Cosmo Pharmaceuticals SpA announced its intention to launch a public tender offer to acquire all outstanding shares of BioXell SpA. Simultaneously with this announcement, Cosmo has published a pre-announcement stipulating in detail the terms and conditions of its offer.

The principal elements of which are – A total purchase price of up to CHF 41.3 million (€ 27.4 million), for 100% of BioXell’s outstanding share capital, consisting of CHF 15.1 million in cash; 1’132’500 of newly issued Cosmo shares each with a par-value of EUR 0.25 each; and 1’132’500 options each giving the holder the right to put the Cosmo shares to Cosmo at a strike price of CHF 21.00 between July 1, 2011 and 31 December 2011.

Based upon 5’381’577 registered BioXell shares outstanding, Cosmo’s offer is equivalent to CHF 7.68 per BioXell share, equalling: CHF 2.8059 in cash, CHF 3.64 equivalent to 0.21044 newly issued, freely exchangeable Cosmo shares (using Cosmo’s 60-day volume-weighted average closing price), and CHF 1.23 equivalent to 0.21044 in newly issued put options for Cosmo shares, using typical valuation methods for option pricing. A premium of 17.1 per cent over BioXell’s volume-weighted average closing share price over the last 60 trading days.

The cash component of the offer will be increased, subject to certain conditions, based on the collection by BioXell of certain receivables or sales (if any should occur) of BioXell’s technology assets to third parties prior to closing of the Offer.

Closing of the offer will be subject to Cosmo having received acceptances representing 60 per cent of BioXell’s outstanding share capital and to Cosmo and to certain other conditions. Cosmo’s majority shareholder, Cosmo Holding SpA, has already given its support for the offer and committed to vote in favour of the required capital increase at a shareholders meeting to be convened in December 2009.

More details of Cosmo’s proposal can be found in the pre-announcement published today. Cosmo expects to launch the offer in December. Closing of the offer is expected by the end of March 2010.

Mauro Ajani, CEO of Cosmo, commented: “Our offer represents an opportunity to increase our free float and our cash reserves faster and at competitive terms. If 100 per cent of BioXell shares are tendered, our free float will increase by 22 to 32 per cent improving the liquidity of our shares. Whilst we have a comfortable cash position and are profitable, the additional cash will enable us to accelerate a number of our clinical programs and put us in a stronger position to negotiate favourable terms for our un-partnered pipeline products. We look forward welcoming BioXell’s shareholders and are very pleased to offer them the opportunity to participate in the future growth of our company.”

BioXell’s board of directors has simultaneously announced today their unanimous support in favour of the proposed transaction with Cosmo and will recommend to its shareholders to accept the tender offer by Cosmo. In addition, Index Ventures and TVM Capital, who together own 19.7 per cent in BioXell, have given undertakings to tender their shares into Cosmo's offer.

Cosmo is a speciality pharmaceutical company that aims to become a global leader in optimised therapies for certain Gastrointestinal Diseases.

BioXell is a listed biopharmaceutical company focused on the discovery and development of drugs that exploit novel mechanisms of action.