York Pharma plc, the specialist dermatology company, announced the acquisition of Derms Development Limited ('Derms Development'), a specialty dermatology business with a wide distribution platform, products and revenues, for consideration of £17.5 million. York Pharma also provides a trading update for the year ended September 30, 2007. The preliminary results will be announced on November 23, 2007.
The acquisition of Derms Development is highly complementary to the activities of York Pharma, which is currently an R&D based company with ten projects spanning all stages of development. York Pharma's lead product, Abasol, is awaiting regulatory approval in the United Kingdom, its first market. The sales and distribution platform constructed by Derms Development will enable York Pharma to commercialise its own pipeline in selected markets, whilst continuing to partner in others, the company said.
"The acquisition of Derms Development brings a distribution platform, marketed products and revenues to York Pharma. It takes our business another step closer to becoming a self-sustaining, international, R&D based specialty pharmaceutical company focused upon the treatment of diseases of the skin. In addition, we are well positioned to move into the revenue-generating phase of the Company's development with our own pipeline.
Plans to commercialise Abasol are progressing and are complemented by further product portfolio achievements," said, Terry Sadler, chief executive, York Pharma.
The lead products Zindaclin and Vitix will give York Pharma immediate entry into two expanding dermatological market segments with the potential to develop current sales into new territories, some already with granted marketing approvals. The directors believe that there remains substantial development potential in the business of Derms Development, which is in the formative stage of both its domestic and international development.
"The combination of Derms Development's business with York Pharma creates one of the leading specialty dermatology companies in Europe, with a strong portfolio of marketed products and commercial infrastructure, a broad and late stage drug development pipeline and a first rate R&D capability to deliver future growth. Dermatology is rapidly emerging as one of the most exciting areas of the pharmaceutical market and the enlarged York Pharma is strongly placed to exploit this opportunity. We look forward to participating in York Pharma's continued strong growth," said, Christopher Evans, chairman, Merlin Biosciences
The total net assets of Derms Development as at 31 December 2006 were £3.6 million. The acquisition agreement provides for the conditional purchase of the entire issued share capital of Derms Development from the vendors for consideration of £17.5 million (subject to a completion accounts adjustment). The consideration is payable in two parts. An initial consideration of £15 million is to be satisfied by the allotment to the vendors of 11,538,461 new ordinary shares ("the Consideration Shares") at £1.30 per share. A vendor placing, arranged by Collins Stewart Plc and JMFinn Capital Markets Limited as joint brokers, will raise £250,000 in cash for certain of the vendors of Derms Development at completion through the placement of 208,333 of the Consideration Shares ("the Vendor Placing Shares") with institutional and other investors at £1.20 per share ("the Placing Price"), the report said.