Cambridge life science business Vernalis has received several approaches to buy all or part of the company whose research function is anchored at Granta Park.
All the suitors have signed non-disclosure agreements and multiple “detailed discussions” are now underway.
CEO Ian Garland reiterated that the board wanted to finalise any proposed sale by September 30. The UK share price was substantially boosted by the announcement.
Vernalis overstretched with an accelerated commercial push in the US and decided to explore selling the business as the optimum way forward. Its technology remains in demand and with a market cap north of £39 million the company remains an attractive acquisition target.
As part of the ongoing closure of its US operations Vernalis has terminated a key agreement with Tris Pharma, Inc.
Vernalis will pay Tris $10m in cash. The Cambridge company is released from all future payment obligations under the development and commercialisation agreement including obligations to pay Tris milestones on development programmes.
Vernalis has also transferred to Tris the rights to its Tuzistra® XR technology including the New Drug Application and Tris will retain the rights to CCP-07, CCP-08, CCP-05 and CCP-06 from the Vernalis stable.
Vernalis will be entitled to a high single digit royalty on sales of Tuzistra® XR for a 10-year period and on CCP-07 and CCP-08 for 10 years from product launch.
Vernalis remains responsible for all Tuzistra® XR commercial activities up to the date of the NDA transfer. Vernalis also remains liable for any returns, rebates and co-pay assistance costs on stocks of Tuzistra® XR with wholesalers or pharmacies at the date of transfer.
Vernalis has deposited $3 million into an escrow until June 30, 2020 to fund these returns, rebates and co-pay assistance costs.
After the $10m payment to Tris and funding the escrow account, Vernalis projects a cash balance of £26m-£27m at June 30, 2018.
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