The board at Canadian oncology specialist YM BioSciences says it is unimpressed by an unsolicited offer to buy the holding company BBM.

YM said that a proposal has been made by BBM to acquire the company at a price of $0.50 per share or around $29 million. However chief executive David Allan said “we do not believe that an offer at this price would appropriately value the company's assets".

Nevertheless, “as a matter of its fiduciary responsibility to shareholders”, Mr Allan said that the board will review and consider any formal offers it receives". YM’s shares have been languishing of late, and the offer from BBM, formerly a telecommunications engineering and service company, represents a premium of over 80%.

YM believes it is undervalued because, in addition to having cash of more than C$52 million at the end of the third quarter, it has two valuable products in its pipeline. It owns the rights to inhaled AeroLEF, which is described as “a unique approach” to the delivery of fentanyl for the treatment of patients with acute pain which is being prepared for late stage trials.

Also the company is the licensee for the EGFR-targeting drug nimotuzumab, for most of the major market territories including Japan, Europe and North America. Nimotuzumab, which is seen as a potential competitor to ImClone BioSystem’s Erbitux (cetuximab), is being advanced in several Phase III trials by YM's licensees, including Germany’s OncoScience.

YM believes it has sufficient cash resources “to materially further advance nimotuzumab”, which is already available in a number of countries, over the next 24 months.