A Medical Device Daily
Commonwealth Biotechnologies (CBI; Richmond, Virginia) said it has sold 463,426 shares of its common stock subject to a $1 million put right to Venturepharm Laboratories (VPL; Beijing, China) for $2.15 a share, a 56% premium to the June 30 share price of $1.38.
CBI received $500,000 in cash and 2,229,664 of VPL's ordinary shares, which equals $500,000 of equity value, based on VPL's price of HKD 1.7469 (at exchange rate of $1/HKD 7.79) per ordinary share. The shares are listed for trading on the Hong Kong Stock Exchange.
"We have elected to exercise our put option with VPL now because the exercise price of $2.15 represents a significant premium to the current [CBI] share price. The capital raised through the put right will be used primarily to further expand and promote our new Chinese joint venture business, Venturepharm Asia," said Dr. Paul D'Sylva, CEO of CBI.
Through Venturepharm Asia, CBI recently procured two pre-clinical chemistry facilities in China to house and expand the business operations of Exelgen and Mimotopes, its small molecule and peptide subsidiaries. The company has recruited scientific staff and expects to commence operations in the China facilities in 3Q08.
"We believe the cost and capacity advantages of Venturepharm Asia provide significant growth potential for CBI," D'Sylva said. "The additional funds raised through exercising our put right will contribute to bringing our new facilities on-line and to launching a marketing campaign to promote our expanded service offerings to the pharmaceutical and biotechnology industries."
CBI is a growing contract research organization that offers an integrated range of comprehensive services for the discovery and development of therapeutics, vaccines and diagnostics.