Filed by CeNeS Pharmaceuticals plc pursuant to Rule 425
Under the Securities Act of 1933
Subject Company: Cambridge NeuroScience, Inc.
Subject Company Exchange Act File No.: 0-19193
Registration Statement No.: 333-12270
THE FOLLOWING IS THE PRESS RELEASE DISSEMINATED BY
CENES PHARMACEUTICALS PLC ON NOVEMBER 16, 2000
EMBARGOED UNTIL 7.30 AM 16 November 2000
NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION IN OR INTO CANADA,
AUSTRALIA, JAPAN, GERMANY, THE NETHERLANDS, MALTA OR THE
REPUBLIC OF IRELAND
CENES PHARMACEUTICALS PLC ("CENES")
PROPOSED ACQUISITION OF CAMBRIDGE NEUROSCIENCE, INC. ("CNSI")
Listing Particulars in connection with the proposed acquisition of CNSI (the
"Acquisition") together with a circular to CeNeS shareholders seeking, inter
alia, their approval of the Acquisition at an EGM to be held at 11.00 a.m. on 8
December 2000, were posted to CeNeS shareholders on 15 November 2000.
On the same date, a proxy statement/prospectus was sent to CNSI shareholders
seeking their approval of the Acquisition at a shareholders special meeting to
be held at 10.00 a.m. (Boston time) on 15 December 2000.
PRESS ENQUIRIES:
CENES + 44 (0)1223 266 466
Daniel Roach, Chief Executive
ROTHSCHILD + 44 (0)20 7280 5000
Tony Stuart
Lynn Drummond
HOLBORN PUBLIC RELATIONS + 44 (0)20 7929 5599
John Bick
LO1:\238424\01\53YW01!.DOC\34427.0005
<PAGE>
This announcement is made in the United Kingdom and does not constitute an offer
or invitation to purchase any securities.
The issue of this announcement has been approved by the directors of CeNeS who
accept responsibility for the information contained in it. This announcement has
been approved for the purposes of section 57 of the Financial Services Act 1986
by Rothschild, which is regulated in the UK by The Securities and Futures
Authority Limited, and is acting for CeNeS and no one else in connection with
the Acquisition and will not be responsible to anyone other than CeNeS for
providing the protections afforded to customers of Rothschild nor for providing
advice in relation to the Acquisition.
A registration statement relating to the CeNeS shares offered in the Acquisition
has been filed with the US Securities and Exchange Commission. Investors and
security holders are advised to read the prospectus regarding the business
combination transaction referenced in the foregoing information, because it
contains important information. That prospectus was filed with the US Securities
and Exchange Commission by CeNeS. CNSI currently files, and CeNeS anticipates
that it will file, annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any reports, statements or
other information filed by CNSI or CeNeS at the SEC's public reference rooms in
Washington, DC, New York, New York and Chicago, Illinois. Please call the SEC at
+1 800-SEC-0330 for further information on the public reference rooms. Filings
are also available to the public from commercial document retrieval services and
at the web site maintained by the SEC at "http://www.sec.gov". US investors may
obtain a free copy of the proxy statement/prospectus and other documents filed
by CeNeS by directing such request to CeNeS Pharmaceuticals plc, Compass House,
Vision Park, Chivers Way, Histon, Cambridge CB4 9ZR, United Kingdom. Attention:
Company Secretary. Telephone +44 (0)122-326-6466.
Although not directed to persons in the United States, the following statement
is made in accordance with the US Private Securities Litigation Act of 1995.
This press release, including its Appendices, contains forward-looking
statements concerning future matters, such as the features as well as the
functions of, and markets for, products and services offered by CeNeS and CNSI
and business plans and strategies. These forward-looking statements also include
statements concerning the advantages of the proposed Acquisition; the products
and services to be offered by the Enlarged Group; the benefits of the
Acquisition with regard to CeNeS; and other statements regarding matters that
are not historical. Forward-looking statements are subject to risks and
uncertainties, and actual results might differ materially from the results
discussed in the forward-looking statements. For example, there can be no
assurance that any of the expected advantages of the Acquisition will be
realised. Factors that could cause or contribute to differences in results
include: risks associated with integration of the operations of CeNeS and CNSI;
the effect on the Enlarged Group of the failure to realise the anticipated
benefits of the Acquisition; general conditions in the businesses of the
companies, particularly the success of existing clinical trials; competitive
factors in the industry.
