September 29, 2011 / 10:35 AM / 6 years ago

Lundbeck to make $16 mln investment in Proximagen

* Lundbeck, Proximagen enters into strategic deal

* Companies will work on CNS drug development

* Lundbeck to hold about 9 pct stake in Proximagen

COPENHAGEN, Sept 29 (Reuters) - Danish pharmaceutical group Lundbeck is to invest 10.3 million pounds ($16.1 million) in British peer Proximagen Group PLC as part of a strategic partnership, the companies said on Thursday.

Entering the deal would allow the companies to jointly use their expertise in central nervous system (CNS) drug development, the companies said in a statement.

“Proximagen has built an exciting pipeline which offers real promise in treating a number of CNS disorders,” Lundbeck’s head of research and development, Anders Gersel Pedersen said in the statement.

“This strategic partnership will provide Lundbeck with exposure to some very exciting research programmes,” Pedersen said.

As part of the deal, a committee involving experts from both companies will focus on developing three of Proximagen’s programmes, with the aim of identifying new therapies for diseases such as epilepsy, pain and inflammatory disorders, the companies said.

Lundbeck would receive certain negotiation rights in relation to these programmes, it said.

“The partnership with Lundbeck validates our strategy and represents a major step forward in realising the value of key compounds in our pipeline,” Proximagen’s chief executive officer, Kenneth Mulvany, said in the statement.

Under the deal, Proximagen will issue 5.7 million ordinary 1 pence shares (new shares) to Lundbeck at a price of 180 pence per share and at a total cost of 10.3 million pounds.

The subscription price of 180 pence represented a premium of 36 percent over the average daily closing price of Proximagen’s shares in the six month period from March 29 to September 28 of this year, the companies said.

The investment would give Lundbeck an about 9 percent stake in the company. ($1 = 0.639 British Pounds) (Reporting by Mette Fraende; Editing by Elaine Hardcastle)

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