Oxford, UK, 22 March 2007 – VASTox plc (AIM: VOX) announced today that it has completed the simultaneous acquisition of DanioLabs Ltd (“DanioLabs”), a private UK drug discovery company, and Dextra Laboratories Ltd (“Dextra”), a specialist carbohydrate chemistry service company. These deals represent an important strategic step for VASTox as they strengthen and diversify its drug discovery and development pipeline through the addition of two clinical and two pre-clinical programmes in neurological and ophthalmic diseases, which will provide increased near-term opportunities for high-value licensing and partnership deals; enhance its scientific expertise and capabilities in zebrafish chemical genomics and carbohydrate chemistry; and boost its scientific infrastructure through the acquisition of two high-tech laboratory facilities in Cambridge and Reading. These technology platforms are crucial to VASTox’s ability to create value as they underpin its internal drug discovery and development programmes as well as forming a basis for the enhanced growth of its profitable pharmaceutical services business. In addition, the strengthened technology platforms will immediately increase the revenues generated by the service business and also offers the potential for an increase in number of higher-value collaboration deals with its now enlarged client base.
Daniolabs (Cambridge, UK) has been acquired for £15 million payable through the issue of 11,732,361 new 10p ordinary shares and cash of £159,000 to DanioLabs’ existing shareholders based on a VASTox share price of 126.5p, calculated as an average share price over a ten-day period ending 20 March 2007, the last business day before the deal was concluded. Of the consideration shares, 1,173,233 shares will deferred and issued in one year’s time provided there are no warranty claims during the intervening period. At 31 July 2006 DanioLabs recorded net assets of £2.74m and a loss on operating activities before taxation of £2.76m. The CEO and CFO of DanioLabs will step down with immediate effect. VASTox will retain Daniolabs’ scientific research facility in Cambridge and all 37 remaining staff will take up new positions within the enlarged Group. In addition, Dr Andrew Richards, a Non-Executive Director of Daniolabs since its inception, will be appointed as a Non-Executive Director of VASTox. See Notes to Editors for biography.
Dextra Laboratories (Reading, UK) has been acquired for £1.5 million, payable through the issue of 1,185,771 new 10p ordinary shares to Dextra’s existing shareholders, based on a VASTox share price of 126.5p, calculated as an average share price over a ten-day period ending 20 March 2007, the last business day before the deal was concluded. On 30 September 2006 Dextra recorded net assets of £0.17m and a profit on operating activities before taxation of £0.07m. VASTox will retain Dextra’s state-of-the-art chemistry facility in Reading with all 17 Dextra employees becoming employees of the enlarged VASTox. The acquisitions are expected to complete by 28 March 2007 when the shares will be admitted to AIM. Following the completion of both these transactions, a total of 48,961,965 ordinary shares will be in issue.
Commenting on both deals, VASTox’s CEO Steve Lee, PhD said: “The acquisitions of DanioLabs and Dextra represent a transforming development for VASTox. The successful completion of these two deals will add significant value to VASTox’s business with important clinical and pre-clinical additions to our drug pipeline and a strengthening of our drug discovery and development technology platforms.
“Following these transactions, plus the earlier deal with MNL Pharma in December 2006, VASTox now has a broad drug discovery pipeline with programmes in clinical and discovery phases of development targeting neuro-disorders, cancer, ophthalmology, infectious diseases and regenerative medicine. In addition, the Company has established itself as the dominant global player in the areas of chemical genomics and carbohydrate chemistry, both of which are increasingly being recognised by pharmaceutical and biotechnology companies as valuable and effective technologies for the drug discovery and development process.
“Today’s announcement further highlights the ambitions we have for the future of VASTox and we are confident the enlarged company has now reached a position where it will be able to create substantial value for all our shareholders.”
An Enhanced Drug Discovery Pipeline
The acquisition of DanioLabs has expanded VASTox’s drug discovery pipeline through the addition of a portfolio of high-quality discovery programmes across a range of therapeutic indications. One of VASTox’s core areas of expertise in neurodisorders (neurodegenerative and neuromuscular) has been boosted by two clinical programmes in Phase I trials targeting the symptoms of Parkinson’s disease, plus several discovery stage programmes focusing on a variety of neuro-disorders including epilepsy, multiple sclerosis and cognitive disorders. The Company’s discovery pipeline has also been augmented with a well-developed pre-clinical programme focused on treatments of glaucoma and age-related macular degeneration (AMD). VASTox will integrate these programmes rapidly over the coming months with the objective of advancing them through the clinical and discovery phases of development.
A Global Force in Two Technology Platforms
VASTox’s technology platform has been significantly strengthened in the key areas of zebrafish chemical genomics and carbohydrate chemistry. The acquisition of DanioLabs has created the premier zebrafish company in the world and demonstrates the belief the Company has in the ability of zebrafish to significantly reduce the cost and time of the drug discovery process. This belief is being validated by the rising number of service collaborations and the increasing values of these deals, which both VASTox and DanioLabs are undertaking with the wider pharmaceutical industry.
Tony Sedgwick, CEO of DanioLabs, commented: “On behalf of the management and founders of Daniolabs, I am delighted that we have been able to secure the future of our drug discovery programmes and chemical genomics technology by joining forces with VASTox. There is clear synergy between the two companies and we believe that this combination has created the world’s leading company in these cutting-edge zebrafish technologies. Furthermore, we believe that this development will maximise the opportunity for VASTox to change the way drug discovery is conducted in the future. It will be exciting to see how this company grows towards its ambitions of becoming a global player.”
Dextra Laboratories has an established world-class reputation in the area carbohydrate chemistry and the Company has a profitable custom synthesis business with a turnover in excess of £700,000 in 2006. Dextra has an unrivalled and innovative scientific expertise in the synthesis and manufacture of compound targets across a range of therapeutic areas. These novel synthetic techniques and strategies have generated a valuable library of complex and rare carbohydrate compounds, which are available to clients through an on-line catalogue business. The acquisition of Dextra expands significantly VASTox’s scientific knowledge and capabilities in the high-value area of carbohydrate chemistry. Carbohydrate molecules are fundamental to life and bring significant value to drug discovery by potentially increasing the efficacy of existing drugs while also being sources of new therapeutics.
Following the acquisition of Dextra and the deal in December 2006 for key assets of MNL Pharma, VASTox now has access to the world’s leading experts on carbohydrate chemistry as it becomes the global leader in this commercially underexploited area of the drug discovery industry. John Fromson, PhD, Executive Chairman of Dextra, commented: “We are delighted that Dextra will be joining forces with VASTox and are excited about the scientific, commercial and financial input VASTox can offer to developing our combined offering for enhancing the drug discovery and development process. Our scientists look forward to being part of VASTox and working towards realising the full potential of carbohydrates in the pharmaceutical industry and developing this world-class business.”
Following this announcement, VASTox have begun the process to find a new corporate identity, which will better reflect the business of the enlarged Company.
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For more information, please contact:
Steven Lee, PhD, Chief Executive Officer
Darren Millington, Chief Financial Officer
Tel: +44 (0)1235 443951
Citigate Dewe Rogerson
Mark Swallow / David Dible / Valerie Auffray
Tel: +44 (0)207 638 9571