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December 23, 2003 - Proposed Placing

Proposed Placing of 30,000,000 New Ordinary Shares at 10p per share
Board Changes
Notice of EGM 

Cyprotex PLC today announces a proposed placing ("Placing") of 30,000,000 New Ordinary Shares representing 24 per cent. of the enlarged issued ordinary share capital of the Company, at a price of 10p per share (the "Placing Price") to raise £3.0 million gross (approximately £ 2.94 million net of expenses).

Highlights
raising £3.0 million (before expenses) by way of a Placing
the proceeds will be used to provide working capital to accelerate its marketing and sales activities in relation to its Cloe Screen™ and Cloe PK™ products including the acquisition of new equipment and the employment of new personnel to deal with the anticipated growth in turnover.
two new non-executive directors appointed
raised £810,000 on 16 December 2003 by issuing 4,500,000 New Ordinary Shares

Commenting on the Placing and Board changes, Robert Morrisson Atwater, Chief Executive of Cyprotex plc, said: "This year Cyprotex has delivered on a total of 24 revenue generating contracts with 17 companies and we expect further contracts to be delivered in the near future. A number of positive discussions with blue chip life science companies are underway alongside the further development and sale of both the Cloe Screen™ and Cloe PK™ products. We have demonstrated the effectiveness of our technology, having received validation from major biotech and pharmaceutical companies and that we can deliver high quality products effectively to customers.

"The Placing will broaden our institutional shareholder base and enhance our financial strength, particularly when we are viewed as a supplier to major pharmaceutical companies. The money raised will be used to accelerate our marketing and sales activities in relation to our Cloe Screen™ and Cloe PK™ products and will also fund the acquisition of new equipment and employment of new personnel to deal with the anticipated growth in turnover."

Michael Bourne, Managing Director of Reabourne Technology Investment Management Limited, a joint venture company owned by its senior executives and Close Brothers Group plc, which specialises in investment exclusively in the technology and biotechnology sectors, commented: "I have known Robert Atwater for a number of years now and believe him to be an excellent executive. We are very happy to be backing him in this new venture as we consider Cyprotex's technology and validation procedures to be extremely promising."

For further information:

Robert Morrisson Atwater, Chairman and CEO
Cyprotex PLC

Tel: +44 (0) 1625 505 100
rmatwater@cyprotex.com
www.cyprotex.com

Andrew Perkin, Director
MacArthur & Co. Limited
Tel: +44 (0) 20 7464 8644
andrew.perkin@macarthur.uk.com
www.macarthur.uk.com

Jonathan Retter
Durlacher Limited

Tel: +44 (0) 20 7459 3600
jonathan.retter@durlacher.com
www.durlacher.com

Media enquiries:

Henry Harrison-Topham / Heather Salmond
Bankside Consultants Limited

Tel: +44 (0) 20 7444 4140
heather.salmond@bankside.com
www.bankside.com

The Placing

The proposed placing ("Placing") of 30,000,000 New Ordinary Shares representing 24 per cent. of the enlarged issued ordinary share capital of the Company, at a price of 10p per share (the "Placing Price") to raise £3.0 million gross (approximately £ 2.94 million net of expenses). The net proceeds of the Placing will provide working capital for the Group which, in particular, will enable the Group to accelerate its marketing and sales activities in relation to its Cloe Screen™ and Cloe PK™ products including the acquisition of new equipment and the employment of new personnel to deal with the anticipated growth in turnover.

The Placing is conditional upon shareholder approval which is to be sought at an Extraordinary General Meeting of the Company convened for 16 January 2004, notice of which is set out in a circular (the "Circular") to shareholders to be posted later today.

Background and reasons for the Placing

In the Interim Report sent to shareholders in September 2003, it was stated that the Group had made significant progress in its development as an ADME focussed drug discovery and information company and had achieved its key strategic milestones for the half year under review.

In 2003 the Group has delivered on a total of 24 revenue generating contracts with 17 companies and the Board expects further contracts to be delivered in the near future. A number of positive discussions with blue chip life science companies are underway alongside the further development and sale of both the Cloe Screen™ and Cloe PK™ products. The Group has demonstrated the effectiveness of the technology, validation from major pharmaceutical and biotech companies and that it can deliver high quality products effectively to customers whilst at the same time controlling costs within budget.

The Company raised approximately £5.5 million net in the original AIM placing in February 2002 and this has, to date, provided working capital for the Group and enabled it to implement its product development, sales and marketing strategy. The Directors have recognised for some time that additional equity capital would be necessary to pursue the Company's objectives and to enable full advantage to be taken of the opportunities described above. It was announced on 16 December 2003 that the Company had raised approximately £810,000 by the issue of 4,500,000 New Ordinary Shares at a price of 18p per share. This issue of shares was made under the Directors' existing authority to allot up to 5% of the existing share capital for cash under section 95 of the Companies Act and was made to ensure that the Company had sufficient funds in the short term to continue to trade.

