Cyprotex agrees £2.8m US deal

AIM-listed North West pharmaceutical company Cyprotex has agreed a £2.8m cash and shares deal for a US drug research business.

Macclesfield-based Cyprotex, which develops software that large pharmaceutical firms use to predict what the effect of their medication will be on a patient, is buying Apredica for £1m cash and 44.7 million new Cyptrotex shares.

The deal has been recommended by both boards and does not need shareholder approval.

Cyptrotex said it would give the combined company operations in the world’s largest centres of drug discovery – the US and Europe. Apredica recently acquired the intellectual property of a toxicology specialist, Cellular Systems Biology. Cyprotex said this would give it a foothold in a new market and it is also opening a toxicology lab in Macclesfield in October.

Dr Anthony Baxter, Cyprotex’s chief executive described the deal was revenue and earnings enhancing and said it would be “highly valuable” to shareholders.

He added: “The combination of businesses offers our customers, both existing and new, a greatly enhanced ADMET offering and scientific consulting service in this vital area of drug discovery services.”

Apredica had earnings before interest, tax, depreciation and amortisation of £100,000 on sales of £1m in the year to December. Its founders Dr Katya Tsaioun and Douglas Bates will join Cyprotex’s board as chief scientific officer and chief marketing officer respectively.

Law firm DWF’s Manchester corporate team advised Cyprotex on the deal.

Fank Shephard, corporate finance partner at DWF in Manchester led the team advising Cyprotex with support from partner James Sheridan and solicitor Kelly Harvey.

Mr Shephard, who recently joined DWF after quitting Halliwells, said: “I have worked with Cyprotex for over five years and am delighted to continue that relationship at DWF.”