Vernalis planning offering, repurchase of frovatriptan royalties

Vernalis plc (LSE:VER) plans to raise L30 million ($46.8 million) in a placing and open offer of 39.4 million shares at 76p underwritten by Piper Jaffray. The price is a 7% discount to Vernalis' close of 81.5p on Wednesday, before the offering was announced. Shareholders are eligible to purchase 19 new shares in the open offer for every 29 shares held. A general meeting to approve the offering is slated for March 1.

Vernalis said it will use a portion of the proceeds to pay $32.6 million to Paul Capital Partners' Paul Capital Healthcare to regain full rights to the royalty stream for frovatriptan. In 2008, Paul Capital Healthcare paid EUR 18.4 million ($29.1 million) for about 90% of the royalties Vernalis receives from Menarini Group (Florence, Italy) under a licensing deal for frovatriptan in Europe and Central America. Menarini, which pays 25% in royalties on net sales to Vernalis, reported 2009 sales of EUR 32.4 million ($44.4 million) for frovatriptan (See BioCentury Extra, Monday, April 21, 2008). ...