SUMM.L Regulatory News (SUMM)

22 Mar 2007 07:04

VASTox plc22 March 2007 VASTox plc will present further details of the acquisitions announced below andits strategy going forward at a meeting for analysts to be held at 09.30hrs on22 March 2007 at the offices of Citigate Dewe Rogerson, 3rd Floor, 3 London WallBuildings, London Wall, London EC2M 5SY. Please contact Mark Swallow, ValerieAuffray or Janine Hagan on 020 7638 9571 for further information. VASTox plc ("VASTox" or "the Company") VASTox plc ACQUIRES DANIOLABS LTD AND DEXTRA LABORATORIES LTD TO STRENGTHEN ITS DRUG DISCOVERY PIPELINE AND PHARMACEUTICAL SERVICES BUSINESS • Enhances drug pipeline through the addition of two clinical and twopre-clinical programmes in neurological and ophthalmic diseases • World dominance in two drug discovery technology platforms: chemicalgenomics and carbohydrate chemistry • Immediate increase in revenue generation from expanded and enhanceddrug discovery service business Oxford, UK, 22 March 2007 - VASTox plc (AIM: VOX) announced today that it hascompleted the simultaneous acquisition of DanioLabs Ltd ("DanioLabs"), a privateUK drug discovery company, and Dextra Laboratories Ltd ("Dextra"), a specialistcarbohydrate chemistry service company. These deals represent an important strategic step for VASTox as they strengthenand diversify its drug discovery and development pipeline through the additionof two clinical and two pre-clinical programmes in neurological and ophthalmicdiseases, which will provide increased near-term opportunities for high-valuelicensing and partnership deals; enhance its scientific expertise andcapabilities in zebrafish chemical genomics and carbohydrate chemistry; andboost its scientific infrastructure through the acquisition of two high-techlaboratory facilities in Cambridge and Reading. These technology platforms arecrucial to VASTox's ability to create value as they underpin its internal drugdiscovery and development programmes as well as forming a basis for the enhancedgrowth of its profitable pharmaceutical services business. In addition, the strengthened technology platforms will immediately increase therevenues generated by the service business and also offers the potential for anincrease in number of higher-value collaboration deals with its now enlargedclient base. Daniolabs (Cambridge, UK) has been acquired for £15 million payable through theissue of 11,732,361 new 10p ordinary shares and cash of £159,000 to DanioLabs'existing shareholders based on a VASTox share price of 126.5p, calculated as anaverage share price over a ten-day period ending 20 March 2007, the lastbusiness day before the deal was concluded. Of the consideration shares,1,173,233 shares will deferred and issued in one year's time provided there areno warranty claims during the intervening period. At 31 July 2006 DanioLabsrecorded net assets of £2.74m and a loss on operating activities before taxationof £2.76m. The CEO and CFO of DanioLabs will step down with immediate effect. VASTox willretain Daniolabs' scientific research facility in Cambridge and all 37 remainingstaff will take up new positions within the enlarged Group. In addition, Dr Andrew Richards, a Non-Executive Director of Daniolabs since itsinception, will be appointed as a Non-Executive Director of VASTox. See Notes toEditors for biography. Dextra Laboratories (Reading, UK) has been acquired for £1.5 million, payablethrough the issue of 1,185,771 new 10p ordinary shares to Dextra's existingshareholders, based on a VASTox share price of 126.5p, calculated as an averageshare price over a ten-day period ending 20 March 2007, the last business daybefore the deal was concluded. On 30 September 2006 Dextra recorded net assetsof £0.17m and a profit on operating activities before taxation of £0.07m. VASTox will retain Dextra's state-of-the-art chemistry facility in Reading withall 17 Dextra employees becoming employees of the enlarged VASTox. The acquisitions are expected to complete by 28 March 2007 when the shares willbe admitted to AIM. Following the completion of both these transactions, a totalof 48,961,965 ordinary shares will be in issue. Commenting on both deals, VASTox's CEO Steve Lee, PhD said: "The acquisitions ofDanioLabs and Dextra represent a transforming development for VASTox. Thesuccessful completion of these two deals will add significant value to VASTox'sbusiness with important clinical and pre-clinical additions to our drug pipelineand a strengthening of our drug discovery and development technology platforms. "Following these transactions, plus the