BioWorld International Correspondent

LONDON - Cyprotex plc is raising £3 million (US$5.1 million) through the placing of 30 million shares, equivalent to 24 percent of the enlarged equity, at 10 pence per share, in a move to accelerate the marketing and sales activities for its in silico ADME drug screening products.

The 10 pence price is a heavy 48.7 percent discount to the company's share price of 19.5 pence on Dec. 22, the day before the placement was announced. The £3 million placement follows on the heels of an emergency placing of 4.5 million shares on Dec. 16, when Cyprotex raised £810,000 to keep the company solvent.

Macclesfield-based Cyprotex has contracts with 17 pharma and biotech companies and recently received validation of its CloePK software, designed to assess the pharmacokinetics of drug candidates based on studies of 150 drugs provided by seven pharma companies.

Robert Atwater, CEO, said the placement would broaden the institutional shareholder base and enhance the company's financial strength.

"We have demonstrated the effectiveness of our technology, having received validation from major biotech and pharma companies," he 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."

Cyprotex was founded in April 1999 and raised £5.5 million when it joined London's Alternative Investment Market in February 2002. However, that flotation provoked a scandal when then-shareholder Paul Davidson placed a spread bet on how Cyprotex's shares would perform.

In attracting institutional investors in the placing (albeit at a heavy discount), the company is moving past that unsavory bit of history.

Cyprotex defended its decision not to offer any of the discounted shares to existing shareholders. It said, "The additional cost and delay, which a rights issue or open offer would entail, would not be in the best interests of the company."

In the six months ended June 30, Cyprotex had turnover of £368,000 and a loss before tax of £1.07 million.

It is in the final stages of negotiating long-term contracts with two pharmaceutical companies after the announcement in November of the successful trials of CloePK, which showed the software can estimate how long a drug stays in the body and is accurate enough to be used in the rapid selection of compounds. CloePK was more accurate at predicting outcomes than rat models of absorption, metabolism, distribution and excretion.

David Leahy, chief scientific officer, said that CloePK offers Cyprotex's partners "similar information to that obtained in a Phase I clinical trial on every compound they synthesize, at a fraction of the cost, within days, rather than years."