BioProgress buys US-based airPharma for £4.2m; raises £6.15m in share placing
The speciality pharmaceutical and healthcare company BioProgress plc (BPRG.L) said today that will acquire the pharmaceutical trading assets of airPharma LLC, a US based maker of respiratory products, for £4.2m.
This acquisition will enable it to leverage its technologies into own branded products in the US. BioProgress said it also benefits from being able to use airPharma’s sales and distribution arrangements with US distribution companies Cardinal, McKesson and AmerisourceBergen.
CEO Richard Trevillion (pictured) said: “The synergies both in terms of our existing branded products and new line extensions should be capable of significant revenue generation in 2007. We will be utilising our TabWrap, EntWrap and Soluleaves systems almost immediately to add value to these products creating new launch opportunities early in the New Year.
“The acquisition of the airPharma brands continues BioProgress’ successful acquisition strategy”.
airPharma assets comprise 20 brands such as Ah-Chew and SINUvent, ten of which are marketed and will be re-branded under Dexo, BioProgress’ US division. The products portfolio is established and mature, consisting of products for the treatment of chronic respiratory conditions such as asthma and rhinitis and fits well with BioProgress’ European range of products such as Collunovar. The products acquired are mainly community prescription medicines.
Sales of the airPharma brands are expected to be about $4.2m in 2006.
$4m (£2.1m) of the acquisition cost will be paid in cash. The rest will in sterling denominated BioProgress ordinary shares in two tranches. The first of $2m will be issued after 31 December based on the last closing bid price on the immediately preceding trading day. The second tranche of $2m will be issued next March, provided gross sales for 2006 are at least $3.3m.
BioProgress also announced a placing of 12.3m new ordinary shares with new and existing institutional investors, representing around 8.7% of existing share capital, at 50p each (an 11.3% discount to the mid-market closing share price over the fifteen trading days prior to the announcement). The placing was oversubscribed.
New Technology
BioProgress also announced the launch of a new enabling technology, SoluPol, a method for delivering liquid dosages.
Liquid medicines can offer an alternative to the traditional solid dosage forms but taste issues have to be overcome. SoluPol has the ability to taste mask, enhance stability and create novel small volume buccal liquids, the Cambridge-headquartered company said. These liquids can also have a muco-adhesive or muco-protective effect within the mouth.
BioProgress said it is in talks with pharmaceutical firms to develop SoluPol products. There has been a deal in principle for the development and licensing of a specific product using SoluPol with a division of Zentiva AS, a pharma based in the Czech Republic and part owned by Sanofi Aventis, for the CEE and CIS regions. Talks continue with licensing partners in Western Europe and North America for both prescription and OTC rights to this product.
Chief Development Officer Steve Martin said that with its aim of delivering medicines better, “we are able to offer the patient choice in how they take their daily medicines”.
SoluPol is complementary to its Soluleaves and TabWrap enabling technologies with the ability to offer higher doses of active drug, but in a patient-friendly manner.
The group’s share price slipped 4% to 60.50p on the news, valuing the company at around £85m. The share price has almost doubled since August.
30th October 2006
