12 years after Pharmagene IPO Asterand plans stock market delist
Asterand says it plans to delist from the London Stock Exchange should the $9m sale of its human tissue business complete so it can concentrate efforts on selling the BioSeek division in the US.
The company which came from the merger of Pharmagene and Asterand in 2006 has been forced over the past year as it struggled to meet orders, causing it to default on loans to BioSeek, a company it acquired in 2010, and Silicon Valley Bank.
The story behind the debts starts with a $3m loan with a revolving credit line from SVB in December 2010, undertaken to help it meet the BioSeek acquisition. As a consequence of poor trading in March 2011 however, Asterand lost the ability to draw down on the revolving credit line and instead paid $2.5m to BioSeek's shareholders and met the outstanding $6m through BioSeek loan notes.
It continued to struggle to meet its targets, initiated a formal sales process in October and undertook the search for a group buyer. That wasn't forthcoming, however there was interest in the human tissue and BioSeek elements of the business.
The BioSeek deal fell through in May, but the human tissue interest continued, culminating in a $9m offer for its human tissues business in June, which the board felt was the best way forward having raised little interest from the equity markets principally because of its debts and lack of profitability.
Asterand has since received a higher bid for the human tissues business, but with money running out and its advanced negotiations with Stemgent, is recommending to shareholders to stick with the current offer.
It does mean that despite settling its debts, the remaining business, essentially BioSeek, will be hard pressed for cash and faces the spectre of administration.
Funding options for BioSeek are a sale or investment, which it believes is more likely to happen in the US and as an unlisted company. So the plan is to delist from the stock market and change its name to BioSeek.
BioSeek's BioMAP System is a cell based disease model used to generate a profile of human biological response for specific drug candidates. The platform is designed to help reduce risk at the earliest stages of research and at multiple decision points within the research and development process.
Pharmagene was established by Dr Gordon Baxter and Dr Robert Coleman in 1996. It started with equity funding worth £1.4m quickly followed by another £5m in 1997. In 2000 it raised £37m through an IPO and merged with Asterand from the US in 2006. Today Asterand's market cap sits at £1.0m.
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