By E. Janene Geiss
Philadelphia, Nov. 18 - Vernalis plc and Cita NeuroPharmaceuticals Inc. announced Friday that the companies will merge with Vernalis paying $29.5 million in shares and assumption of liabilities and up to $35 million in deferred, future milestone payments of either cash or shares.
A total of £15.3 million of the initial share consideration has been arranged in a private placement outside the United States with 24,284,984 new ordinary shares at 63 pence per share fully underwritten by Piper Jaffray, according to a company news release. These shares are being sold so that Cita's existing equity holders can receive cash rather than Vernalis stock.
In addition to the merger deal and private placement, the company intends to raise £42.7 million in an open offer of 67,749,457 shares at 63 pence per share, officials said.
The net proceeds of the placing and open offer after the cost of the Cita acquisition will amount to £38.7 million, a sum that will allow the company to fund development of Cita's clinical drug candidates CNP1512 for Parkinson's disease and CNP 3381 for neuropathic pain and invest in the marketing and development of Apokn for Parkinson's disease. It will also go toward restoring working capital, officials said.
"Our CNP1512 Parkinson's drug candidate, entering phase 3 clinical trials, gives Vernalis a broader and more mature development pipeline in its key area of neurology and CNS disorders. Vernalis is also building a specialty pharmaceutical commercialization capability in the form of a sales force in the U.S.," Cita chief executive officer Anthony Giovinazzo said in a press release.
Vernalis is a specialty pharmaceutical company based in Morristown, N.J., focused on drugs for the treatment of neurology and central nervous system disorders.
Cita is a neuropharmaceutical company based in Mississauga, Ontario, focused on the development and commercialization of small molecule drug candidates.
Private placement
| Issuer: | Vernalis plc
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| Issue: | Ordinary shares
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| Amount: | £15.3 million
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| Shares: | 24,284,984
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| Price: | 63p
|
| Placement agent: | Piper Jaffray
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| Announcement date: | Nov. 18
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| Stock price: | | 63.25p at close Nov. 18
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