Chiroscience Announces Cash Investment of 30 Million Pounds By Ascot PLC for 30% Shareholding In ChiroTech to Build an Integrated Chiral Technology and Manufacturing Business.LONDON--(BUSINESS WIRE)--Aug. 10, 1998--Chiroscience Group plc ("Chiroscience"), the emerging pharmaceuticals company, today announced that it has agreed to sell 30% of Chirotech Technology Limited ("ChiroTech), Chiroscience's chiral chi·ral adj. Of or relating to the structural characteristic of a molecule that makes it impossible to superimpose it on its mirror image. chi·ral products and services subsidiary, to Ascot Ascot (ăs`kət), town, Windsor and Maidenhead, S central England. The famous horse races instituted by Queen Anne in 1711 are held annually in June on Ascot Heath. Ascot remains an important social and fashion event, attended by the royal family. PLC ("Ascot") for 30 million pounds in cash. The companies have also agreed to enter into a formal manufacturing alliance between ChiroTech and Mitchell Cotts Chemicals Limited, Ascot's fine chemicals manufacturing subsidiary, based in West Yorkshire West Yorkshire, former metropolitan county, N central England. Created in the 1974 local government reorganization, the county largely embraced the Leeds conurbation and comprised five metropolitan districts: Calderdale, Bradford, Leeds, Wakefield, and Kirklees. , UK. ChiroTech has a leading position in the provision of chiral and specialty chemical A Specialty chemical is a chemical produced for a specialized use. They are produced in lower volume than bulk chemicals, of which petrochemicals, made from oil feedstocks, are the most common. However, both are produced in a chemical plant. products and services, ranging from technology consulting to the sale of small quantities of proprietary chemical building blocks and catalysts, through to the provision of multi-ton quantities of advanced chiral intermediates. Ascot is a group with interests in specialist and chemical engineering, including Mitchell Cotts Chemicals Limited. Mitchell Cotts has been the contract manufacturer of a number of products for ChiroTech over the last five years, including (-) lactam, one of the key intermediates used by Glaxo Wellcome plc to manufacture abacavir, their new anti-viral drug that was filed for registration in June 1998. The investment in ChiroTech by Ascot formalizes the strong commercial partnership that has been developed with Mitchell Cotts and provides ChiroTech with access to the manufacturing infrastructure required to serve its broad and growing range of customers, providing facilities from research scale to multi-ton production scale manufacturing. The manufacturing alliance will enable ChiroTech and Mitchell Cotts to promote jointly their combined technological and manufacturing strengths, essential to meeting the requirements of major companies operating in the Life Science industries, and provide ChiroTech with additional outlets for the application of its chiral technologies. Principal Terms of the Transaction The cash consideration will be paid on completion, which is expected to occur on September 1, 1998. Ascot will acquire 30% of the issued share capital of Chirotech Technology Limited. The Ascot shares will bear a preferential right to dividends from the business to the extent of 3 million pounds per annum Per annum Yearly. and will have a preferential right to the proceeds on a sale of the business. As a 70% subsidiary of Chiroscience, ChiroTech's results will continue to be consolidated in the Group's accounts. In the year ended February 28, 1998, ChiroTech recorded sales of 16 million pounds and operating profits of 7.1 million pounds. The assets and business of the drug discovery operations of the Group were transferred to a new subsidiary, Darwin Discovery Limited, on March 1, 1998, leaving only the ChiroTech business within the Chirotech company, whose net assets Net assets The difference between total assets on the one hand and current liabilities and noncapitalized long-term liabilities on the other hand. net assets See owners' equity. have been agreed at 0.8 million pounds. Reasons for the transaction and use of proceeds In reviewing the future of the ChiroTech business, the Chiroscience Board considered a number of key criteria. These included gaining access to manufacturing capability with a proven record of customer service, and creating an environment in which the company's technology-driven staff could flourish. Furthermore, the needs of the Group as a whole were considered in how to grow shareholder value, including the advantages of strengthening the balance sheet in order to provide resources for investment in other Chiroscience businesses, the Group's intent on moving into profit and the risk profile of the Group as a whole. The deal with Ascot offers a balanced solution, allowing the ChiroTech business to grow while providing the Chiroscience Group with a significant interest in this growth. At the same time, funds generated can be applied to developing the Rapigene and Chiroscience R&D businesses. The ChiroTech Business ChiroTech's sales have grown strongly over the last three years and the business achieved revenues and operating profits of 16 million pounds and 7.1 million pounds respectively for the financial year