Cyprotex acquisition of Apredica includes assets from Cellumen

Combination expands presence in North America and in the fast-growing predictive toxicology market

Lloyd Dunlap
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MACCLESFIELD, U.K.—Cyprotex PLC, a contract research organization (CRO) specializing in the preclinical ADME1 assessment of drug candidates, has agreed to acquire the entire issued share capital of Apredica LLC, a Watertown, Mass.-based CRO specializing in preclinical ADME and toxicology assessment.  

Immediately preceding Cyprotex's acquisition of Apredica, Apredica acquired the intellectual property and all other assets necessary for offering the Cellular Systems Biology (CSB) and High Content Toxicology services previously offered by Cellumen Inc. The total consideration for the acquisition of Apredica is $4.25 million to be satisfied through a combination of 44.8 million new Cyprotex shares and $1.58 million in cash.  The transaction was unanimously recommended by the boards of both Cyprotex and Apredica, and does not require shareholder approval.

"The heavy stock component of the transaction was used to maintain as much cash as we could in the business," says Dr. Anthony Baxter, Cyprotex's CEO. "Apredica was confident enough to take stock and are now major shareholders with seats on the board."

The combination of Cyprotex and Apredica bills itself as "the largest international specialist provider of ADME Tox services," and Baxter says, "We took advice before we made this assertion." He points out that such services are provided by perhaps 50 companies, ranging in size from Quintiles to very small. But unlike most others, "we focus only on ADME Tox, and we think we are the largest in this segment," he says.
Baxter believes that toxicology studies are particularly vital. Ten years ago, ADME accounted for 40 percent of drug failures during trails; toxicology now represents that 40 percent, with ADME whittled down to about 10 percent.

The acquisition of Apredica's preclinical toxicology services and Cellumen's Cellular CSB and High Content Toxicology assets enhances Cyprotex's entry into the in vitro toxicology market, which will soon be further bolstered by the company's new toxicology laboratory in Macclesfield, scheduled to open this month. The new group now has operations in the world's two largest centers of drug discovery, Europe and North America.

"The U.S. location was critical," Baxter says.

The two companies have little overlap in their customer bases. In addition, Apredica's sales model relies on heavy use of the Internet, with relatively little external sales effort, while Cyprotex operates using a more traditional sales force but will now embrace web-based selling.

The Apredica and Cellumen toxicology offerings, when added to Cyprotex, make the enlarged business a leader in the rapidly growing market for predictive mechanistic toxicology services, as the in vitro methods in which Cyprotex specializes are rapidly being adopted by the pharmaceutical, cosmetics and agrichemical industries.

Also important to the acquisition was acquiring the services of Apredica CEO Dr. Katya Tsaioun, which Baxter states will significantly enhance the management team. Tsaioun, co-founder, CEO and chief scientific officer of Apredica, is a highly regarded ADME Tox expert with exceptional understanding of the current and future ADME Tox requirements of the pharmaceutical, biotechnology, agrichemical and cosmetics industries. Tsaioun will become chief scientific officer of the combined group.

Douglas Bates, co-founder and chief business officer of Apredica, is Apredica's largest investor and business strategist. Bates will become chief marketing officer of the combined group.

Lloyd Dunlap

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