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Biotech / Medical : Sonus Pharma (SNUS) ? Opinions -- Ignore unavailable to you. Want to Upgrade?

To: DewDiligence_on_SI who wrote (355)	10/18/2005 5:18:53 AM
From: DewDiligence_on_SI	Read Replies (1) \| Respond to of 384

Some details of the SHR-SNUS deal are now available, according to Reuters. The up-front payment is $20M, and the $15M in equity will be bought at Monday’s closing price of $4.06. Still no word on the size of potential milestone payments. yahoo.reuters.com >> Schering strikes licensing deal, takes Sonus stake Tue Oct 18, 2005 04:54 AM ET By Sitaraman Shankar FRANKFURT, Oct 18 (Reuters) - German drugmaker Schering ( SHR ) has agreed to acquire an exclusive worldwide licence to Sonus Pharmaceuticals' ( SNUS ) Tocosol anti-cancer drug and a stake in the U.S. firm, it said on Tuesday. Schering said it would take a stake of approximately 15 percent in Sonus, which is based near Seattle. Sonus will also get an upfront fee, milestone payments and royalties. A Schering spokesman said that the company would pay $20 million up front. The value of the stake, which will be in freshly issued shares, is likely to be around $15 million based on Sonus's closing price on Monday of just over $4. The German company is in dire need of new drugs after a series of product setbacks that threaten its future profitability. It has said it plans to focus on cancer treatments as part of a programme to streamline research spending. Analysts said the deal made sense for Schering. "Tocosol is a sensible addition to Schering's portfolio in the oncology area," said Landesbank Rheinland-Pfalz analyst Alexander Groschke. "Still, the product offers a gradual improvement versus standard therapies, and its potential is limited." Tocosol is in a Phase III pivotal study for the treatment of metastatic breast cancer, and Schering and Sonus plan to submit a New Drug Application by the end of 2007, Schering said. Its active ingredient is paclitaxel, a member of the taxane group of anti-cancer drugs and a part of several approved drug products that are on the market. Tocosol is given as an emulsion along with Vitamin E. Schering shares were up 0.9 percent at 51.09 euros at 0833 GMT, outperforming a 0.1 percent rise in the DAX bluechip index . SUCCESS NEEDED Schering has set itself demanding profitability targets and is in the process of cutting costs. Sales growth, however, will come only if it can get big drugs on to the market. While it has received a U.S. approval on hormone replacement therapy Angeliq, some other recent setbacks have hurt the shares. Last week, Schering said it was stopping trials on uterine fibroid drug asoprisnil because of adverse effects. In July, Schering and partner Novartis said they were reviewing plans for anti-cancer treatment PTK/ZK after the medicine missed the mark in trials. U.S. regulators said in May they would not consider approving Schering's Bonefos bone tumour drug until results from a trial currently underway were available in 2008. <<