ended February 28, 1998. Its current order book has increased significantly to over 35 million pounds and it has ongoing collaborations with many of the world's leading pharmaceutical companies. These include, but are not limited to: Glaxo Wellcome plc As announced in Chiroscience's Report and Accounts in May 1998, ChiroTech has capitalized upon its 8 year collaboration with Glaxo Wellcome and secured a 25 million pounds, two year supply agreement to supply multi-ton quantities of (-) lactam for use in the manufacture of abacavir, Glaxo Wellcome's new anti-viral drug. Orders have been placed by Glaxo Wellcome which already exceed this figure and discussions are ongoing for an extension to the current supply agreement. R. W. Johnson Pharmaceutical Research Institute (a subsidiary of Johnson & Johnson) ChiroTech is to supply to R. W. Johnson multi-ton quantities of a key intermediate in the manufacturing process for a new product that is shortly to enter development. The initial order is worth in excess of 1 million pounds, and the product will be delivered in 1998 and 1999. Should the development continue successfully, this would provide further demonstration of the value of ChiroTech's technology and secure intellectual property position. Alcon (part of the Nestle group) In July 1998, ChiroTech procured an order to supply launch quantities of the active pharmaceutical ingredient, a prostaglandin prostaglandin (prŏs'təglăn`dən), any of a group of about a dozen compounds synthesized from fatty acids in mammals as well as in lower animals. , for a new ophthalmic product. This will yield between 0.8 million pounds and 2.9 million pounds over the next 18 months, dependent on whether this late stage development candidate proceeds to market. Firmenich SA Following successful commercialization of the DuPONT in-licensed asymmetric hydrogenation hydrogenation (hīdrôj`ənā'shən, hī'drəjənā`shən), chemical reaction of a substance with molecular hydrogen, usually in the presence of a catalyst. technology, ChiroTech has sold, and has orders in hand to supply, multi-kilogram quantities of the proprietary ligand ligand (lĭg`ənd), charged or uncharged molecule with one or more unshared pairs of electrons that can attach to a central metallic atom or ion to form an aggregate known as a complex ion (see chemical bond). (R,R)-Me DUPHOS to Firmenich SA, a world-leading flavor and fragrance manufacturer. Triangle Pharmaceuticals ChiroTech has entered into two research and development collaborations with Triangle Pharmaceuticals, North Carolina North Carolina, state in the SE United States. It is bordered by the Atlantic Ocean (E), South Carolina and Georgia (S), Tennessee (W), and Virginia (N). Facts and Figures Area, 52,586 sq mi (136,198 sq km). Pop. , USA, whereby ChiroTech is applying its proprietary bioresolution technology to develop cost-effective processes for the manufacture of a number of advanced chiral intermediates used in the synthesis of two of Triangle's lead anti-viral compounds. Pharmacia And Upjohn Over the past two years, ChiroTech has developed a relationship with Pharmacia and Upjohn encompassing the supply of multiple chiral products and services. These include: Tipranavir, a late-stage anti-viral protease inhibitor protease inhibitor (prō`tē-ās'), any of a class of drugs that interfere with replication of the AIDS virus (HIV), by blocking an enzyme (protease) necessary in the late stages of its reproduction. , the large scale manufacture of which makes use of ChiroTech's proprietary asymmetric catalysis catalysis Modification (usually acceleration) of a chemical reaction rate by addition of a catalyst, which combines with the reactants but is ultimately regenerated so that its amount remains unchanged and the chemical equilibrium of the conditions of the reaction is not technology; (R)-naproxen, a chiral auxiliary A chiral auxiliary is a chemical compound or unit that is temporarily incorporated into an organic synthesis so that it can be carried out asymmetrically with the selective formation of one of two enantiomers [1] [2] . supplied in hundreds of kilograms, manufactured under contract in India by Shasun Chemical and Drugs, and produced via ChiroTech's proprietary bioresolution technology. In addition to these agreements, ChiroTech's asymmetric catalyst business, ChiroCats(TM) and its chemical building block business, ChiroChem(TM), are starting to show real promise. The arrangements with Ascot do not affect any existing contracts within ChiroTech, including the agreement with Shasun Chemicals and Drugs Limited for the manufacture of (S)-naproxen and an exclusive sales and marketing arrangement with Chugai Boyeki for the Far East and Pacific Rim Pacific Rim, term used to describe the nations bordering the Pacific Ocean and the island countries situated in it. In the post–World War II era, the Pacific Rim has become an increasingly important and interconnected economic region. Region. The Board of Chirotech Technology Limited will initially consist of Dr. John Padfield as non-executive Chairman, Dr. Alan Shaw as Managing Director, Ms. Christine Soden, the Finance Director of Chiroscience, and a representative appointed by Ascot. The parties intend to appoint a new non-executive Chairman in due course to