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Bentley to separate its two businesses

US-based Bentley Pharmaceuticals will separate its drug delivery business from its generics arm to create two independent public companies

US-based Bentley Pharmaceuticals has said it will separate its drug delivery business from its generics arm to create two independent public companies.

The drug delivery spin-off will be named CPEX Pharmaceuticals, but is still subject to numerous conditions, including final approval by Bentley's board of directors and the filing and effectiveness of an SEC registration statement.

Bentley plans to implement the drug delivery spin-off through a taxable stock dividend of all CPEX Pharmaceuticals to Bentley shareholders.

Per the plan, Bentley will provide transitional services, including managerial, operational, and administrative support, for a period of up to 24 months until CPEX can establish its own operations independently.

CPEX will focus on drug delivery, focusing on Bentley's CPE-215 permeation enhancement technology, which enhances the absorption of drugs across a variety of biological membranes, including the skin, mouth, nose and eye. The company is developing the technology to formulate creams, ointments, gels, solutions, lotions, sprays and patches.

The technology is already used in Testim testosterone gel marketed by partner Auxilium Pharmaceuticals. It is also being used in Nasulin, an intranasal insulin product currently in phase II trials.

The division of the company will allow Bentley to focus on its generics pharmaceuticals business, which is the larger of the two segments. FY06 revenues were USD 101.1m, compared with the drug delivery arm, which reported FY06 revenues of USD 8.4m.

Bentley said in press statement that it would maintain its commercial and manufacturing presence in Europe and develop, market and license current and pipeline pharmaceuticals there.

Bentley's CEO James Murphy added: "Operating separately will allow each company to benefit from greater strategic and managerial focus. The separation will enable the two businesses to compete more effectively in their respective markets and optimise their respective business goals, research initiatives and capital requirements. We believe that our decision to separate out two businesses and to explore all available strategic alternatives with respect to the generics business may result in increased value for our shareholders."

30th September 2008

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