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Orexo to buy Biolipox

Orexo will acquire Biolipox to obtain new therapies for inflammatory diseases, including pain management, and respiratory indications, such as asthma and chronic obstructive pulmonary disease

Swedish pharmaceutical company Orexo will acquire Biolipox, which develops new therapies for inflammatory diseases, including pain management and respiratory diseases, such as asthma and chronic obstructive pulmonary disease (COPD).

The transaction will take place through an issue-in-kind to Swedish-headquartered Biolipox's shareholders. The deal values the company at SEK 856m (USD 133.7m), and payment will be made through an issue of a maximum of 8,560,000 Orexo shares at SEK 100 per share.

The merged company will retain the Orexo name and branding.

The final structure of the transaction is dependent on Orexo's completion of due diligence of the Biolipox acquisition. The deal is also conditional upon approval of the issue in kind by an extraordinary general meeting of Orexo and customary regulatory approvals.

ABG Sundal Collier served as financial advisor to Orexo, while HDR Partners served as financial advisor to Biolipox.

An extraordinary general meeting of Orexo will be held on 1 November 2007 and the acquisition should complete in that month.

Following the transaction, Biolipox's shareholders will own 38 per cent of the combined company. Biolipox main owners are committed to a lock-up period of three months, following the close of the transaction.

The two companies have together approximately 120 employees, including nearly 90 engaged in drug development. Orexo's headquarters will remain in Uppsala, Sweden.

Dr Torbjoern Bjerke, currently CEO of Biolipox, will serve as President and CEO of the new company. Claes Wenthzel will continue to serve as executive vice-president and CFO, while

Astroem will continue as chairman. Orexo's current CEO, Zsolt Lavotha, will be leaving his operational responsibilities in the company for personal reasons and will serve as senior advisor to Orexo's board.

Orexo says its primary focus will be on development and commercialisation of products primarily in the areas of pain management and respiratory diseases targeting well defined patient groups and specialists, enabling Orexo to play a fully integrated role from research to commercialisation.

Biolipox's pipeline includes projects in the areas of pain management and respiratory diseases. The combined company's product pipeline will consist of a number of priority projects, most of which are in late stage development, as well as a number of other projects which will be evaluated by company management.

Hakan Astroem, chairman of Orexo's board, commented: "The combination of Orexo and Biolipox will create a larger and more robust pharmaceutical company with a broad and attractive product pipeline. Orexo's business model, combined with the Biolipox innovative research pipeline is an exciting combination to create value."

Torbjoern Bjerke, CEO-elect of Orexo and currently President and CEO of Biolipox, comments: "I look forward to leading the combined company with the objective of commercialising its product portfolio as rapidly as possible. We have solid capabilities and will now have greater opportunities to drive development of our new medicines for the benefit of the patients."

As of 30 September 2007, Orexo and Biolipox had combined cash and short-term investments amounting to SEK 242m. Both companies will receive cash payments totalling approximately SEK 171m (USD 26.7m) throughout the rest of 2007.

30th September 2008


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