Under fire, Cypress pledges $33M to acquire CNS programs

Cypress Bioscience isn't letting any unwelcome attention from hedge fund operator Ramius stop it from doing new deals to beef up its CNS pipeline. Just a day after Ramius let loose with another hostile barrage aimed at the departure of an independent Cypress director, the biotech company committed to pay up to $33 million to license in a pair of new programs for autism and smoking cessation.

San Diego-based Cypress (CYPB) is forking over $750,000 upfront and committing to up to $27 million more in milestones to acquire the patents and technology for Marina Biotech's autism drug Carbetocin. Cypress takes on the development responsibilities for the drug while penciling in a royalty payment to Marina for any subsequent sales. And Cypress paid $5 million as an upfront to Alexza for a smoking cessation technology, and electronic multidose delivery technology which allows users to inhale nicotine. Alexza stands to gain a $1 million milestone and a 10 percent interest on any subsequent sale or licensing pact.

CEO Jay D. Kranzler called both deals a sign of the company's success at building its CNS pipeline. "The electronics embedded within (Alexza's) Staccato delivery system allow for the programmed, over-time reduction of nicotine intake, and may ultimately lead to better management of nicotine cravings and sustained smoking cessation. Given that the vast majority of smokers trying to quit using existing therapies relapse within six months, we see great potential in this novel technology and we are excited about this transaction."

Earlier this week Ramius Value and Opportunity Advisors reiterated their eagerness to complete a $160 million buyout of Cypress, but the biotech won't budge from its refusal to take the deal. Ramius is seeking a meeting with Cypress's independent directors, calling the departure of Jean-Pierre Millon as at worst "symptomatic of a truly dysfunctional board that continues to act without regard to the best interests of shareholders."

- check out the Cypress release on the autism deal
- here's the release on the smoking cessation pact
- read the report from the Wall Street Journal
- and here's the story from Xconomy