The acquisition of GCPUL is a step towards Regen's goal of building the company into a profitable healthcare business. The move by ReGen to integrate with a contract research organisation (CRO) makes strategic sense as previous dealings with GCPUL as well as CRO's being a significant part of its expenditure in the past is sure to make this latest deal the start of many.
The consideration for the acquisition was £250 000 (€360 000) which is to be satisfied by the issue of ReGen ordinary 0.1p shares at a price determined by the mid market closing price of ReGen ordinary shares on 21 October 2004 ('Consideration Shares').
GCPUL is a contract research organisation, which focuses on innovation in measuring pain and motility of the gastrointestinal system. In the 18-month period to December 2004 revenues are expected to be just under £1 million and pre-tax profits around £50,000. GCPUL expects to achieve increases in sales revenue and margins in the year 2005 against the 18-month period to December 2004.
A spokesman for Regen Therapeutics told DrugResearcher.com: "This initial acquisition is just the start of Regen Therapeutic's plans to acquire additional assets to build up our drug development business."
"We're constantly looking to add to our portfolio and while there are no definite discussions going on right now, if the right sort of business came along we would be interested."
The acquisition of GCPUL is also intended to have synergy with existing ReGen businesses. As a drug development company ReGen's integration with GCPUL will bode well for Regen's lead compound Colostrinin, which is currently undergoing extensive clinical trials.
Percy Lomax, chairman and chief executive of ReGen stressed this development did not change the company's strategy to develop Colostrinin and its derivatives as either pharmaceutical or nutraceutical products. The growth of its medical service revenue generating business will be helpful in funding the development of Colostrinin and its derivatives.
Colostrinin, Regen's lead compound, is a proline-rich polypeptide complex produced from colostrum (a mammals first milk) and is being evaluated as a treatment for Alzheimers disease. Its mecyanism of action is complex but preliminary evidence suggests that peptides within Colostrinin act intracellularly to modulate the effects of oxidative stress.
Key areas of activity have focused on developing a greater understanding of the mode of action of Colostrinin, which in turn has enabled development of bio-assays and the identification of animal (in-vivo) models. These are crucial elements in developing an effective manufacturing process and fully evaluating the therapeutic potential of Colostrinin in Alzheimer's and other diseases.