsthat reflect the Company's current expectations regarding future events.Forward-looking statements involve risks and uncertainties. Actual events coulddiffer materially from those projected herein and depend on a number of factorsincluding the success of the Company's research strategies, the applicability ofthe discoveries made therein, the successful and timely completion of clinicalstudies, the uncertainties related to the regulatory process, the successfulintegration of completed mergers and acquisitions and achievement of expectedsynergies from such transactions, and the ability of the Company to identify andconsummate suitable strategic and business combination transactions. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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