2
<PAGE>
EMBARGOED UNTIL 7.30 AM 16 November 2000
NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION IN OR INTO CANADA,
AUSTRALIA, JAPAN, GERMANY, THE NETHERLANDS, MALTA OR THE
REPUBLIC OF IRELAND
CENES PHARMACEUTICALS PLC ("CENES")
PROPOSED ACQUISITION OF CAMBRIDGE NEUROSCIENCE, INC. ("CNSI")
INTRODUCTION
On 23 May 2000 the boards of CeNeS and CNSI announced that they had signed a
definitive merger agreement under which CeNeS conditionally agreed to acquire
CNSI. The total consideration for the Acquisition, assuming that all CNSI
Options are exercised, is approximately US$44 million, to be satisfied in CeNeS
Consideration Shares. The Acquisition is conditional, inter alia, upon the
approval of CeNeS and CNSI Shareholders.
Bioglan Pharma, MB Venture Capital Fund INV, Prelude Trust plc, Prelude
Technology Fund II Limited Partnership, Alta-Berkeley VS by SC.V., Alta-Berkeley
VC.V., Alta-Berkeley Nordic Partners KY, ATM Global Investments Limited and ATM
Investments Limited which hold in aggregate 31.33 per cent. of CeNeS' existing
issued share capital, have given irrevocable undertakings to CeNeS to vote in
favour of the resolutions to be proposed at the Extraordinary General Meeting.
3i Group plc which currently holds 15.63 per cent. of CeNeS' existing issued
share capital has confirmed that it currently intends to vote in favour of the
resolutions to be proposed at the Extraordinary General Meeting. Alan Goodman,
Daniel Roach, Martyn Collett and Thomas Irwin who hold Ordinary Shares
representing in aggregate 0.06 per cent. of CeNeS' existing issued share
capital, have also given irrevocable undertakings to vote in favour of the
resolutions to be proposed at the Extraordinary General Meeting.
BACKGROUND TO AND REASONS FOR THE ACQUISITION
The Current Directors have a strategy of building a CNS focused
biopharmaceutical company through a combination of in-licensing, acquisition and
organic growth. The Acquisition is a part of this strategy from which the
Current Directors expect to derive the following:
o a more substantial and valuable drug discovery, research and development
portfolio
o enhanced capability for the development of new drugs
o wider intellectual property in drug discovery targeting ion channels
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<PAGE>
o increased financial strength
o a presence in the USA
A more substantial and valuable drug discovery, research and development
portfolio Following the Acquisition, the Enlarged Group will be focused on CNS
disorders and pain control.
The Enlarged Group will have a product pipeline that includes Moraxen, a novel
formulation of morphine which was launched in the UK on 25 September 2000.
Product licences for four strengths of Moraxen for the short term management of
severe cancer pain were granted by the MCA to CeNeS in June 2000.
The pipeline will have five different pain programmes: Moraxen and M6G for post
operative pain, an opioid analgesic for cancer breakthrough pain, and analgesic
tripeptides, all sourced from CeNeS, and CNS 5161 for neuropathic pain sourced
from CNSI.
The Enlarged Group will also contain a Phase II drug for the treatment of
strokes and clinical trials targeting sleep disorders (Phase II in healthy
volunteers) and substance abuse (Phase II expected to commence in Q4 2000) from
the CeNeS pipeline. CeNeS will contribute a pre-clinical research project
targeting schizophrenia, and CNSI will contribute pre-clinical research projects
targeting MS and glaucoma. CeNeS' research is currently focused on Alzheimer's
disease and Parkinson's disease, while CNSI's research is focused on MS.
A summary of the combined product pipeline of the Enlarged Group is set out
below:
<TABLE>
<CAPTION>
Source Product Candidate Status Indication Partner
------------------ ----------------------- ----------------------------- ---------------------------- ---------------------------
<S> <C> <C> <C> <C>
CeNeS Moraxen MCA approval granted UK Cancer pain Schwarz Pharma (UK
launch September 2000 marketing) Bioglan Pharma
(EU marketing)
CeNeS Moraxen Phase II Post operative pain
CeNeS Sipatrigine Phase II Stroke Glaxo Wellcome
CeNeS M6G Phase II Post operative pain
CeNeS CEE 04-440 Phase I Cancer breakthrough pain Bioglan Pharma
CeNeS CEE 03-310 Phase II in healthy Sleep disorders
volunteers
CeNeS CEE 03-310 Phase II schedule for 2000 Substance abuse
CNSI CNS 5161 Phase II scheduled for 2000 Neuropathic pain
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CeNeS CEE 03-320 Preclinical Schizophrenia
CeNeS CEE 04-421 Preclinical Inflammatory pain
CNSI GGF-2 Preclinical Multiple sclerosis Bayer
CNSI Preclinical Glaucoma Allergan
CeNeS Research Parkinson's disease
CeNeS Research Alzheimer's disease
CNSI Research Multiple sclerosis
</TABLE>
Enhanced capabilities for the development of new drugs
Following the Acquisition the Enlarged Group's research and development will
continue to focus on CNS disorders and pain control. CNSI has experience of
running clinical trials in the USA and CeNeS has been running its own clinical
trials in Europe. The Enlarged Group will benefit from combining these two pools
of expertise relating to the design and management of clinical trials in the USA
and Europe and their respective regulatory environments.
