The Medical House takeover talks off as it signs new deal
INJECTION specialist The Medical House has called off takeover talks and also signed a £5m deal with pharmaceutical group Dr Reddy’s Laboratories for its disposable self-injectors.
Sheffield-based The Medical House (TMH) said talks were no longer being held with an unnamed party over a bid approach.
Its shares rose in April when it received a bid offer. However the group said: “The directors of TMH now believe that an offer for the issue share capital will not come from this source.
“The directors continue to see high levels of interest in TMH’s technologies and with the company’s current market capitalisation the directors believe that
interest of this kind from other parties cannot be ruled out.
“It is TMH’s intention to continue to work with clients to build a long term substantial drug delivery business.”
Under the new five-year deal with Indian group Dr Reddy’s TMH will customise its self-injectors for use with a generic drug.
Dr Reddy’s intends to launch the product in 2009-10, and TMH will receive a technology access fee for the duration of the deal.
Chairman Ian Townsend said: “We are delighted to have reached this agreement with such a well-respected company as Dr Reddy’s.
“We see this as another endorsement of our technology and it adds another project and product to our growing list, which will provide us with a diverse income stream over a number of years.
“We very much look forward to working with Dr Reddy’s and continue to be very confident on the continued success of our technologies.”
The group’s auto-injectors incorporate pre-filled syringes which can be easily used to self-administer drugs by pressing a button. The needle penetrates the skin to a pre-set depth and then automatically retracts. The device is less painful, messy and risky than normal pre-filled syringes.
Dr Reddy’s will have the option of extending its agreement with TMH after the deal expires.
In November TMH announced it had extended a similar licensing agreement with a leading global pharmaceutical company from five to six years. It also projected an increase in revenues from £27m to £34m.
