Chiroscience: Shares leap 23% after Zeneca deal
WEDNESDAY APRIL 1 1998
By Daniel Green
Shares in Chiroscience, the UK biotechnology company, jumped 23 per cent yesterday
after it announced Zeneca, the pharmaceuticals company, would commercialise its
anaesthetic Chirocaine.
Both companies said the deal should bring in œ200m in revenues for Chiroscience, but
John Padfield, Chiroscience's chief executive, said this figure was deliberately
conservative.
As part of the deal Zeneca, the UK's third largest pharmaceuticals company, will pay
œ15m for 3.17 per cent of the company in newly issued shares. That investment values
the shares at 425p each compared with yesterday's closing price of 323«p.
Analysts have long expected the deal and the share price rise confirms Chiroscience's
position as one of the UK's top three biotechnology companies by market value, behind
British Biotech and Shire Pharmaceuticals. Chiroscience floated in 1992 at 150p a share.
Chirocaine is likely to be launched in its first European markets this year. Chiroscience
plans to submit it for US regulatory approval this month, with the launch there likely
next year.
The deal is the latest in a series by Chiroscience. Last month it signed a collaboration
agreement with US company Bristol-Myers Squibb, and last year it agreed a similar
contract with US drugs company Schering-Plough.
Chirocaine is a long-acting local anaesthetic that is a purified version of an old drug,
bupivacaine, that is sold under the trade name Marcaine.
Bupivacaine is a mixture of two molecules that are chemically identical but physically are
mirror images of each other. Use of bupivacaine is limited by side-effects that are
associated with one of the mirror images and have been linked with 90 deaths since it
was launched in the 1970s.
Chirocaine is the other mirror image, so the two companies believe it will both replace
bupivacaine and allow new uses so far prevented through fear of side-effects.
Bupivacaine's patents have expired, but those protecting Chirocaine last until 2014. It is
likely to be used mostly in surgery and in pain relief during childbirth.
The above is from tomorrows(!) Financial Times.
It's odd that this has happened just before approval that I thought was due in April. Zeneca must be very sure that approval will occur. |