In the area of research, the Enlarged Group will benefit from more extensive
scientific facilities and staff. It will have more than 30 research scientists
based in laboratories in Cambridge, England, Norwood, Massachusetts and Irvine,
Scotland. Both CNSI and CeNeS have existing resources in electrophysiology,
medicinal chemistry and molecular biology. The combination of the two will
increase the number of internally and externally funded and contract research
projects that can be managed by the Enlarged Group.
Wider intellectual property in drug discovery targeting ion channels
Within the ion channel field both companies have intellectual property which the
Directors believe to be synergistic. The Enlarged Group will have access to
CNSI's proprietary library of more than 2,000 compounds specifically targeted to
ion channels within which there is a portfolio of 43 issued and 17 pending US
patents and CeNeS proprietary ion channel screening technology which automates
the complex process of measuring electrical currents across cell membranes.
CeNeS has filed four patents around this screening technology.
Increased financial strength
The Directors believe that the Enlarged Group will generate increased revenues
from sales of pharmaceutical products in the UK and Ireland, research and
development collaborations, drug delivery/formulation contracts, contract ion
channel and molecular biology services and through the sale of cognitive testing
products and services. The Directors believe that a company with greater
critical mass and a more diverse risk profile will be more attractive to
collaborative partners and contract/service customers.
5
<PAGE>
The directors believe that the Acquisition will increase the potential for sales
of CeNeS existing products and services in the US market. In addition, the extra
scientific resources available to the Enlarged Group will allow an increase in
the volume of business particularly in the contract electrophysiology and
molecular biology field.
The Company is of the opinion that, following the Acquisition, taking into
account the bank and other facilities available to the Enlarged Group, the
Enlarged Group has sufficient working capital for its present requirements, that
is for at least twelve months from the date of this document.
A presence in the USA
The USA is the world leader in drug innovation and is the world's most developed
biopharmaceutical market. The Directors believe that a presence amongst these
companies will enhance CeNeS' ability to form collaborative partnerships and
increase the opportunities for the CeNeS revenue generating business units.
TERMS OF THE ACQUISITION
Under the terms of the Acquisition Agreement, the total consideration payable to
CNSI Stockholders, assuming all CNSI Options are exercised, will be
approximately US$44,000,000 to be satisfied by the issue of CeNeS Consideration
Shares. Each share of CNSI Common Stock will be converted into CeNeS Ordinary
Shares at a value of US$2.25 per CNSI Share. The value of CeNeS Consideration
Shares to be issued will be calculated by reference to the average closing
mid-market price of Ordinary Shares over the 10 trading days ending on the
second trading day prior to Completion converted to US$ by reference to the
average exchange rate for each of those days. This is subject to a minimum and a
maximum price for each CeNeS Consideration Share of US$0.9586 and US$1.3915
respectively.
Based on the closing market price of an Ordinary Share of (pound)0.775 at the
exchange rate of US$1.4392:(pound)1 on 13 November 2000, the last practicable
date prior to the publication of this document, CeNeS would be required to issue
approximately 36.6 million CeNeS Consideration Shares which would represent
approximately 25 per cent. of CeNeS' Enlarged Issued Share Capital.
Any new CNSI Common Stock issued after Completion of the Acquisition on exercise
of CNSI Share Options will automatically be transferred to CeNeS in exchange for
the issue to the relevant CNSI Optionholder of CeNeS Consideration Shares
credited as fully paid. The number of New Ordinary Shares which will be issued
to CNSI Optionholders in this way will be calculated on the same basis as that
applied in calculating the number of CeNeS Consideration Shares issued to CNSI
Shareholders pursuant to the Acquisition. Assuming that all CNSI Options are
exercised after Completion CeNeS will issue to CNSI Optionholders up to a
maximum of 3,423,227 CeNeS Consideration Shares. Assuming that all CNSI Share
6
<PAGE>
Options are exercised, CNSI will receive approximately $6,300,000, in
subscription monies from the CNSI Optionholders.
The Acquisition is structured as a merger of CNSI with a US subsidiary of CeNeS.
For this purpose CeNeS formed a wholly owned subsidiary, CeNeS America, Inc.,
under the laws of Delaware, USA. At the effective time of the merger, CNSI will
merge with the subsidiary and each share of CNSI Common Stock will be converted
into CeNeS Consideration Shares on the basis described above. CNSI will continue
to exist following the merger, as a wholly owned subsidiary of CeNeS, under the
organisational documents of CeNeS America, Inc. After the merger CeNeS America,
Inc. will cease to exist. Because CNSI will continue to exist following the
merger it is termed a "reverse subsidiary merger". The officers and directors of
CeNeS America, Inc. will be the officers and directors of CNSI following the
merger. CNSI will change its name to CeNeS Pharmaceuticals Inc. upon Completion.
