Business Weekly - Cambridge, UK

French pharmaceutical, Ipsen S.A. has come in for Vernalis’ US operations, sealing the lid on the Cambridge biopharmaceutical’s North American venture.

Worth up to £9 million and including Vernalis’ treatment for Parkinson’s Disease, Apokyn, the deal should provide the firm with a two-year cash runway for its research intensive business together with existing resources.

Vernalis has been looking to offload its US functions since the FDA declined to approve the firm’s treatment for the short-term prevention of menstrual migraine, frovatriptan, and in one stroke ended its ambition of becoming a sustainable, self-funding, R & D-driven, speciality pharmaceutical company.

Instead Vernalis is concentrating all its research and development efforts in Cambridge where it can focus on progressing a number of other pharmaceutical products.

Vernalis executive chairman, Peter Fellner, said a successful sale would substantially complete the restructuring of the company, placing it in a strong financial position compared with other British listed biotechs.

“Vernalis has six promising products in clinical development and collaborations with Novartis, Biogen Idec and Servier among others,” he added. “We look forward to rebuilding significant shareholder value in the mid-term through progression of our promising R & D pipeline.”


The $17.5m (£9.0m) sale will be split three ways, an initial cash consideration of $6.5m, a further milestone consideration of up to $6.0m and a $5.0m equity stake by Ipsen in Vernalis at a subscription price per ordinary share of 7.26p, representing a 20 per cent premium to the average closing price on the previous three trading days.

Vernalis expects the aggregate net proceeds of the sale and subscription to be around £4.8m, which together with existing cash resources of £11.7m and the net proceeds from the £14.7m Paul Capital Healthcare financing, should provide the company with over £31m.

This will be split around 60-40 between R & D and working capital respectively. The sale and subscription are conditional on shareholder approval and are expected to complete on 1 July 2008.