* Says in contact with several parties, upbeat on deal
* Hopes to have news for shareholders in coming weeks
* Board says Paladin does not value Cold-FX adequately
(Adds details from third paragraph)
By Pav Jordan
TORONTO, Aug 24 Afexa Life Sciences Inc
FXA.TO, maker of Cold-FX, Canada's most popular
over-the-counter flu medicine, is optimistic it can find a
white knight to block a C$56.7 ($57.3 million) hostile bid from
Paladin Labs PLB.TO.
Afexa Chairman Bill White told Reuters in an interview on
Wednesday that the company has held talks with several
interested parties, but he declined to be more specific.
"I am not going to speculate that it (an alternative deal)
will happen," said White. "But I can tell you I am quite
optimistic based on the number of meetings we are having and
the kind of interest that we're having."
Growing competition for access to approved and marketable
drugs have bolstered merger and acquisition activity in big
pharma as well as specialty pharma in North America.
Montreal-based Paladin is offering 55 Canadian cents a
share or 0.013 of a Paladin share for each Afexa share it does
not already own, valuing the entire company at C$56.7 million.
It is bidding separately for Labopharm Inc DDS.TO, a Canadian
biotech company specializing in controlled-release drugs, in a
friendly deal worth C$20 million.
Afexa's board said on Tuesday that Paladin's Aug 10 offer
undervalues the Edmonton, Alberta-based firm, which had been
buying back shares to boost its stock value.
Paladin said last month it had accumulated almost 15
percent of Afexa. After the two sides failed to reach a
friendly arrangement, Afexa adopted a poison-pill defense, and
started seeking bidders willing to pay more than Paladin.
White said on Wednesday he had to get back to shareholders
before the Paladin bid expires on Sept. 15.
"We've had really good success in terms of people who we
have reached out to as well as incoming interest," White said
"We're aggressively pursuing these alternatives and believe
that we'll be able to bring something to shareholders that
allows them to see the Paladin offer in the light that we do as
well as other opportunities to maximize value."
Cold-FX is practically a household name in Canada and the
company plans to sell the cold remedy in China, Japan and the
White said Afexa has held discussions with partners as it
evaluates most effective way to bring the product to market in
China as soon as possible. He could not provide a timeline for
when it could hit supermarket shelves there.
He said Afexa's Coldsore-FX, launched in Canada in recent
months, appeared to be doing well, with retailers stacking
shelves ahead of the cold sore season in the autumn.
"From a board point of view, it is pretty clear the current
offer is not even valuing Cold-FX in Canada appropriately,"
White said of the product that is its top revenue generator.
(Reporting by Pav Jordan; editing by Janet Guttsman)