oversee the development of the ChiroTech business. Commenting, Dr. John Padfield, Chief Executive of Chiroscience said: "This is an excellent opportunity for ChiroTech because it allows the business to develop in partnership with a focused and experienced specialty chemicals manufacturer with an excellent record of customer service and with whom it already has a strong established relationship. "It provides the Chiroscience Group with considerable flexibility in the future utilization of this key asset, which is valued by today's transaction at a minimum of 100 million pounds, and allows the Group to benefit from the majority of the contribution from ChiroTech's operations and the enhancement in value afforded by the opportunities available to the business. In particular, the future for advanced chiral intermediates, including (-) lactam, is very exciting, given Glaxo Wellcome's expectations for abacavir and the new agreement with R.W. Johnson. In addition, the injection of cash into the Group's balance sheet provides further flexibility in growing shareholder value for Chiroscience's key assets." NOTES TO EDITORS Chiroscience Group plc Chiroscience Group plc is an emerging pharmaceutical company which uses its diverse technology platform to discover and develop novel medicines for improved healthcare. It is listed on the London Stock Exchange London Stock Exchange London marketplace for securities. It was formed in 1773 by a group of stockbrokers who had been doing business informally in local coffeehouses. . The Group has three principal activities: Chiroscience R&D; Rapigene; and ChiroTech. The Chiroscience R&D drug discovery and development activities are based in Cambridge and Stevenage, England, and Seattle, Washington  This page is protected from moves until disputes have been resolved on the .The reason for its protection is listed on the protection policy page. and encompasses skills from gene-based target research and molecular biology molecular biology, scientific study of the molecular basis of life processes, including cellular respiration, excretion, and reproduction. The term molecular biology was coined in 1938 by Warren Weaver, then director of the natural sciences program at the Rockefeller , through chiral-based, combinatorial, medicinal, and process chemistries, to clinical development and registration. The focus of activities is on the discovery and development of innovative small molecule drugs and related diagnostics with a therapeutic focus on cancer, inflammation, pain, osteoporosis and autoimmune diseases Autoimmune diseases A group of diseases, like rheumatoid arthritis and systemic lupus erythematosus, in which immune cells turn on the body, attacking various tissues and organs. Mentioned in: Complement Deficiencies, Premature Menopause . Rapigene is involved in the creation and provision of genomic technologies and services to partner companies and to Chiroscience's drug discovery programs. Its DNA analysis DNA analysis Any technique used to analyze genes and DNA. See Chromosome walking, DNA fingerprinting, Footprinting, In situ hybridization, Jeffries' probe, Jumping libraries, PCR, RFLP analysis, Southern blot hybridization. systems are comprised of DNA hybridization DNA hybridization Molecular medicine A technique for determining the presence of a target DNA in a sample of tissue or cells. See HLA analysis, Paternity testing, RFLP analysis. , DNA DNA: see nucleic acid. DNA or deoxyribonucleic acid One of two types of nucleic acid (the other is RNA); a complex organic compound found in all living cells and many viruses. It is the chemical substance of genes. arrays and mass spectrometry mass spectrometry or mass spectroscopy Analytic technique by which chemical substances are identified by sorting gaseous ions by mass using electric and magnetic fields. tags. Additional information on Chiroscience can be accessed on the company's home page: http://www.chiroscience.com. Ascot Plc Ascot is a Chemical and Specialist Engineering Group. Chemical Engineering comprises contract manufacturing of specialty and performance chemicals and, in Mitchell Cotts Chemicals, a range of fine chemicals and insecticides insecticides, chemical, biological, or other agents used to destroy insect pests; the term commonly refers to chemical agents only. Chemical Insecticides . In Specialist Engineering there are businesses in commercial refrigeration refrigeration, process for drawing heat from substances to lower their temperature, often for purposes of preservation. Refrigeration in its modern, portable form also depends on insulating materials that are thin yet effective. and air conditioning air conditioning, mechanical process for controlling the humidity, temperature, cleanliness, and circulation of air in buildings and rooms. Indoor air is conditioned and regulated to maintain the temperature-humidity ratio that is most comfortable and healthful. and in specialist industrial manufacturing including steel wire, work holding components and cold extrusion products.
CONTACT: Chiroscience, London
Dr. John Padfield, Chief Executive
Rebecca Iveson, Media and Investor Relations
44-1223-420-430
or
Taylor Rafferty Associates, New York
James P. Prout
212-889-4350
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