This is what Wall Street Journal had to say:
Dow Jones Newswires -- March 31, 1998
Chiroscience Joins Forces With Zeneca In Win-Win Deal
By ERIK PORTANGER
AP-Dow Jones News Service
LONDON -- Chiroscience Group PLC (U.CCC) Tuesday took its biggest
step so far in becoming the first U.K. biotech company to bring a drug to market, signing a major licensing deal with Zeneca Group PLC (ZEN).
The agreement hands Zeneca exclusive worldwide rights, excluding Japan, to Chiroscience's long-acting anesthetic, Chirocaine. In exchange, the biotech company will get royalties from Zeneca estimated at around GBP200 million. Zeneca will also buy 3.5 million shares in Chiroscience at 425 pence a share, representing 3.2% of its enlarged capital.
Investors and analysts responded positively to the news.
Around 0930 GMT, shares in Chiroscience were up 69 pence, or 26%, at
332.5 pence - their highest level since early 1997. Zeneca shares are 45 pence lower at 2,540 pence.
'This is very positive,' said Stewart Adkins, an analyst at Dresdner Kleinwort Benson. 'Clearly Zeneca has the ability and infrastructure already in place to sell this product effectively and aggressively.'
Adkins expects Chirocaine sales to peak in 2004 at around GBP250 million a year. On that basis, the deal is worth 20 pence a share to Zeneca's valuation, he says, while Chiroscience shares are 'fair value' at around 400 pence.
Meanwhile, Chiroscience chief executive John Padfield told Dow Jones
Newswires the alliance means Chirocaine could be available for sale in some European markets within the next six months.
The only remaining hurdle is to win European regulatory clearance to sell the drug. But Padfield said he's confident this will come through soon, with Sweden expected to approve the drug around mid-year and full European Union clearance within three months of that.
Chiroscience will also seek U.S. Food and Drug Administration approval for the drug during April, although it might take up to 18 months before approval is granted.
Chirocaine is the brand name for Levobupivacaine, a long-acting anesthetic that Chiroscience says is equal in strength to existing products on the market, but lacks many of their unpleasant side effects.
The product is one of several discovered by Chiroscience using chiral
technology, a process that involves identifying the elements of a drug that achieve the desired results, and separating them from those causing unwanted side effects. As well as increasing the effectiveness and tolerance of drugs, analysts say chiral technology can also speed up development times and slash costs.
In its statement, Chiroscience said Zeneca has agreed to finance a
'substantial' Phase IIIb/IV clinical and marketing study on the drug over the next two years. The results, while not required by regulatory authorities, are aimed at proving the safety of Chirocaine and improving its acceptance in the market.
Christine Soden, finance director of Chiroscience, said in an interview the company retains the right to use the drug's active ingredient, Levobupivacaine, in areas not specified in its deal with Zeneca.
'These aren't as big as the main product, but they're still quite interesting' she said.
Soden said royalties from Zeneca will be 'stepped,' so that any sales increase above expected levels will result in Chiroscience receiving a bigger cut of the returns. The finance director said she expects royalties to 'peak' in about four or five years time.
Tom McKillop, chief executive of Zeneca, said the deal 'confirms our
commitment to expanding our hospital franchise and anesthetic business.'
'We believe that Chirocaine is the 'best in class' long-acting local anesthetic and its medical and health economic benefits will promote extended use in both surgery and pain management,' McKillop added.
Chiroscience Group PLC is a pharmaceutical research group that specializes in chiral technology - separating chemically identical molecules from their mirror images - and gene-based research.
Founded in 1992, the company's initial focus was on developing 'cleaned up' versions of existing generic drugs, using chiral technology to reduce side effects.
Dexketoprofen, a pain killer used in arthritis, is being marketed in Spain by Menarini Diagnosticos SA and the company is working on improved versions of existing drugs for Medeva PLC of the U.K. and Germany's Knoll AG. It has also created integrated drug-discovery programs targeting osteoporosis and psoriasis.
Headquarters: Cambridge Science Park, Milton Road, Cambridge, CB4
4WE. Tel: 01223 420430.
Significant developments: In March 1998, Chiroscience signed a worldwide licensing deal for its Chirocaine long-acting local anesthetic with Zeneca Group PLC. The deal is expected to bring in a royalty stream of GBP200 million for Chiroscience. European Union marketing approval for the drug is expected in late 1998 and sales should start flowing through shortly after.
In June 1997, Chiroscience announced a collaboration with Schering-Plough Corp. of the U.S. to develop oral treatments for asthma and other inflammatory diseases, relying on Chiroscience's work with the class of drugs known as PDE IV inhibitors.
In December 1996, Chiroscience completed the takeover of Darwin
Molecular Corp. for GBP72 million. The Seattle-based company specializes in gene-based research. By May 1997, Chiroscience had successfully completed the integration of its own chemistry-based research with Darwin's expertise in genomics under the umbrella organization Darwin Discovery.
All figures are in sterling
6 Mos 6 Mos Year Year
ended ended ended ended
8/31/97 8/31/96 2/28/97 2/28/96
Pretax Loss (14.4 mln) (7.6 mln) (18.70 mln) (11.64 mln)
Sales 9.2 mln 4.7 mln 11.54 mln 4.96 mln
EPS (13.6 p) (9.7 p) (21.9 mln) (16.8 p)
Currency history (dollar vs sterling)
London 8/31/97 8/31/96 2/28/97 2/29/96
Close 1.6180 1.5617 1.6290 1.5270
Stewart Adkins is an analyst at Lehman Brothers, not Dresdner Kleinwort Benson.
Copyright c 1998 Dow Jones & Company, Inc. All Rights Reserved. |
