A Medical Device Daily
CNS Response (CNSR; Costa Mesa, California) reported the completion of its reverse merger into publicly held Strativation (Los Angeles). The combined company will operate as CNS Response, Inc. under the leadership of the CNSR management team and will trade on the Over-the-Counter Stock Market under the symbol CNSO.
CNSR said the merger creates a company “focused on the first proven neurophysiologic biomarker system for psychiatric treatment and CNS drug development.”
CNSR’s business is focused on the commercialization of a patented statistical system that aids physicians in the identification of effective medications for patients with certain behavioral (mental or addictive) disorders. This methodology is called “Referenced-EEG” or “rEEG.”
CNSR also reported that it raised about $7 million in gross proceeds through a private placement of 5.84 million units at $1.20 per unit.
Each unit consists of one share of common stock and a five-year non-callable warrant to purchase three-tenths of a share at an exercise price of $1.80. As a result of the private placement, CNSR will have about 25 million basic shares outstanding.
Leonard Brandt, CEO of CNS Response, said that “reported open-label, retrospective and blinded prospective studies have shown rEEG to have successfully guided physician treatments of patients between 70% and 90% of the time. Most of the patients in these studies were considered treatment-resistant based on failure to respond to previous medication efforts.”
Brandt added that rEEG also affords numerous applications in CNS drug discovery and development, “a field which has been plagued by the same lack of physiologic markers as clinical psychiatric care.”
Under terms of the transaction, CNSR has committed to use its best efforts to register the privately placed shares by filing a registration atatement with the SEC)within the next 45 days.
Brean Murray, of Carret & Co., served as financial advisor to CNS Response on the reverse merger and acted as sole placement agent in the $7 million capital raise.
EduNeering Holdings (Princeton, New Jersey) has been sold to Kaplan (New York). Terms were not disclosed.
EduNeering develops technology-enabled knowledge solutions for improving business performance and assuring regulatory compliance. It said it is recognized as a pioneer in the field of technology-based learning, counting among its clients many of the world’s largest medical device and pharmaceutical and companies, the FDA, and the National Institutes of Health.
The company will be renamed Kaplan EduNeering and will retain its current management team.
“EduNeering has grown from a small training company into an important provider of knowledge solutions to the healthcare, medical device, pharmaceutical and industrial sectors,” said David Jahns, managing director with Galen Partners, a private equity firm which co-owned EduNeering along with Arena Capital Partners.
Kaplan is an international provider of educational and career services for individuals, schools and businesses.
In other dealmaking news, Express Scripts (St. Louis) reported enhancing its offer to acquire all outstanding shares of Caremark Rx (Nashville, Tennessee) for $29.25 in cash and 0.426 shares of Express Scripts stock for each share of Caremark stock. The company said it will now pay additional cash consideration of about 6% per annum on the $29.25 cash portion of its offer.
Express Scripts said the increased consideration of $0.00481 of cash per share per day will accrue beginning on April 1, through the closing date of Express Scripts’ acquisition of Caremark, or 45 days after the company receives Federal Trade Commission approval of the transaction, whichever comes first.
Express Scripts indicated that it expects to receive a “second request” from the FTC and believes its acquisition of Caremark will close no later than 3Q07.
George Paz, president/CEO and chairman of Express Scripts, said, “The pharmacy benefit management marketplace is highly competitive and will remain so after the combination of Express Scripts and Caremark. For example, more than 30 different companies provide prescription drug program management services to the Fortune 500. As a result, we believe that we can successfully complete the regulatory review process in a timely manner.”
In a letter to Caremark’s board, Express Scripts called upon its board to discuss its offer which it called superior to that made by CVS (Woonsocket, Rhode Island) to acquire Caremark.
The letter, by Paz, said, “In light of the observations made by the Delaware Court of Chancery regarding Caremark’s process, we continue to believe that it is time, for the sake of your stockholders, that we sit down and talk. It is time that you acknowledge the undeniable merits of a horizontal PBM transaction. This course is in the best interests of your stockholders. We also firmly believe that our respective stockholders, the market and plan sponsors and patients want to see us talking and moving forward as a combined stand-alone PBM.
Express Scripts provides integrated PBM services.