Hostile bid gets a cold shoulder from CPEX Pharma

The board at CPEX Pharmaceuticals has rejected a hostile buyout offer of $16 a share, saying that Richard Rofe's bid undervalues the Exeter, NH-based drug delivery technology company. And at the same time the CPEX board encouraged new offers, saying it would examine all of its strategic options--including a sale, merger or a deal to cash in on royalty and milestone rights.

Rofe, one of the company's biggest investors, launched his hostile takeover effort a month ago, putting a valuation of about $40 million on the company. Rofe's move has proven to be a tonic for the share price, which has risen to $25.90 on the back of the bid. The stock price shot up 12 percent this morning. The 52-week low is $8.

CPEX has been working with drug delivery technology that enhances permeation and absorption. The company has one pact with Auxilium for the technology and has been in talks with other developers as well. RBC Capital Markets is advising CPEX on its strategy review and CPEX's board is promising a public announcement in the third quarter.

- here's CPEX's press release
- and here's the Reuters story