CAMBRIDGE, U.K., April 16, 2003 (PRIMEZONE) -- CeNeS Pharmaceuticals plc (Other OTC:CPHAF) (LSE:CEN) today announced that it has received and accepted, subject to shareholder approval, an offer from a subsidiary of Waymade Healthcare Plc of over 9 million Pounds in cash, for three of its four pharmaceutical products ("the Disposal").
The three pharmaceutical products being sold, Diconal, Cyclimorph and Valoid ("the Products"), were acquired by CeNeS from GlaxoWellcome in September 2000. Under the terms of the proposed Disposal, CeNeS will receive 8.3 million Pounds in cash at completion for the sale of the rights to the Products and also an estimated 0.8 million Pounds in cash from the sale of stocks at completion of finished goods and raw materials related to the Products. CeNeS will also collect trade debts that exist at the completion date of approximately 0.6 million Pounds. The Products are mainly sold to hospitals for the treatment of post-operative pain and/or nausea and vomiting.
Neil Clark, Chief Operating Officer and Financial Director of CeNeS commented, "The Disposal enables CeNeS to expand its current pain-focused clinical activities. In the short term CeNeS will be concentrating its efforts on M6G, its most advanced clinical asset, that is planned to enter its Phase III program for the treatment of post-operative pain in 2003. The funds generated will also enable further Phase II studies in CNS 5161 for neuropathic pain. In the medium term, CeNeS will also be in a much stronger cash position from which to negotiate partnership deals for these assets and take advantage of other strategic opportunities that may arise."
Planned use of funds -- clinical development of potential pain treatments -- M6G and CNS 5161 The funds raised from the sale of the products will be used to secure the planned clinical development of CeNeS' leading clinical candidate for the treatment of post-operative pain, M6G (morphine-6-glucuronide). CeNeS plans to continue with the current trial programme and the preparation for the commencement of the major Phase III trial, which is planned to start in 2003. The Board will also review the opportunity to continue the development of M6G for the treatment of chronic pain such as that associated with cancer.
CeNeS also plans to commence an extended Phase II study in neuropathic pain of its clinical candidate CNS 5161. This second Phase II clinical trial for CNS 5161 is expected to start recruitment in 2003. Following on from a successful Phase II pilot study in one group of 10 patients with neuropathic pain that was completed in 2002, this planned second proof of principle Phase II study will extend the dose range of CNS 5161 administered to patients to determine an optimal dose for the relief of neuropathic pain over a 24 hour period. A considerable market opportunity exists worldwide for the effective management of long term neuropathic pain in patients, for example, with diabetic neuropathy. The total neuropathic pain market has been estimated at 1.7 billion Pounds worldwide.
Future strategy
The strategy of the Company is to seek commercial partners for both M6G and CNS 5161 with the objective of securing a partner for M6G with the benefit of Phase III data (assuming successful completion of the planned clinical trials). A partner for CNS 5161 will be sought following the completion of the planned Phase II study assuming the results of that study are positive.
Financial effects of the Disposal
The effect of the Disposal will be to significantly strengthen the Group's balance sheet, injecting some 9 million Pounds of cash before expenses and will remove some 5.8 million Pounds of intangible assets relating to the accounting written down value of the Products from the Group's balance sheet as at 31 December 2002. The products were acquired from Glaxo Wellcome in September 2000 for 10m Pounds. In the year ended 31 December 2002, the Products generated turnover of 3.4 million Pounds. As a result, the Directors of CeNeS anticipate that the revenues of the Group for the financial year 2003 will be adversely affected by the Disposal, however the Directors believe the remaining Group will be in an excellent position to generate higher shareholder growth in the medium to longer term.
Further information
A circular providing further details of the Disposal will be sent to shareholders in due course and an EGM to approve the Disposal is being planned to take place before the end of May 2003.
This news release contains forward-looking statements that reflect the Company's current expectation regarding future events. Forward-looking statements involve risks and uncertainties. Actual events could differ materially from those projected herein and depend on a number of factors including the success of the Company's research strategy, the applicability of the discoveries made therein, the successful and timely completion of clinical studies and the uncertainties related to the regulatory process.
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