PharmAust seals US deal

Nedlands-based pharmaceutical company PharmAust Ltd will take a 39.5 per cent stake in Nasdaq-listed US-based Commonwealth Biotechnologies Inc in exchange for its discovery chemistry subsidiary, Mimotopes Pty Ltd.

PharmAust managing director Paul D’Sylva will become CEO of Commonwealth as a result of the deal.

The transaction is the culmination of a deal announced in July, which anticipated PharmAust would end up with between 40 and 45 per cent of Commonwealth, then worth between $8.6 million and $10.6 million when its shares were trading at $US2.84 each.

Today, PharmAust has valued the deal Mimotopes deal at $7.2 million, based on a on a 50-day Commonwealth share price average of $US2.50 per share for the 2.1 million shares.

Earlier this week, Commonwealth shares traded on the Nasdaq at $US2.10/share.

PharmAust and Commonwealth had previously signed an agreement to co-market their products, which Dr D’Sylva said at the time would offer the industry a single-point of service for early stage drug discovery and development.

Dr D’Sylva’s company acquired Mimotopes 20 months ago for what he said was a peppercorn cost as part of the divestment process of US-based multinational, Fisher Scientific International Inc.

He said the deal gave Mimotopes a valuation and provided PharmAust with control of a Nasdaq-listed enterprise with a significant existing business.

Dr D’Sylva said he was not concerned about the share price fall.

“It is not unusual for the acquiring party’s shares to go while they are making an acquisition,” he said.

“We expect that to make a turn for the better.”

Dr D’Sylva was also confident of managing the Virginian-based Commonwealth, pointing out that, when combined, PharmAust and Commonwealth had 140 staff and turnover of $20 million.

“There’s plenty of managing directors that manage more than that,” he said.