Source - RNS
RNS Number : 3389R
Vernalis PLC
14 June 2018
 

 

14 June 2018

Vernalis plc ("Vernalis" or the "Company")

Termination of Tris Agreement and Update on Formal Sale Process

 

   Termination of Tris development and commercialisation agreement and transfer of Tuzistra® XR NDA

Update on 30 June 2018 projected cash

Update on formal sale process

 

Vernalis (LSE: VER) today announces the termination of its agreement with Tris Pharma, Inc. ("Tris") in connection with the ongoing closure of its US commercial operations, updated guidance on its projected 30 June 2018 cash position and an update on the formal sale process previously announced on 15 March 2018.

 

Termination of Tris Agreement

 

Vernalis has terminated its development and commercialisation agreement with Tris, with immediate effect. Under the terms of the termination, Vernalis will pay Tris $10 million in cash. In return, Vernalis is released from all future payment obligations under the development and commercialisation agreement including obligations to pay Tris milestones on development programmes. Vernalis has also transferred to Tris the rights to Tuzistra® XR including the New Drug Application ("NDA") and Tris will retain the rights to CCP-07, CCP-08, CCP-05 and CCP-06. Vernalis will be entitled to a high single digit royalty on sales of Tuzistra® XR for a ten year period and on CCP-07 and CCP-08 for a ten year period from product launch.

 

Vernalis remains responsible for all Tuzistra® XR commercial activities up to the date of NDA transfer.  In addition, Vernalis remains liable for any returns, rebates and co-pay assistance costs on stocks of Tuzistra® XR with wholesalers or pharmacies at the date of transfer. Vernalis has deposited $3 million into an escrow until 30 June 2020 to fund these returns, rebates and co-pay assistance costs (with any remaining balance at 30 June 2020 returned to Vernalis and with Vernalis remaining liable for these specific liabilities in excess of this $3 million).

 

The proposed termination of the Tris agreement constitutes an action falling within Rule 21.1(a) of the City Code on Takeovers and Mergers (the "Code").  Under Rule 21.1(c)(iii) of the Code, the Panel Executive has agreed to disapply Rule 21.1(a) of the Code in relation to the proposed termination of the Tris agreement on the basis that shareholders of the Company holding shares carrying more than 50% of the voting rights of the Company stated in writing that they approved the proposed action and would vote in favour of any resolution to that effect proposed at a general meeting.

 

Projected Cash at 30 June 2018

 

Following settlement of a significant proportion of US closure costs and termination of the Tris agreement as outlined above, we are able to provide updated guidance on our projected 30 June 2018 cash position. After the above payment to Tris and funding the escrow account, we project a cash balance of £26 million to £27 million at 30 June 2018.

 

Update on Formal Sale Process

 

On 15 March 2018, the Company announced that as part of its strategic review, it had decided to seek offers for the Company and that the Panel had agreed that any discussions with third parties may be conducted within the context of a "formal sale process" (as referred to in the Code).

The Company is pleased to confirm that it has received several approaches, directly and through potential buyers contacted by Evercore as financial adviser to the Company. Potential buyers wishing to participate in the formal sale process were required to sign a non-disclosure agreement, after which they received further information on the Company.  Potential buyers then submitted non-binding proposals to Evercore for the Board's consideration which comprised expressions of interest for the Company as a whole as well as for parts of the Company. As a result, the Board is now engaged in detailed discussions with certain parties about the sale of the Company (whether as a whole or in parts), with the aim of concluding this activity before 30 September 2018 as previously communicated in our announcement dated 15 March 2018.   

 

As previously communicated, the Panel has granted a dispensation from the requirements of Rules 2.4(a), 2.4(b) and 2.6(a) of the Code such that any interested party participating in the formal sale process will not be required to be publicly identified under Rules 2.4(a) or 2.4(b) and will not be subject to the 28 day deadline referred to in Rule 2.6(a) of the Code for so long as it is participating in the formal sale process.

 

There can be no certainty that an offer will be made, nor as to the terms on which any offer will be made.

 

The Board of Vernalis reserves the right to alter or terminate the formal sale process at any time and in such cases will make an announcement as appropriate. The Board of Vernalis also reserves the right to reject any approach or terminate discussions with any interested party at any time.

 

 

Enquiries:

 

 

 

Vernalis plc:

+44 (0) 118 938 0015

Ian Garland, Chief Executive Officer

David Mackney, Chief Financial Officer

 

 

Canaccord Genuity Limited (Nominated Adviser and Joint Broker):

+44 (0) 20 7523 8000

Henry Fitzgerald-O'Connor

Emma Gabriel

 

 

FTI Consulting (Financial Communications):

+44 (0) 20 3727 1000

Ben Atwell

Simon Conway

Stephanie Cuthbert

 

 

Evercore (Financial Adviser):

+44 (0) 20 7653 6000

Julian Oakley

Alan Beirne

 

 

Evercore Partners

 

Evercore Partners International LLP, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as financial adviser exclusively for Vernalis and no one else in connection with the matters referred to in this announcement and will not regard any other person as its client in relation to the matters referred to in this announcement and will not be responsible to anyone other than Vernalis for providing the protections afforded to clients of Evercore Partners International LLP, nor for providing advice in relation to the matters referred to in this announcement.

 

Notes to Editors

 

Vernalis is a revenue generating, pharmaceutical company with significant expertise in drug development. The Group has two approved products: Moxatag®, a once-daily formulation of the antibiotic, amoxicillin, indicated for the treatment of tonsillitis and/or pharyngitis secondary to Streptococcus pyogenes in adults and pediatric patients 12 years and older; and frovatriptan for the acute treatment of migraine. Vernalis has also nine programmes in its NCE development pipeline in addition to significant expertise in fragment and structure based drug discovery which it leverages to enter into collaborations with larger pharmaceutical companies. The Company's technologies, capabilities and products have been endorsed over the last five years by collaborations with leading pharmaceutical companies, including Asahi Kasei Pharma, Biogen Idec, Daiichi Sankyo, Endo, GSK, Genentech, Lundbeck, Menarini, Novartis and Servier.

 

For further information about Vernalis, please visit www.vernalis.com 

 

Vernalis Forward-Looking Statement

 

This news release may contain forward-looking statements that reflect the Company's current expectations regarding future events including the clinical development and regulatory clearance of the Company's products, the Company's ability to find partners for the development and commercialisation of its NCE pipeline, and the Company's ability to find partners for the commercialisation of Moxatag®. 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 strategies, the applicability of the discoveries made therein, the successful and timely completion of clinical studies, the uncertainties related to the regulatory process, the ability of the Company to identify and agree beneficial terms with suitable partners for the commercialisation and/or development of its products, as well as the achievement of expected synergies from such transactions, the acceptance of Moxatag®, frovatriptan and other products by consumers and medical professionals, the successful integration of completed mergers and acquisitions and achievement of expected synergies from such transactions, the ability of the Company to exit or renegotiate contracts on reasonable terms and achievement of expected synergies from such transactions and the ability of the Company to identify and consummate suitable strategic and business combination transactions.

 

Rule 26.1 Disclosures

 

A copy of this announcement will be made available (subject to certain restrictions relating to persons resident in restricted jurisdictions) on Vernalis's website at www.vernalis.com by no later than 12 noon (London time) on the business day following the release of this announcement in accordance with Rule 26.1 of the Code. The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement. The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

 

Dealing Disclosure Requirements

 

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

 

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8 of the Code. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

 

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3 of the Code.

 

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4 of the Code).

 

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified.

 

You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

 

 

 


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