Offer Period and Business Restructuring
Renovo Group plc will host a conference call for analysts and investors to discuss this announcement at 9.00am (BST) today. The call can be accessed with the dial-in number +44 (0)20 7138 0819 in the UK, using the confirmation code 1495235. A replay of the conference call will be available for one month using the replay number +44 (0)20 7111 1244 in the UK and the replay code 1495235#.
Renovo Group plc ("Renovo" or the "Company")
Renovo Announces the End of its Offer Period and a Business Restructuring
On 6th April 2009, in response to press speculation and share price movement, Renovo (LSE:RNVO), the biopharmaceutical company developing drugs for the reduction of scarring and acceleration of healing, announced that it had received an unsolicited preliminary non-binding approach that may or may not have led to an offer being made for the Company.
The Board confirms that it is no longer in discussions with any party regarding a potential offer for the Company, and therefore no longer remains in an offer period for the purpose of The Takeover Code.
Renovo now announces it will restructure the Company to best apply its resources to the clinical development of its late stage product portfolio: Juvista, Adaprev and Prevascar. The restructuring will concentrate Renovo's activities on supporting the clinical development programmes, together with managing and partnering Renovo's products and IP assets. As a consequence, the Company will commence discussions and the statutory consultation with employees which may lead to a reduction in the headcount of the organisation by just over one third.
The Executive Directors of Renovo have voluntarily agreed to accept no pay increase this year and to defer any 2009 cash bonus awarded under the current plan to the time of reporting of the first Juvista EU PhIII trial (on schedule for H1 2011) and additionally to make the payment of this bonus contingent on a positive outcome of that trial.
The Board will be further reduced in size and Dr David Ebsworth and Dr Art Rosenthal have resigned as Non Executive Directors effective from the next Annual General Meeting. The Renovo Scientific and Clinical Advisory Board held its final meeting on 14 September 2009 and has been disbanded.
The objective of this restructuring is to focus the Company's efforts on its late stage product portfolio in order to maximise near-term value creation opportunities while minimising cash expenditure going forward. Collectively these measures should reduce internal operating costs by around 20 - 30% and are projected to result in the Company having £25m - £30m cash in hand at the time of reporting of the first Juvista EU PhIII trial in H1 2011.
Mark Ferguson, CEO of Renovo, commented "The plans to restructure Renovo have resulted from a comprehensive and thorough analysis of all our current and potential programmes. Although painful, these measures will maximise our financial flexibility as we focus on Juvista gaining approval in Europe and on other future growth opportunities. I would like to thank all the Renovo staff for their outstanding contributions to the company and the Non Executive Directors for their sound guidance and advice."
Renovo Group plc
Prof Mark Ferguson, CEO
+44 161 276 7121
David Blain, CFO
+44 161 276 7123
Tim Anderson / Lisa Baderoon / Catherine Breen
+44 (0) 20 7466 5000
About Renovo Group plc
Renovo is a biopharmaceutical product company and a leader in the discovery and development of drugs to improve the appearance of scars. Juvista (INN: avotermin), Renovo's lead drug for the reduction of scarring in the skin, has been generally well tolerated by around 1,500 human subjects and has provided statistically significant efficacy data in eight Phase 2 double blind, placebo controlled efficacy trials. The first EU Juvista Phase 3 efficacy trial in scar revision surgery is recruiting and is on track to report in the first half of 2011.
Renovo announced in June 2007 that it had signed an exclusive licensing agreement with Shire plc to develop and commercialise Juvista. The agreement covers every country in the world except the European Union, the rights to which have been retained by Renovo. Under the terms of the deal Renovo has already received an initial upfront payment of US$75 million and an equity investment of US$50 million. Contingent on the successful development and commercialisation of Juvista Renovo will be eligible for further payments of up to $700 million together with escalating royalties on sales.
Prevascar® reported statistically significant Phase 2 efficacy data for the reduction of scarring in the skin and is in formulation optimisation to further enhance efficacy. Renovo will commence a Phase 2 trial for AdaprevTM in the reduction of scarring in tendons in 2009.