The CeNeS Consideration Shares will be issued free of all taxes, including SDRT
to CNSI Stockholders and will from the date of their issue rank pari passu in
all respects with the existing Ordinary Shares.
The Acquisition is conditional, amongst other things, upon:
(i) CeNeS Shareholder approval;
(ii) CNSI Stockholder approval; and
(iii) Admission of the CeNeS Consideration Shares.
CNSI Stockholder approval is expected to be given at the CNSI Special Meeting
which will be held on Friday, 15 December 2000. CNSI has agreed to use its best
efforts to have its directors and officers enter into voting agreements that
would provide that such directors and officers would vote in favour of the
merger.
Bioglan Pharma, MB Venture Capital Fund INV, Prelude Trust plc, Prelude
Technology Fund II Limited Partnership, Alta-Berkeley VS by SC.V., Alta-Berkeley
VC.V., Alta-Berkeley Nordic Partners KY, ATM Global Investments Limited and ATM
Investments Limited which hold in aggregate 31.33 per cent. of CeNeS' existing
issued share capital, have given irrevocable undertakings to CeNeS to vote in
favour of the resolutions to be proposed at the Extraordinary General Meeting.
3i Group plc which currently holds 15.63 per cent. of CeNeS' existing issued
share capital has confirmed that it currently intends to vote in favour of the
resolutions to be proposed at the Extraordinary General Meeting. Alan Goodman,
Daniel Roach, Martyn Collett and Thomas Irwin who hold Ordinary Shares
representing in aggregate 0.06 per cent. of CeNeS' existing issued share
capital, have also given irrevocable undertakings to vote in favour of the
resolutions to be proposed at the Extraordinary General Meeting.
7
<PAGE>
THE ENLARGED GROUP'S TRADING AND PROSPECTS
Since completion of the merger with Core Group plc in December 1999, CeNeS has
generated income from the sale of goods and services through:
o The sale of products for use in cognition research;
o The sale of services in the field of ion channel research; and
o The sale of services in drug formulation and drug delivery systems.
Sales of products and services from these business areas amounted to
approximately (pound)3,700,000 in the six months ended 30 June 2000.
In September 2000, CeNeS announced the acquisition of three pharmaceutical
products from GW. These products had a combined annual turnover of more than
(pound)3,000,000 for GW in the 12 month period ended July 2000 and are the first
stage in the CeNeS strategy of building a pharmaceutical sales business. The
Current Directors expect revenues from these products to contribute to CeNeS
trading figures for Q4 2000.
The Acquisition of CNSI is expected to complete in December 2000. As part of the
CeNeS ongoing growth strategy, the Directors plan to retain the facilities and
staff of CNSI as a functional business unit within the Enlarged Group. The
Current Directors see benefits from combining the skill base, intellectual
property and R&D programmes of CNSI with the existing activities of CeNeS. CeNeS
intends to develop the candidate products in the Enlarged Group's R&D pipeline
in collaboration with other companies. The Current Directors expect these
agreements to generate future income in the form of development funding,
milestone payments and royalties on future sales. CeNeS will seek to retain
marketing rights to CeNeS candidate products in the UK and Ireland. Products in
these territories will be marketed via an infrastructure built up by
in-licensing and acquiring pharmaceutical products. CeNeS will seek partners at
the earliest possible stage to generate funding to support its projects, gain
access to the expertise and experience of partners and reduce its exposure to
the inherent risk of drug development.
Following Completion of the Acquisition, the Directors expect to review the
combined R&D portfolio of the Enlarged Group in order to identify priorities for
future investment.
MANAGEMENT
David Kirk resigned as Finance Director of the Company with effect from 1 July
2000 and as a director of the Company with effect from 15 July 2000. David Kirk
was replaced by Neil Clark who prior to his appointment was Company Secretary
and Financial Controller of CeNeS. David Kirk has continued to provide
consultancy services to the Company which will terminate on completion of the
Acquisition. All the Current Directors will continue in their existing positions
in the Enlarged Group.
8
<PAGE>
Paul Charles O'Brien, Chairman of CNSI, and Harry Wilbur Wilcox, III, the former
Chief Executive Officer of CNSI have, subject to Completion, been invited to
join the Board of CeNeS as non-executive directors. The management team of the
Enlarged Group will be created from a combination of executives from CeNeS and
CNSI. Robert McBurney will continue in his role as President and Chief Executive
Officer of CNSI. The Enlarged Group's headquarters will be in Cambridge, UK.
INFORMATION ON CENES
CeNeS was created in December 1999 by the merger of CL and Core Group Plc. CeNeS
is developing drugs for CNS disorders and pain control (CeNeS Drug Development).
