German biopharma company makes move for long-suffering pain specialist, CeNeS - News - Life Sciences - Business Weekly

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German biopharma company makes move for long-suffering pain specialist, CeNeS

Written by News Desk
Thursday, 10 April 2008
German biopharmaceutical company, Paion AG, has tabled a £10.9 million bid for CeNeS Pharmaceuticals, the Cambridge central nervous (CNS) system specialist developing an alternative to morphine. Formed in 1997, CeNeS has endured a torrid 21st Century. As its share price plumeted at the beginning of the century, it dropped down from the main market to AIM. It then decided to hive off a number of what it described as non-core assets and shelved several development programmes to focus more attention on its morphine-replacement, M6G. It has been close to a virtual operation for some time. That drug was originally partnered with Irish pharma company, Elan, a joint venture terminated on what appeared to be favourable terms to CeNeS when Elan hit choppy water in 2002/2003. The trouble is, that nigh on five years after the compound entered Phase III trials, M6G still has not been cleared for market launch, or even attracted the attentions of a big-hitting marketing partner. That is not to say that there have not been a number of false dawns on the way, with projected launch dates consistently being moved forward. The company's shares have suffered accordingly. Since a 30:1 split in August 2007, CeNeS shares have lost just under two thirds of its value. In a statement, Paion and CeNeS said that they both hoped to benefit from the acquisition through a larger and more diversed drugs pipeline as well as a greater market visibility. Under the terms of the acquisition, CeNeS shareholders will receive 0.3521 new Paion shares for each CeNeS share held. The deal values each CeNeS share at 48.9p, a premium of 32.1 per cent on the last business day before the announcement. Announcement of the recommended offer to the London Stock Exchange sparked a surge of activity in CeNeS shares whose price rose over 12 per cent before settling at a more modest 38p a share, up 1.0 on the day, at time of publication. CeNeS and Paion said the enlarged group would have the financial and management resources to progress the development of the pipeline to maximise shareholder value. As at 31 December 2007, Paion and CeNeS together had approximately €49m (£40m) in cash and cash equivalents. Paion says it intends to retain the majority of CeNeS staff and will maintain CeNeS and Paion’s facilities in Cambridge and Aachen, Germany, respectively. CeNeS CSO, Gavin Kilpatrick will be appointed to the management board of Paion while founder and chairman, Alan Goodman will become a member of the supervisory board of Paion. “The combination creates a diversified pipeline backed by a strong balance sheet and a proven management team,” Neil Clark, CEO of CeNeS. “The enlarged group will be well-placed to achieve significant clinical and commercial milestones over the next 24 months.” Paion CEO, Dr Wolfgang Sohngen, said: “By combining the two companies, Paion is taking a first step towards creating a platform for building critical mass. If we manage to carry the positive attitude of all parties involved in getting to today’s agreement on into the integration process, we will have a chance to build a substantial biopharmaceutical company with an extraordinary profile. “With its combined strong development portfolio targeted at both cardiovascular and CNS-related conditions, I believe the enlarged group will be well-positioned to successfully implement its realigned strategy. The acquisition is subject to a number of conditions including the approval of CeNeS Shareholders and the sanction of the Court. Set as favorite Bookmark Email This Hits: 511 Trackback(0) TrackBack URI for this entry Comments (0) Subscribe to this comment's feed Show/Hide comments Write comment Show/Hide comment form This content has been locked. You can no longer post any comment.