Phoqus Partner Fund Raising

RNS Number:6957Z
Biofusion PLC
05 July 2007


For immediate release                                                5 July 2007



                                 BIOFUSION PLC
                         ("Biofusion" or "the Company")

  DIURNAL'S COLLABORATION PARTNER PHOQUS TO RAISE #5M TO PROGRESS CHRONOCORTTM
                       THROUGH PHASE III CLINICAL TRIALS


Biofusion plc (AIM: BFN), the university IP commercialisation company that turns
world class research into business, is today pleased to note that Phoqus Group
plc ("Phoqus"), the oral drug delivery and development company that is working
in collaboration with Biofusion's subsidiary company Diurnal Limited
("Diurnal"), the Sheffield-based drug development company, intends to raise
approximately #5 million (gross) to progress Chronocort(TM), a controlled
release formulation of hydrocortisone to treat adrenal insufficiency, through
Phase III pivotal clinical trials. Chronocort(TM), which has European Orphan
Medicinal Product designation, is being developed in collaboration with Diurnal
and is expected to be available on the market at the end of 2009. Diurnal, in
which Biofusion holds an equity 60% stake, expects Chronocort(TM) to generate
significant royalty revenues in a market believed to be worth in excess of #100
million.

Chronocort(TM) is a modified release formulation of hydrocortisone that will 
treat adrenal insufficiency (hypocortisolism), where the adrenal gland is unable 
to produce adequate amounts of cortisol in response to stress, and congenital
adrenal hyperplasia, a serious genetic disorder caused by the deficiency of an
enzyme responsible for cortisol production.

The Chronocort(TM) product is designed to mimic the natural rhythm of hormone
levels in the body, which is considered important in controlling disease
symptoms, and reducing unwanted side effects.

Commenting on this announcement, David Baynes, CEO of Biofusion, said: "As the
majority shareholder in Diurnal this is excellent news for Biofusion. Chronocort
(TM) has the potential to generate significant revenues for Biofusion over the
next ten years and we believe this will be the first of a number of products
that will be developed utilising Diurnals intellectual property. The continued
development of Chronocort(TM) demonstrates the value of intellectual property
being created within the Biofusion portfolio."

Professor Richard Ross, founder director of Diurnal Limited, said: "We are
delighted to be working in collaboration with the first class research and
development team at Phoqus and to be progressing the Chronocort(TM) product
through Phase III pivotal clinical trials. There is a serious unmet medical need
surrounding the symptoms of adrenal insufficiency and I am extremely positive
that the product will be welcomed to the market with significant demand from
patients and healthcare professionals."


The press release issued by Phoqus Group plc follows in full below:

West Malling, UK--Phoqus Group plc (AIM: PQS) ("Phoqus" or the "Company"), the
oral drug delivery and development company, today announces a proposed
fundraising to raise #5.0 million ($10.1 million) net of expenses by way of a
Placing of new Ordinary Shares to UK institutional investors and a management
subscription. The Placing is fully underwritten by the Company's nominated
adviser, Nomura Code Securities Limited.

The Fundraising is conditional, inter alia, on the approval of Shareholders. A
circular convening an EGM of the Company, which is expected to take place on 26
July 2007, is being posted to Shareholders. Application will be made to the
London Stock Exchange for the new Ordinary Shares to be admitted to trading on
the AIM market of the London Stock Exchange. It is expected that Admission will
become effective and that dealings on the new Ordinary Shares will commence on
27 July 2007.


PLACING HIGHLIGHTS AND STRATEGIC UPDATE

   *Phoqus to raise approximately #5.0 million ($10.1 million) net of
    expenses by way of a conditional fundraising to certain new and existing
    Shareholders of 10,409,300 new Ordinary Shares at an issue price of 50 pence
    per new Ordinary Share
   *The funds raised will be used to progress the in-house development of
    Chronocort, the Company's product for the treatment of congenital adrenal
    hyperplasia ("CAH") and adrenal insufficiency ("AI"), through pivotal Phase
    III clinical trials
   *The funds will also be used to provide the Company with the financial
    resources to implement its new strategy of developing in-house novel
    therapeutic products targeting unmet medical needs using its proprietary
    delivery technologies

Commenting on the proposed Placing, Dr. Richard Mason, Chief Executive of
Phoqus, said:

"We are delighted to have the on-going support of our strong list of existing
investors and to welcome new very high quality investors to the Company. This
fundraising will allow us to progress our first major in-house product
opportunity, Chronocort, through its pivotal Phase III clinical trials."

"Having conducted a strategic review, we have decided to focus the Company's
strategy on the development of novel therapeutic products that meet real and
significant unmet medical needs. Chronocort is an excellent example of our
ability to do this, using our advanced drug delivery technologies to improve or
change the way that drugs behave in the body. We look forward to using these
technologies at Phoqus to generate a valuable new pipeline of products able to
bring significant benefits to patients."


For further information about Biofusion, please contact:

Biofusion
David Baynes / Stuart Gall                                +44 (0) 114 275  5555

Buchanan Communications
Lisa Baderoon / Mary-Jane Johnson / Catherine Breen       +44 (0)20 7466  5000


About Biofusion

Biofusion was established in 2002 to commercialise university-generated IP.
Biofusion has signed long term agreements with two of the UK's top ten research
intensive universities (University of Sheffield and Cardiff University) giving a
combined R&D spend attributable to Biofusion of approximately #114 million a
year.

Biofusion's first agreement was a ten-year exclusive arrangement with the
University of Sheffield for the commercialisation of IP owned by the University
in the area of medical life sciences. Biofusion has shareholdings in a portfolio
of 16 Sheffield University spin-out companies including Asterion, Axordia,
Biohydrogen, Lifestyle Choices, Diurnal and Phase Focus. The University of
Sheffield was ranked 5th in the UK for the quality of its life sciences research
and will be spending an estimated #0.5bn of research funding over the lifetime
over the life of the Sheffield Agreement.

In January 2007, Biofusion completed a long-term exclusive agreement with
Cardiff University, to commercialise 100% of all Cardiff University's
research-generated IP. Biofusion has shareholdings in a portfolio of seven
Cardiff University spin-out companies including Abcellute, Q-Chip and Cardiff
Protides. Cardiff University was ranked 7th in the UK in the most recent
research rankings and will be spending over #1.0bn of research funding over the
lifetime over the life of the Cardiff Agreement.


About Diurnal

Founded in November 2004, Diurnal has already entered into an agreement to
develop a tablet that delivers hydrocortisone in a manner that mimics the normal
physiological circadian rhythm. This clearly defined rhythm, with high levels in
the morning and low levels at night, is lost in patients with adrenal
insufficiency. Current therapies are steroid-based, and cannot adequately
control the condition, so the Diurnal management team believes that their
product should offer a much needed improvement in treatment for patients with
congenital adrenal hyperplasia.

This product is being developed by Phoqus, a UK drug delivery company, which has
an exclusive licence of the 'delayed and sustained release therapy' patent. In
2005 Diurnal received Orphan Medicinal Product designation for this product from
the European Medicines Agency, which affords 10 years of market exclusivity
after the grant of a marketing authorisation in Europe. The product has
successfully completed Phase 1 clinical studies.

Diurnal anticipates that the new product will provide a more efficacious
therapy, with improved compliance from patients.





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            The company news service from the London Stock Exchange

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