By James Etheridge

BioWorld International Correspondent

PARIS ¿ The French drug discovery company Cerep SA, which has been quoted on the Nouveau Marchi in Paris since February 1998, plans to increase its capital by around EUR40 million (US$34 million) through the issue of between 400,000 and 460,000 new shares.

The issue is being managed by BNP Paribas, which will have the additional option of purchasing 40,000 existing shares to cover possible overallotments. About 80 percent of the new shares are being reserved for institutional investors in France and abroad, while the rest will be offered to the public in France. The offer opened June 6 and will close on June 18, when the price will be fixed.

Cerep¿s finance director, John Dwyer, told BioWorld International that the operation would dilute the holdings of the company¿s two largest shareholders, CEO Thierry Jean and the Lille arm of Paris-based Institut Pasteur, which each has a stake of around 9 percent. They also will be providing the secondary shares that are taken up.

Dwyer said the additional funds would give Cerep greater flexibility in managing its business, although the company has been in profit since the second half of 2000. ¿Our primary goal was self-sufficiency,¿ he said. ¿These funds will enable us to invest more in long-term drug discovery programs.¿

As well as selling its drug discovery and validation services to some 160 biopharmaceutical companies, Cerep plans to develop its own portfolio of drug candidates by stepping up its in-house research programs. Its strategy is to take drug candidates as far as Phase I, or at the very most Phase IIa, clinical trials.

Dwyer said its drug discovery expertise could be applied to most therapeutic fields and Cerep has yet to decide in what areas to concentrate its research and development effort. But he pointed to the 50-50 collaboration agreement concluded with the Belgian company Tibotec NV, of Mechelen, in June 1999 for the identification of candidate drugs to treat HIV as an example of one path its drug discovery activities could take.

At the same time, Cerep will use the additional funds for expanding its drug discovery capability in order to develop its fee-for-service activities and increase its market share. As well as expanding its high-throughput screening and pharmacological and pharmaceutical profiling capacity, it intends to harness new predictive technologies (such as proteomics, gene expression and structural biology), create new departments, especially in the area of pharmacokinetics, and strengthen support functions such as data processing and quality assurance.

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