Tight US pharma research market prompts Sareum into ‘strategic review’
Sareum Holdings plc, the structure-based drug discovery firm, said it is undertaking a strategic review to consider how best to take the business forward as a result of what it described as “difficult trading conditions”, especially in the US.
Sareum, formed in August 2003, uses a structure-based approach to the discovery of new drugs for the treatment of cancer. It also provides specialist drug discovery capabilities to the pharmaceutical and biotechnology industries.
Sareum has been funded through fee-for-service-contract revenues and equity issues.
The Board said the review has been initiated for a number of reasons;
• Difficult trading conditions resulting from a reticence in the research service sector, particularly in the US, to use cash reserves to sponsor new research activities until financial conditions improve. Combined with a high level of M&A activity within the pharma and biotech sector, this has interfered with decision making for the initiation of new research programs.
• The current depressed share price in common with most small cap plcs; and
• The Board has received approaches from parties interested in Sareum's drug discovery business and in-house cancer drug discovery programs.
The Board said it will consider a number of options including; the sale of all or part of the business, the raising of additional equity funds, entering into partnering arrangements, or the acquisition of a suitable business to acquire extra critical mass.
Grant Thornton Corporate Finance has been appointed as financial advisers.
To comply with the Takeover Code, Sareum is now in an offer period.
The Cambridge-based firm saw its share price slide almost 6% on the news, valuing the company at around £3.25m.
5 May 2008