In addition, it has three revenue generating activities: contract development of
controlled release formulations of drugs in a range of therapeutic areas (CeNeS
Drug Delivery); contract electrophysiology and molecular biology services
(ChannelWork); and sales of products and services in cognition research (CeNeS
Cognition).
CeNeS has a strategy of building a pharmaceutical sales and marketing business
that will generate revenues to fund some of its R&D activities and build the
required infrastructure for the sale of products from CeNeS' own R&D pipeline.
CeNeS' approach is to acquire products that are already approved and also to
seek companies for acquisition with product portfolios in the CNS field. The
strategy is ongoing and CeNeS announced its first product acquisitions from GW
in September 2000. Pharmaceutical sales in the UK and Ireland are expected to
contribute to CeNeS' trading figures in Q4 2000, as CeNeS' fourth revenue
generating activity.
Since completion of the merger, CeNeS has made a number of announcements
relating to the continuing development of the Company:
o In January 2000, CeNeS entered into a joint product development and
licensing arrangement with Bioglan Pharma in the area of severe pain (CEE
04-440). CeNeS will be responsible for European marketing and sales of
drugs and Bioglan Pharma will both fund and manage the clinical and
regulatory work required. Bioglan Pharma agreed to subscribe for 1,000,000
Ordinary Shares at a price of(pound)1 per Ordinary Share. In April 2000,
this agreement was extended to include the territories of Japan, Asia and
other Pacific Rim territories. At the same time the two companies entered
into a cross-licensing agreement under which each company will have the
right to develop a drug using one of the other company's drug delivery
technologies. In addition, Bioglan Pharma was granted EU marketing rights
for Moraxen. Bioglan Pharma has subscribed for a further 7,965,866
Ordinary Shares at a price of 113p per Ordinary Share.
o On 18 February 2000, CeNeS announced that it had raised(pound)2,100,000
net of expenses, by way of an issue of 2,850,000 new Ordinary Shares at a
price of 75p per Ordinary Share.
9
<PAGE>
o In April 2000, CeNeS completed the acquisition of ExCyte, an established
molecular biology and cell engineering contract research organisation
working with a range of clients in the pharmaceutical and biotechnology
industries.
o Also in April 2000, CeNeS announced the extension of its licences from
BTG, a subsidiary of BTG Plc, to its hydrogel drug delivery technology
which forms the basis of CeNeS' Moraxen product. Under the terms of the
new licensing arrangement, CeNeS will have worldwide rights to apply the
technology to any molecule other than prostaglandins and medicinal
products for oromucosal use and BTG has waived its right to future
milestone and royalty payments on the technology. In addition, BTG
subscribed for 1,020,024 Ordinary Shares at a price of 98p per Ordinary
Share.
o In June 2000, CeNeS received its first produce licence approval. The MCA
granted product licences for four strengths of Moraxen for the short term
management of severe cancer pain.
o In September 2000, CeNeS acquired the rights to manufacture and sell three
pharmaceutical products in the UK and Ireland with a combined annual
turnover of more than(pound)3,000,000 from GW for(pound)10,000,000.
Diconal(TM)and Cyclimorph(TM)are strong analgesics that offer alternatives
to morphine in the management of moderate to severe pain. In addition to
an opioid analgesic agent, both products contain cyclizine which counters
the nausea and vomiting commonly associated with opioid analgesics. The
third product, Valoid(TM)contains cyclizine alone. Following Completion,
CeNeS will arrange for the product licences for Diconal(TM),
Cyclimorph(TM), and Valoid(TM)issued by the MCA which are currently in
GW's name to be reissued in CeNeS' name. GW has agreed to enter into a
manufacturing and supply agreement on 31 October 2000 (the "MS
Agreement"). The MS Agreement places GW under an obligation to supply the
products to CeNeS for a period expiring in February 2001. Thereafter CeNeS
will sub-contract the manufacture of the products to a third party. The MS
Agreement also provides for the supply of the actives Dipipanone HCL and
Cyclizine Base which are used in the manufacture of Diconal(TM)and
Cyclimorph(TM). GW are under an obligation to supply Dipipanone HCL until
Q2 2002 and Cyclizine Base until September 2001. CeNeS is in the process
of putting in place a sales and distribution agreement for future sale of
the products.
o On 12 September 2000, CeNeS announced that it had raised(pound)7,434,046
gross of expenses, by way of an issue of 9,065,910 new Ordinary Shares at
a price of 82p per Ordinary Share.
CENES DRUG DEVELOPMENT
CDD has clinical programmes for the treatment of pain, stroke, sleep disorders,
substance abuse and schizophrenia.
