The UK’s Renovo Group, which develops drugs for the reduction of scarring, says that it has been approached by a prospective buyer.
The Manchester-headquartered biopharmaceutical company said that “following recent press speculation and share price movement”, it was confirming that “an unsolicited preliminary non-binding approach” has been received. Renovo did not identify the buyer and added that the talks “may or may not lead to an offer being made”.
The press speculation has put Shire at the top of the list of prospective buyers, seeing as how the two companies are working together on Juvista (human recombinant transforming growth factor beta-3) which is in a European Phase III trial for the prevention and reduction of scarring. That partnership, which was signed in June 2007, saw Renovo bag an upfront payment of $75 million and equity investment of US$50 million.
Depending on how Juvista develops, Renovo is eligible to receive up to $700 million together with escalating royalties on sales. If Shire is the bidder, it would obviously not have to pay royalties but the firm would have to take on the costs associated with the aforementioned Phase III Juvista trial.
Renovo could be an attractive option for a number of companies not least because of its healthy cash reserves and at the end of last year, it had cash and equivalents of £74 million. News of a possible offer led to a 15.1% rise in Renovo’s shares to 30.50 pence.
Shire to shed jobs at US facility
Meantime Shire has announced that it plans to close its Owings Mills, Maryland plant over the next three years, a move which will result in the loss of 260 jobs.
The company noted that production at the site, where Shire’s attention-deficit hyperactivity disorder drugs Adderall XR (mixed amphetamine salts) and Vyvanse (lisdexamfetamine) are made, will be outsourced to a contract manufacturer in North Carolina.
Company spokesman Matt Cabrey told the Baltimore Sun that “our strategy at Shire, in short, does not include in-house manufacturing”, adding that the decision “is in no way related to the economic downturn”. Shire only bought the plant in 2002 from the contract manufacturer Atlantic Pharmaceutical Services for $65 million and has been unable to find a buyer for the facility, Mr Cabrey added.