earlier deal with MNL Pharma in December2006, VASTox now has a broad drug discovery pipeline with programmes in clinicaland discovery phases of development targeting neuro-disorders, cancer,ophthalmology, infectious diseases and regenerative medicine. In addition, theCompany has established itself as the dominant global player in the areas ofchemical genomics and carbohydrate chemistry, both of which are increasinglybeing recognised by pharmaceutical and biotechnology companies as valuable andeffective technologies for the drug discovery and development process. "Today's announcement further highlights the ambitions we have for the future ofVASTox and we are confident the enlarged company has now reached a positionwhere it will be able to create substantial value for all our shareholders." Further Information An Enhanced Drug Discovery Pipeline The acquisition of DanioLabs has expanded VASTox's drug discovery pipelinethrough the addition of a portfolio of high-quality discovery programmes acrossa range of therapeutic indications. One of VASTox's core areas of expertise inneuro-disorders (neurodegenerative and neuromuscular) has been boosted by twoclinical programmes in Phase I trials targeting the symptoms of Parkinson'sdisease, plus several discovery stage programmes focusing on a variety ofneuro-disorders including epilepsy, multiple sclerosis and cognitive disorders.The Company's discovery pipeline has also been augmented with a well-developedpre-clinical programme focused on treatments of glaucoma and age-related maculardegeneration (AMD). VASTox will integrate these programmes rapidly over the coming months with theobjective of advancing them through the clinical and discovery phases ofdevelopment. A Global Force in Two Technology Platforms VASTox's technology platform has been significantly strengthened in the keyareas of zebrafish chemical genomics and carbohydrate chemistry. The acquisitionof DanioLabs has created the premier zebrafish company in the world anddemonstrates the belief the Company has in the ability of zebrafish tosignificantly reduce the cost and time of the drug discovery process. Thisbelief is being validated by the rising number of service collaborations and theincreasing values of these deals, which both VASTox and DanioLabs areundertaking with the wider pharmaceutical industry. Tony Sedgwick, CEO of DanioLabs, commented: "On behalf of the management andfounders of Daniolabs, I am delighted that we have been able to secure thefuture of our drug discovery programmes and chemical genomics technology byjoining forces with VASTox. There is clear synergy between the two companies andwe believe that this combination has created the world's leading company inthese cutting-edge zebrafish technologies. Furthermore, we believe that thisdevelopment will maximise the opportunity for VASTox to change the way drugdiscovery is conducted in the future. It will be exciting to see how thiscompany grows towards its ambitions of becoming a global player." Dextra Laboratories has an established world-class reputation in the areacarbohydrate chemistry and the Company has a profitable custom synthesisbusiness with a turnover in excess of £700,000 in 2006. Dextra has an unrivalledand innovative scientific expertise in the synthesis and manufacture of compoundtargets across a range of therapeutic areas. These novel synthetic techniquesand strategies have generated a valuable library of complex and rarecarbohydrate compounds, which are available to clients through an on-linecatalogue business. The acquisition of Dextra expands significantly VASTox's scientific knowledgeand capabilities in the high-value area of carbohydrate chemistry. Carbohydratemolecules are fundamental to life and bring significant value to drug discoveryby potentially increasing the efficacy of existing drugs while also beingsources of new therapeutics. Following the acquisition of Dextra and the deal in December 2006 for key assetsof MNL Pharma, VASTox now has access to the world's leading experts oncarbohydrate chemistry as it becomes the global leader in this commerciallyunder-exploited area of the drug discovery industry. John Fromson, PhD, Executive Chairman of Dextra, commented: "We are delightedthat Dextra will be joining forces with VASTox and are excited about thescientific, commercial and financial input VASTox can offer to developing ourcombined offering for enhancing the drug discovery and development process. Ourscientists look forward to being part of VASTox and working towards realisingthe full potential of carbohydrates in the