LONDON ¿ CeNeS Pharmaceuticals plc plans to float its cognitive testing division, Cambridge Cognition, on the Alternative Investment Market (AIM) in London, before the end of year.

CeNeS did not disclose how much it is hoping to raise, but Neil Clark, finance director, said, ¿[Cambridge Cognition] is close to profit. It has a small overhead base and significant revenues; it doesn¿t need a lot of money.¿

It was decided to float the company on AIM rather than raise venture funding because this will give Cambridge Cognition more flexibility for future fund raising. ¿There have been listings on AIM, even with the current state of the markets,¿ Clark said. ¿With AIM, you are talking to almost the same people as if trying to raise venture capital, and the initial discussions say [the flotation] will be supported.¿

Cambridge Cognition has 20 staff members and had turnover of just over #1 million (US$1.46 million) in the 2000 financial year. CeNeS will retain a significant interest, but Clark said he expects this to be below 50 percent. ¿This is a great company, which will do better on its own because it is not core to our focus on pain control and central nervous system disorders.¿

In July, CeNeS, based in Cambridge, acquired Management Dynamics Cambridge (MDC), a specialist organizational psychology company it merged with its own cognition division to create Cambridge Cognition. The new company combines CeNeS¿ Cantab technology and MDC¿s occupational psychological testing expertise and offers a range of services in medical research, drug development and organizational psychology. The head of MDC, Jean Hammond, is CEO. MDC received a 13 percent stake in Cambridge Cognition as consideration.

The company¿s main product is Cantab, a computerized system for investigating the cognitive functions of patients with CNS disorders. The system is used in clinical trials to provide early stage assessments of drug efficacy. It also is used in clinical diagnosis and assessment of disorders, including Alzheimer¿s and Parkinson¿s diseases, schizophrenia, chronic fatigue and depression.

The creation of Cambridge Cognition was intended to allow further development of Cantab in the pharmaceutical field, but also will enable its potential to be exploited in other areas. CeNeS is retaining the right to use the system for its own drug development.

CeNeS also signaled further progress in its strategy of building a pharmaceutical sales business to fund its R&D, with the launch of Xevo. This treatment for post-operative pain was acquired from Nycomed Pharma earlier in 2001 and will be marketed through the sales force established in October 2000 when CeNeS acquired three products from GlaxoSmithKline plc.