Vernalis, weakened by FDA rejections, accepts £33M Ligand bid 

Close-up of handshake between person in suit and person in business shirt.
Vernalis' headquarters is slated to close, putting managerial and administrative staff out of work. (Getty Images/FS-Stock)

Ligand Pharmaceuticals is set to acquire Vernalis for the knockdown price of £33 million ($42 million). The takeover agreement comes one year after Vernalis was left reeling by a second FDA rejection in quick succession.

Vernalis’ stock price has fallen by almost 90% over the past two years amid the unraveling of its plans to bring cough-cold products to market. The British drug developer built the planned portfolio on Tris Pharma’s extended-release technology and scored an early success in 2015 when Tuzistra XR came to market. However, the wheels came off last year when the FDA rejected CCP-07 and CCP-08.

The company had originally planned to refile for approval of the drugs within months but ended up shuttering its U.S. commercial operation and paying Tris $10 million to terminate their agreement. In March, Vernalis began seeking offers from companies interested in buying the business.

Training Course

BioBasics: Biotech For The Non-Scientist

BioBasics: Biotech for the Non-Scientist is a two-day course for those who want to better understand the science driving the industry. The course starts with basic scientific concepts and quickly delves into the causes of genetic and infectious disease and the therapeutic strategies used to mitigate disease. The latest innovations in immunotherapies, gene therapy, checkpoint inhibitors, CAR-T and more are explained.

Ligand, a Nasdaq-traded biotech, answered the call. Vernalis’ board and shareholders, who hold 67% of the company, have signed off on a £0.062-a-share bid. The company’s stock traded around 5.5 pence for most of the past few weeks but has been lower in the recent past. Ligand’s bid is 46% higher than Vernalis’ share price before the British company said it was seeking offers.

If the deal goes through, Ligand will get quite a lot for a small outlay. While Vernalis’ cough-cold unit imploded, the company still has eight programs partnered with companies including Celgene and a 70-person R&D team in Cambridge, England. Vernalis also has £27 million in cash.

Ligand thinks Vernalis’ existing agreements and its as-yet-unpartnered early-stage programs could be a source of income in the years to come. Equally, Ligand wants to use the U.K. base it will gain in the takeover to support further investment and acquisition activities in the country and the rest of Europe. 

That said, Ligand plans to make some cuts. With Ligand planning to cancel Vernalis’ stock listing, the British company’s headquarters is slated to close, potentially putting all its managerial and administrative staff out of work. Ligand also plans to make some cuts at the Cambridge R&D site.

Suggested Articles

IRhythm’s ECG patch was able to improve atrial fibrillation diagnoses and lower numbers of ER visits by shifting patients to outpatient settings.

Cold Genesys is developing its lead asset as a single agent and in combination therapies and has taken it through phase 2 in bladder cancer.

Dermira has generated evidence that its treatment for moderate-to-severe atopic dermatitis can pose a challenge to Regeneron and Sanofi’s Dupixent.