offer, page-6

From The Age

Arana drug trial could pressure Cephalon to raise $318m bidAri Sharp
March 10, 2009
SHAREHOLDERS in Arana Therapeutics, upset at what they believe is a low-ball takeover offer, have had their suspicions reinforced after the company released positive data from a clinical trial.

Arana yesterday reported a strong safety result in the phase II trial for the testing of its key anti-inflammatory drug, ART621, in the treatment of psoriasis, although the results on the drug's efficacy were only moderate.

The results may make it even tougher for US bidder Cephalon to win support for its $318 million cash offer for the company, because it, rather than existing shareholders, will enjoy the benefits of the reduced uncertainty over the drug's prospects.

Cephalon is offering $1.40 per Arana share, with a further 5¢ if acceptances reach 90 per cent. Cephalon has already taken a 19.8 per cent stake in Arana.

Shares in Arana rose 3¢ to $1.425, which may put pressure on Cephalon to sweeten its bid, despite it winning the support of Arana's independent directors.

Cephalon chief financial offer Kevin Buchi said the results of the latest trial were as expected, and had already been factored in to the offer price.

"However, the question has always been whether Arana can fully fund the clinical development of this drug, competing against some of the world's biggest drug companies," he said.
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With the bid at $1.43 the market is anticipating a higher offer - mega biotech mergers happening at the moment.