pharmaceutical industry anddeveloping this world-class business." Following this announcement, VASTox have begun the process to find a newcorporate identity, which will better reflect the business of the enlargedCompany. High resolution images are available for the media to view and download free ofcharge from www.vismedia.co.uk - ends - For more information, please contact: VASToxSteven Lee, PhD, Chief Executive Officer Tel: +44 (0)1235 443951Darren Millington, Chief Financial Officer Citigate Dewe RogersonMark Swallow / David Dible / Valerie Auffray Tel: +44 (0)207 638 9571 Notes to Editors About VASTox plc VASTox is a leading UK biotechnology company that discovers and developsproprietary new drugs. The Company's internal drug development programmes areunderpinned by its advanced chemistry and drug screening (chemical genomics)technology platforms, which it also provides on a collaborative orfee-for-service basis to the pharmaceutical industry. VASTox has a broad range of drug discovery programmes in the clinical,pre-clinical and discovery stages of development, which target serious diseaseswith a high unmet medical need. These therapeutic areas include neuro-disorders(neurodegenerative and neuromuscular), anti-infectives, ophthalmic diseases,oncology and regenerative medicines. VASTox's in-house drug development capabilities combine world-class expertise inboth medicinal and carbohydrate chemistry with high-volume, high-contentscreening using its proprietary zebrafish and fruitfly technologies (chemicalgenomics). These whole organism screens have the potential to dramaticallydecrease the time and cost of drug discovery and development by delivering datathat are highly predictive of the efficacy and toxicity of potential drugcompounds in humans. The company listed on the AIM market of the London Stock Exchange in October2004 - symbol: VOX Further information about the company is available at www.vastox.com About the Nominated Non-Executive Director, Dr Andrew Richards Dr Andrew Richards has been a director of DanioLabs since its foundation in2002. He is currently a director of Vectura Group plc, Biowisdom Limited,Theradeas Limited, Cancer Research Technology Limited (commercial arm of CR-UK)and Babraham Bioscience Technology Limited in addition to being chairman ofGeneservice Limited and Pharmakodex Limited. He is a founder member of theCambridge Angels, a member of the Council of UEA and a director of theBioindustry Association (BIA). A Cambridge graduate with a PhD in proteinchemistry, he spent his early career with ICI plc (now AstraZeneca plc) and withPA Technology. In 1992, he co-founded Chiroscience and was business developmentdirector through to the merger in 1999 with Celltech. He is an establishedbiotechnology entrepreneur and business angel, focusing on founding, investingin, and assisting in the development of biotechnology and healthcare companiesincluding several of those listed above as well as Arakis Limited, CambridgeBiotechnology Limited, Amedis Pharmaceuticals Limited and Sirus PharmaceuticalsLimited all of which were recently sold. VASTox confirms that, save for the above, there are no other matters underparagraph (g) of Schedule 2 of the AIM rules to be announced. This document contains "forward-looking statements" within the meaning of theU.S. Private Securities Litigation Reform Act of 1995. Forward-lookingstatements can be identified by words such as "anticipates", "intends", "plans","seeks", "believes", "estimates", "expects" and similar references to futureperiods, or by the inclusion of forecasts or projections. Forward-looking statements are based on the Company's current expectations andassumptions regarding our business, the economy and other future conditions.Because forward-looking statements relate to the future, by their nature, theyare subject to inherent uncertainties, risks and changes in circumstances thatare difficult to predict. The Company's actual results may differ materiallyfrom those contemplated by the forward-looking statements. The Company cautionsyou therefore that you should not rely on any of these forward-lookingstatements as statements of historical fact or as guarantees or assurances offuture performance. Important factors that could cause actual results to differmaterially from those in the forward-looking statements include (factorsincluded in this presentation) and regional, national, global political,economic, business, competitive, market and regulatory conditions. This information is provided by RNS The company news service from the London Stock Exchange