It is intended that the Placing will broaden the Company's institutional shareholder base and enhance its financial strength, particularly when being viewed as a supplier to major pharmaceutical companies. The net proceeds of the Placing will provide working capital for the Group which, in particular, will enable the Group to accelerate its marketing and sales activities in relation to its Cloe Screen™ and Cloe PK™ products including the acquisition of new equipment and employment of new personnel to deal with the anticipated growth in turnover. Despite the placing which raised £810,000, announced on 16 December 2003, the Company remains cash restricted and the Directors believe that the Placing is essential to safeguard the future of the Company.

The Placing

The Company is proposing to raise £3.0 million gross by the issue of 30,000,000 new Ordinary Shares at the Placing Price (representing 24 per cent. of the Enlarged Ordinary Share capital) to institutional and other investors. The Placing Price represents a discount of approximately 48.7 per cent. to the closing mid-market price of the Ordinary Shares on 22 December 2003. The net proceeds of the Placing will amount to approximately £2.94 million .The Placing is not underwritten and is conditional on the passing of the Resolutions.

The New Ordinary Shares will not be offered generally to shareholders, whether on a pre-emptive basis or otherwise. The Directors believe that the additional cost and delay which a rights issue or an open offer would entail, would not be in the best interests of the Company in the circumstances, given the financial position of the Company and the relative size of the Placing.

Application will be made for the Placing Shares to be admitted to trading on AIM and dealings are expected to commence on 21 January 2004.

Current trading

On 30 September 2003 the Company announced its Interim Report for the six months ended 30th June 2003, which showed turnover of £368,804 ,an operating loss before tax of £1.08 million and a loss before taxation of £1.07 million .The Company subsequently announced on 11 November 2003, the results of successful trials of its Cloe PK™ software.

The Group has serviced a total of 24 contracts in 2003 with a range of global pharmaceutical and biotech companies. Moreover, subsequent to extensive trials of CLOE-based products, significant contract negotiations have now reached finalisation of documents stage in relation to long-term contracts with two of the world's largest pharmaceutical companies; the management's continuing high-level discussions with other pharmaceutical and biotech majors leads to optimism that further significant contract gains will be forthcoming. Cyprotex continues to believe its products create a step change improvement in both time, cost and accuracy in the drug discovery process offering significant productivity advantages to the Pharmaceutical sector; Cyprotex's systems and facilities are designed to be highly scaleable, thereby allowing the Group to fully participate in an accelerated take-up. The Directors currently expect the Group to achieve revenues of £1.0 million in the year to 31 December 2003 and £1.9m in the following year.

Board changes

The Board is pleased to announce that two new non-executive directors will be joining the board during the course of January 2004.

Martial Lacroix is the Vice President of GeneChem, a Montreal-based venture capital group with close to Canadian $250 million under management and investments in 31 companies located in Canada, the U.S.A. and the UK. Dr Lacroix was a co-founder of BioChem Pharma Inc. and previously held a number of positions with BioChem ImmunoSystems Inc., including Director, Research and Development and Director, Quality Control. Between 1981 and 1986, Dr. Lacroix was a Professor in the Department of Virology at Institut Armand-Frappier. Dr. Lacroix received a B.Sc. and a M.Sc. in biochemistry from University of Montreal and a Ph.D. from the University of Toronto. He has authored 33 scientific publications and holds eight issued patents. Currently Dr. Lacroix is a Director on the Board of seven privately held companies.

Minhaz Manji is the Managing Director of Monteacute House Limited which builds limited service hotels under the name of Express by Holiday Inn (a franchise) of InterContinental Hotels Group. The company has a development agreement to build 15 hotels. Minhaz currently serves as the elected Chairman of Express Owners in the UK, currently numbering 80 hotels - an investment of over £600m. He also serves as a director on the advisory board of the newly formed InterContinental Group and serves on the Ethnic Minority Board of HH Prince Charles Youth Business Trust.

The Company will benefit greatly from the expertise of these two new directors. As a result of the continuing development of the Group and these new appointments, the existing non-executive directors have agreed to relinquish their appointments with immediate effect.

Share Option arrangements

Robert Atwater agreed to join the Company in August 2003 on the premise that he would be granted share options for joining the Company and further share options for successfully raising at least £2,000,000 of new funds for the Company. Subject to the passing of the Resolutions, a total of £3.81 million (excluding expenses) has so far been raised for the Company.

Consequently, the Company has entered into a Deed of Grant of Share Options, conditional on the passing of the Resolutions, in respect of 3,500,000 Ordinary Shares in consideration of Robert Atwater joining the Company and a further 3,500,000 Ordinary Shares in consideration of raising the funds referred to above. In each case the option price is 10p per Ordinary Share, a small discount to the share price at the date of Robert Atwater's appointment.

Recommendation

The directors unanimously believe that the Proposals are in the best interests of the Company and its Shareholders and unanimously recommend you to vote in favour of the Resolutions, as they intend to do in respect of their aggregate shareholding of 35,000 Ordinary Shares, representing approximately 0.04 per cent of the existing issued ordinary share capital of the Company.

A copy of the circular to shareholders issued today will be available from the Company's registered office and at the offices of Macarthur & Co Ltd, 60 Lombard Street, London, EC3V 9EA.

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