Peptech Realises A$178m on Domantis' GSK Deal
Friday December 8, 6:32 am ET
SYDNEY, Australia, Dec 8 /PRNewswire/ --
Key Points
- GSK enters into agreement to acquire Domantis for GBP 230 million
approximately A$575 million)
- Peptech share of gross proceeds is GBP 71.3 million (approximately
A$178 million or $1.08 per share)
- Peptech realises gain of A$138.2 million from an investment of
A$40.2 million
- Valuation significantly exceeds market expectations
Peptech along with other Domantis shareholders have entered into an
agreement to accept an offer made by GlaxoSmithKline (GSK) to acquire
Domantis, in which Peptech holds a 31.02% fully diluted interest.
Domantis is a leader in the development of next generation therapies
based on domain antibodies (dAbs).
Peptech Chairman and Domantis Director Mr Mel Bridges said the Peptech board was delighted that its Domantis investment would deliver such a substantial return to Peptech.
"This is an outstanding result, particularly given the largely pre-clinical stage of Domantis' development pipeline. It clearly validates the board's decision to leverage Peptech's anti-TNF licensing revenues to support a substantial shareholding in Domantis through various funding rounds," Mr Bridges said.
Peptech Chief Executive Officer Dr John Chiplin said the transaction further justified Peptech's enthusiasm for its own anti-inflammatory dAb-based product PN0621.
"We understand that this is the most advanced dAb-based product in terms of its pre-clinical development and we expect to initiate Phase I clinical trials in the second quarter of 2007," said Dr Chiplin.
"The Domantis proceeds together with Peptech's existing cash reserves and ongoing future licensing revenues (estimated to be A$100 - A$130 million over the next four years) gives Peptech a substantial opportunity to execute its previously announced aggressive growth strategy.
"Peptech's board and management have demonstrated consistent ability to commercialise its intellectual property with revenues over the last six years of A$330 million, inclusive of the Domantis share sale consideration.
"Peptech is extremely confident of its future potential and is focused on expanding its product pipeline to create long term shareholder value."
The total consideration payable to Domantis shareholders for their interests in Domantis is GBP 230 million. Of this, 10% of the funds will be withheld in escrow for a period of 12 months following completion to cover any warranty claims.
Peptech's net proceeds (after deducting existing liabilities in relation to partly paid shares) from the transaction (based on current exchange rates) are estimated to be A$170.3 million with A$152.5 million payable on completion
and a further A$17.8 million payable after 12 months, assuming no warranty claims have been made.
The acquisition agreement is subject to clearance under the Hart-Scott- Rodino Antitrust Improvements Act and is expected to complete in January.
Attached is the announcement of the transaction released by GSK.
Further information:
Dr John Chiplin
Chief Executive Officer
Peptech Limited
Tel: + 61 2 9870 8788
Released by:
Stephanie Paul
Managing Director
Phillips Group
Tel - 07 3230 5000
Mobile - 0418 753 062
About Peptech:
Peptech Limited focuses on the research and development of peptides and proteins in the areas of human pharmaceuticals and animal health. The company is positioned to become a globally recognised leader in biopharmaceutical development.
For further information: www.peptech.com
Appendix - pro forma balance sheet
The pro forma balance sheet below has been produced for illustrative purposes only, and, because of its nature, may not give a true picture of the financial position of the group.
The statement is intended to illustrate how the disposal of Peptech's stake in Domantis might have affected the net assets of the group, had it occurred on 30 September 2006.
At 30 September | Estimated impact of |Pro forma balance
2006(Audited) | Domantis sale |sheet (unaudited)
A$m | (unaudited) | A$m
| A$m |
| |
Cash: 40.7 | 152.5 | 193.2
Domantis: 40.2 | (40.2) | -
Other assets: 19.3 | 17.8 | 37.1
Total assets: 100.2 | 130.1 | 230.3
Liabilities: 14.3 | (8.1) | 6.2
Equity: 85.9 | 138.2 | 224.1
Accounting standard: AIFRS | AIFRS | AIFRS
The Domantis sale proceeds will vary based on the AUD/GBP exchange rate at date of completion. In the above table an exchange rate of 0.4000 has been used. |