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<TABLE>
<CAPTION>
------------------------------- ---------------------------- ----------------------------------------------------------------
Candidate product Therapeutic area Status
------------------------------- ---------------------------- ----------------------------------------------------------------
<S> <C> <C>
Moraxen Cancer pain CeNeS has the benefit of licences from BTG relating to its
hydrogel drug delivery technology which forms the basis of
CeNeS' Moraxen product. The MCA granted product licences for
four strengths of Moraxen for the short term management of
severe cancer pain in June 2000
Moraxen Post-operative pain Clinical trials are ongoing to explore the potential benefits
of Moraxen in post-operative pain
Sipatrigine Stroke CeNeS has the benefit of a licence from Glaxo Wellcome
relating to Sipatrigine. A Phase II study began in December
1999, designed to provide an evaluation of efficacy using
diffusion weighted MRI, which is anticipated to be concluded
within 24 months
CEE 04-410: M6G Severe acute pain In January 2000, CeNeS
announced the acquisition from Nycomed Amersham of
clinical data to support the development of M6G.
Phase II trial in post-operative pain begun in June 2000
------------------------------- ---------------------------- ----------------------------------------------------------------
Candidate product Therapeutic area Status
------------------------------- ---------------------------- ----------------------------------------------------------------
CEE 03-310 Sleep disorders CeNeS has the benefit of licence and patent assignment
agreements with Novo Nordisk relating to dopamine D1
antagonist compounds. CeNeS is developing CEE 03-310 from
this series for the treatment of sleep disorders. A Phase II
study in healthy volunteers was completed in November 1999 and
CeNeS plans to start another Phase II study in Q4 2000
CEE 03-310 Substance abuse CeNeS is also developing CEE
03-310 for the treatment of substance abuse. A
Phase II trial is planned to begin in the US in Q4 2000
to determine whether CEE 03-310 can ameliorate
craving for alcohol
CEE 03-320 Schizophrenia CEE 03-320 is a D1 antagonist from the series of compounds
licensed from Novo Nordisk. It is structurally similar to CEE
03-310 which when administered to schizophrenic patients
showed some evidence of an improvement in symptoms. A Phase I
trial is planned to begin in Q1 2001
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CEE 04-421 Pain CeNeS has the benefit of an exclusive licence from BTG over
patents relating to CEE 04-421 which CeNeS has been developing
as a potential treatment for neuropathic pain. However, CeNeS
is reviewing its strategy as recent data has suggested that
CEE 04-421 may have greater potential in inflammatory pain
CEE 04-440 Cancer breakthrough pain In January 2000, CeNeS announced a collaborative development with
Bioglan Pharma relating to an opiate analgesic for the treatment
of severe pain such as that associated with cancer or surgery
</TABLE>
RESEARCH PROJECTS
CeNeS is conducting research into new therapeutic approaches for the treatment
of Parkinson's disease and Alzheimer's disease.
----------------------- --------------------------------------------------------
Therapeutic area Status
----------------------- --------------------------------------------------------
Parkinson's A deficit in the production of dopamine has long been
disease known to be crucial in Parkinson's disease. Current
treatments predominantly consist of L-DOPA, sometimes in
combination with other drugs, to address this deficit.
These treatments have a positive effect on the movement
disorders associated with the disease, they do not
address cognitive decline. CeNeS is evaluating D1
agonists as a new treatment approach which may address
both these important symptoms and have an improved side
effect profile
Alzheimer's disease CeNeS is exploring centrally acting antioxidants which
may be active in preventing the neurodegeneration
characteristics of this disease
CeNeS is also exploring therapeutic approaches that
prevent the formation of beta amyloid plaques in the
brain
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CENES DRUG DELIVERY
The Company's subsidiary, CDD, is based in Irvine, Scotland and houses the
Company's formulation and drug delivery scientists, a controlled drug
manufacturing and packaging facility and has expertise in clinical trials and
regulatory affairs.
CDD has five proprietary drug delivery technologies that offer various options
for the delivery of drugs. Whilst having the potential to improve the delivery
characteristics of CeNeS' own drugs, these technologies are exploited through
contract development agreements with other pharmaceutical companies.
For example, in April 2000 CeNeS announced that it had signed a drug delivery
collaboration with the pharmaceutical multinational Ares Serono, a global leader
in fertility treatments, based in Switzerland. Under this agreement CeNeS will
generate a formulation of a new fertility drug currently in development at Ares
Serono.
Sales and contract services for the first six months of 2000 were approximately
(pound)3,100,000.
CHANNELWORK
Ion channels are found in all cells and are fundamental components of the
electrical properties of nerve cells. They are linked causally with human
disease such as stroke, cystic fibrosis and sudden cardiac arrest. Therefore,
ion channel modulators may have a role in the management, prevention or cure of
such disorders.
