After mulling over several takeover offers, UK biotech Vernalis has been won over by an overture from California’s Ligand Pharma that values the company at £33m ($42m).
Shares in the structure-based drug discovery specialist leaped around 20% yesterday after Vernalis announced the proposed cash deal, which has been backed by the UK firm’s board and its two largest shareholders.
If the deal goes through, Ligand will inherit a portfolio of more than eight fully-funded partnered programmes focused around central nervous system, oncology and inflammation, including collaborations with Servier, Daiichi Sankyo, Lundbeck, Asahi Kasei and another undisclosed Japanese partner.
Clinical-stage pipeline projects include Verona Pharma-partnered asthma and allergic rhinitis treatment RPL554, Hsp90 inhibitor luminespib for cancer (formerly partnered with Novartis and now up for a new licensing deal) and aminopeptidase inhibitor tosedostat for leukaemia, which is partnered with CTI Biopharma.
Ligand will also acquire a 70-person R&D team based in Cambridge, UK focused on fragment- and structure-based drug discovery and partnering, with an active portfolio of collaboration agreements generating more than $8m per year in service revenue.
Vernalis said earlier this year it was considering a sale of the business after backing out of an unsuccessful push into sales and marketing in the US, focused on the promotion of cough and cold product Tuzistra XR (codeine polistirex and chlorpheniramine polistirex suspension) – which has underperformed – and antibiotic Moxatag (amoxicillin).
The US commercial arm is being wound down and is due to close entirely next month, closing the curtain on Vernalis’ longstanding commercial relationship with Tris Pharma which will now assume all rights to Tuzistra XR and four partnered pipeline drugs.
Vernalis and Tris also suffered a couple of pipeline disappointments last year after the US FDA issued complete response letters turning down applications to market CCP-07 and CCP-08, two more extended-release cough/cold treatments, blocking plans to extend the US franchise.
If Ligand’s offer is approved by Vernalis shareholders, the transaction is expected to close in October, according to the two companies.