Commonwealth Biotech set to acquire Mimotopes

STORY UPDATE
RICHMOND, Va.—February 12, 2007—Commonwealth Biotechnologies Inc. (CBI) announced it has completed its acquisition of all outstanding capital stock of Mimotopes Pty. In the process, Mimotopes' former Executive Director Dr. Paul D'Sylva was installed as CEO and board member of the combined company.
 
 
RICHMOND, Va.—In a move seen as the ini­tial step in a strategic repositioning of the company, Commonwealth Biotechnologies Inc. (CBI), a life sciences contract research organization and biotechnology company, has executed an agreement to acquire all of the outstanding capital stock of Mimotopes Pty. Ltd. Mimotopes, which is based in Melbourne, Australia, is a wholly owned subsidiary of PharmAust Chemistry Ltd. which is, in turn, a wholly owned subsid­iary of PharmAust Limited.
 
Mimotopes is focused on the growing market for research-grade peptides and peptide therapeutics, a market estimated to grow at 40 percent per year over the next several years. Currently, peptide technolo­gies make up about 3 percent of CBI's rev­enues. The acquisition of Mimotopes would represent an immediate boost in this rev­enue line, potentially making peptide tech­nologies the source of 30 percent of CBI's revenues. If completed, this transaction will represent the single largest growth transac­tion in CBI's 15-year history.
 
In addition, CBI will acquire a sales team that is said to be well-versed in selling servic­es to the pharmaceutical and biotech indus­try. Mimotopes currently has U.S.-based sales offices in San Diego, Minneapolis, and Raleigh, N.C., as well as offices in the United Kingdom and Melbourne. In addition to long-standing client relation­ships built over its nearly 20-year history, Mimotopes also brings to the table key part­nerships with two major biotech and phar­maceutical entities—Invitrogen Corp. and Genzyme Pharmaceuticals—partnerships which CBI expects to foster and expand. CBI also expects new market opportunities in Australia and the Pacific Rim to result from this acquisition.
 
"The Mimotopes' client base and sales efforts are almost exclusively in the com­mercial sector, a market segment that CBI management is focused on developing as a key building block for the company's long-term growth strategy," according to Dr. Richard J. Freer, chairman and COO of CBI.
 
"The sale of Mimotopes to CBI will bring Mimotopes closer to its key clients and part­ners and facilitate its continued expansion in the USA," adds Dr. Paul D'Sylva, manag­ing director of PharmAust Limited, who will become CEO of the combined entity. "Mimotopes and CBI offer complimenta­ry drug discovery products and services, which when combined will deliver measur­able revenue and cost synergies and create a stronger, more profitable business."
 
As consideration for the transaction, CBI will issue 2,150,000 shares of CBI common stock to PharmAust Chemistry Ltd.. As a result, PharmAust Limited, through that subsidiary, will hold a 39.5 percent equity position in CBI. CBI has obtained an initial, independent, third-party fairness opinion of this transaction, which deemed the trans­action to be fair from a financial point of view to the shareholders of CBI. An updated fairness opinion will be provided prior to closing.


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