CeNeS has developed a system which overcomes the limitations of existing
methodology used to study ion channels. CeNeS has filed patents on its system,
called AutoPatch, which generates identical data to that generated by
conventional technology. The Directors consider that it has three main benefits;
i) it is under computer control and is therefore deskilled, ii) it is one tenth
the size of conventional technology and is mechanically more robust, iii) it
removes the need for a microscope and therefore has the potential to be
miniaturised still further. In December 1998, CL won a Department of Trade and
Industry SMART Award (the Small Firms Merit Award for Research and Technology)
in competition with several other companies. The award is worth (pound)133,000
of which approximately (pound)83,000 has been received up to the half year ended
30 June 2000. The award will be put towards the development of CeNeS' AutoPatch
system.
CeNeS provides contract services using established technology to a number of
leading pharmaceutical companies, including Hoffmann-La-Roche, SmithKline
Beecham, Janssen, AstraZeneca, Pfizer and DuPont. Sales and contract services
for the first six months of 2000 were approximately (pound)166,000.
CENES COGNITION
CANTAB is a computerised system for investigating the cognitive function of
patients with CNS disorders which originated from the University of Cambridge
during the late 1980s. This database of test results from more than 2,000 people
13
<PAGE>
includes healthy volunteers and individuals suffering from, for example,
schizophrenia, Parkinson's disease and Alzheimer's disease.
CeNeS' strategy is to gain acceptance of the use of CANTAB by the pharmaceutical
industry for use in human clinical trials of CNS active drugs. There are
reported to be more than 150 ongoing Phase II and Phase III clinical trials in
the CNS field. As well as having a role in CeNeS' own drug development
programmes, CANTAB is available under licence for use in basic research and
clinical trials by universities, teaching hospitals and pharmaceutical
companies. Sales and contract services for the first six months of 2000 were
approximately (pound)500,000.
Summary financial information, extracted from the audited financial information
for the year ended 31 December 1999 and the unaudited six months to 30 June
2000, is set out below:
--------------------------------------------------------------------------------
(pound)'000 Year ended 6 months to
31 December 1999 30 June 2000
--------------------------------------------------------------------------------
Turnover 31 3,729
Operating loss (8,981) (15,915)
Loss per share (26.8p) (17.2p)
Net assets 39,596 37,479
--------------------------------------------------------------------------------
The summary financial information above includes two weeks results for CeNeS
Limited from the date of completion of the merger with Core Group plc on 13
December 1999.
INFORMATION ON CNSI
CNSI, based in Cambridge, Massachusetts, USA, is a biopharmaceutical company
engaged in the discovery and development of proprietary pharmaceuticals focusing
on nerve cell function and survival. CNSI is developing products to treat
chronic pain and neurodegenerative disorders such as multiple sclerosis and
peripheral neuropathies.
CNSI's technologies include a range of proprietary compounds known as
ion-channel blockers which act on specific nerve cells to modify their activity
or to minimise their destruction in degenerative disorders of the central
nervous system. CNSI's lead ion-channel blocker, CNS 5161, is a potent and
selective NMDA ion-channel blocker being developed to treat neuropathic pain.
CNSI is also working with protein growth factors with the aim of preventing
degeneration of, or to regenerate, nerve and glial cells. The target for this
programme is to develop Glial Growth Factor 2 (GGF2) for the treatment of MS.
CNSI has two strategic partnerships, one in each of the two areas described
above. In the ion channel area CNSI is working with Allergan, a worldwide leader
14
<PAGE>
in ophthalmic products, to discover new treatments for glaucoma. CNSI has also
partnered with Bayer to develop recombinant GGF2 for the treatment of MS.
ION CHANNELS
Ion channels are present in all cells and are responsible for the electrical
properties of nerve cells. CNSI is developing ion channel blockers to modify
nerve cell signalling or to prevent nerve cell death. CNSI's ion-channel blocker
programmes are aimed at preventing or treating glaucoma (collaboration with
Allergan), neuropathic pain (CNS 5161), spinal cord injury, Parkinson's disease,
MS, peripheral neuropathies, brain damage resulting from stroke and other forms
of brain ischemia.
Ion-Channel Blockers for Ophthalmic Disorders: Collaboration with Allergan
Glaucoma is the second leading cause of preventable blindness in the world, with
almost four million patients in the United States alone. The disease is usually
associated with increased pressure within the eye that can damage the retina and
the optic nerve and eventually lead to blindness. In November 1996, CNSI entered
into a research and development collaboration with Allergan, a pharmaceutical
company with interests in ophthalmology. The project combines CNSI's proprietary
technology in the area of ion-channel blockers and Allergan's expertise in the
global marketing of treatments for eye disease. In December 1999, the
collaboration between the two companies was extended for one year and expanded
to include pain management.
CNS 5161: Neuropathic Pain and other Neuropathic Disorders
A range of primary diseases or conditions including cancer, diabetes, HIV/AIDS
and shingles, can result in nerve damage and subsequent pain. This neuropathic
pain is difficult to treat as traditional analgesics do not provide adequate
relief for many patients. Drug treatments for neuropathic pain represent a
significant area of unmet medical need and a growing market opportunity.
