Contract research organisation (CRO) Cyprotex is acquiring US-based counterpart Apredica for a total of £2.68 million, a move the UK company says will make it the largest international specialist provider of ADME (Absorption, Distribution, Metabolism and Elimination) and Toxicity services in the contract research market.
Crucially, the deal gives Cyprotex laboratory and customer service operations in the US, the world’s largest market for ADME and Toxicity (ADMET) CRO services, as well as doubling its share of the US ADMET market. Moreover, Apredica comes with the Cellular Systems Biology (CSB) and High Content Toxicology assets of US company Cellumen, which were acquired by Apredica immediately before it agreed to the Cyprotex takeover.
Based in Macclesfield, near Manchester and listed on the AIM market of the London Stock Exchange, Cyprotex was set up in 1999. It works with more than 200 clients, ranging from small biotechs to large pharmaceutical companies, providing experimental and computational ADME and pharmacokinetic support services that extend from early drug discovery through to approval submissions for clinical trials.
The acquisition of Apredica was unanimously recommended by the boards of both companies and does not require shareholder approval. The £2.68 consideration for the entire issued share capital of Apredica is a mixture of shares and cash. Cyprotex will issue 44,739,297 new ordinary shares and will make a cash payment of £1 million, £450,000 of which will be loaned back to the company for repayment over the next two years.
With headquarters in Watertown, near Massachusetts, Apredica was founded in 2006 and provides preclinical contract testing services for the evaluation and optimisation of drug candidates’ ADMET and pharmacokinetic properties early in the drug discovery process. Most of the company’s 173 customers are in the US but the client list also extends to Europe, East and South Asia, Africa, South America and Australia.
For the year ended 31 December 2009, Apredica reported earnings before interest, taxes, depreciation and amortisation (EBITDA) of £0.1 million on revenues of £1.05 million, with an annual growth rate of 72%.
Two market leaders
The combination of Cyprotex and Apredica brings together two market leaders specialising in preclinical ADMET and operations in the world’s two largest centres of drug discovery, Europe and North America, the companies noted.
There is little overlap in customer bases, while access to Apredica’s preclinical toxicology services and Cellumen’s CSB and High Content Toxicology assets will speed Cyprotex’s entry into the in vitro toxicology market, soon to be bolstered further by the company’s new toxicology laboratory in Macclesfield, they said. This facility is scheduled to open on 1 October 2010.
Cellumen is the inventor of the Cellular Systems Biology approach to in vitro toxicology, which involves analysing the response of cell and organ models to drug intervention. This led to the creation of intellectual property for next-generation reagents and multiplexed assays using Cellumen’s High Content Screening (HCS) technology.
Added to Cyprotex, the Apredica and Cellumen toxicology offerings “make the enlarged business a leader in the rapidly growing market for predictive mechanistic toxicology services, as the in vitro methods in which Cyprotex specialises are rapidly being adopted by the pharmaceutical, cosmetics, and agrichemical industries”, the two companies observed.
“The acquisition of Apredica is highly significant for Cyprotex as it creates, at a single stroke, a transcontinental ADMET services business,” commented Dr Anthony Baxter, chief executive officer (CEO) of Cyprotex. “We believe the acquisition is revenue and earnings enhancing and highly valuable to our shareholders.”
Dr Katya Tsaioun, co-founder, CEO and chief scientific officer of Apredica, is joining the combined group as chief scientific officer while Douglas Bates, co-founder and chief business officer of Apredica as well as the company’s largest investor, will become chief marketing officer of combine.