Glutamate (particularly NMDA) receptors have been implicated in the induction
and maintenance of neuropathic pain in animal models and NMDA antagonists have
been shown to be effective in animal models or persistent pain.
CNS 5161 is a blocker of the NMDA ion channel and is currently in preparation
for Phase II clinical trials for the treatment of neuropathic pain.
CNSI has completed two Phase I studies of CNS 5161. Both studies were conducted
in male volunteers. The first demonstrated the safety and tolerability of
selected doses of CNS 5161 given intravenously. Data from the first study was
used to choose potentially effective doses that produced little in the way of
side effects in the volunteers. The second study examined the reduction in pain
experienced after placebo, morphine and two separate doses of CNS 5161 (0.25mg
and 0.5mg), administered on separate occasions to sixteen male volunteers. CNS
5161 at 0.5mg was found to produce a statistically significant reduction in
perceived pain as compared to either morphine or placebo.
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Other Ion-Channel Blockers for Nervous System Disorders
CNSI has applied its expertise in discovering and developing NMDA ion-channel
blockers to the synthesis and testing of compounds that block other ion
channels, such as sodium and potassium ion channels, which can contribute to
nerve cell death or abnormal nerve cell electrical activity. CNSI believes that
such molecules may have therapeutic utility in a number of acute and chronic
neurological disorders, including glaucoma, stroke, brain and spinal cord
injury, Parkinson's disease, MS and peripheral neuropathies.
To discover new treatments for preventing disorders of the CNS which arise from
brain or spinal cord ischemia and trauma, CNSI has synthesised ion-channel
blockers with enhanced potency in the environment of ischemic tissues relative
to their potency in the environment of normal tissues. CNSI believes that such
targeted ion-channel blockers could achieve efficacy with fewer unwanted side
effects.
In addition to molecules which block NMDA ion channels, CNSI has created a
library of small organic molecules which block the sodium ion channels of nerve
cells. In vitro and in vivo studies have demonstrated that sodium ion-channel
blockers can protect nerve cells from ischemic and traumatic damage and can
exert other beneficial effects, such as reducing responses to painful stimuli
and limiting the consequences of damage to nerve fibre bundles. CNSI believes
that molecules which block neuronal sodium ion channels have potential as
treatments for various forms of acute and chronic disorders of the nervous
system, including stroke, brain and spinal cord injury and pain.
As an extension to its work in NMDA and sodium ion-channel blockers, CNSI have
synthesised molecules which have the capacity to block both NMDA ion channels
and sodium ion channels. CNSI is currently conducting in vitro and in vivo
studies to test the hypothesis that such combination compounds have enhanced
efficacy in treating neurological disorders when compared to the efficacy of
compounds which block only one of these classes of ion channels. In addition,
CNSI is conducting studies with potassium channel blockers in the area of
peripheral neuropathies.
Glial Growth Factor 2 (GGF2): Collaboration with Bayer
GGF2 has the potential to prevent degeneration of, or to regenerate, nerve and
glial cells. In December 1998, CNSI entered into a collaborative agreement with
Bayer for the development of GGF2 for MS and peripheral neuropathies.
MS is a disease of the CNS that is characterised by chronic inflammation and
degradation of the myelin sheath which surrounds nerve cells and contributes to
the passing of electrical signals along a nerve fibre. This progressive
demyelination occurs at multiple sites in the brain and spinal cord resulting in
a gradual deterioration of nerve signalling and of the health of the patient.
Approximately 350,000 people in the United States and 360,000 in Europe suffer
from MS.
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GGF2 is involved in controlling the cells that form and maintain the myelin
sheath insulating nerve axons in the CNS. These cells are thought to be involved
early in the demyelination of nerve fibres seen in MS. CNSI has developed a
manufacturing process for producing GGF2 and has demonstrated its efficacy in
animal models believed to be reflective of MS.
Peripheral neuropathies comprise a collection of disorders that are
characterised by the degeneration of sensory and/or motor nerves. This
degeneration may be caused by injury, diabetes, chemotherapy, inherited
disorders and other factors. It was estimated in 1998 that in excess of two
million individuals in the United States suffered from some form of peripheral
neuropathy. The largest segments of this population are those with diabetic
neuropathies and those with chemotherapy induced neuropathies. There are, at
present, no FDA or MCA approved therapeutic agents for the prevention, reduction
or reversal of the degeneration and atrophy caused by these disorders and
injuries.
Currently, Bayer and CNSI are in the process of evaluating data from recent
studies performed by Bayer.
Infrastructure and facilities
CNSI employs 19 people of which 13 are involved in R&D. It has expertise in
electrophysiology/ion channels, molecular biology, medicinal chemistry and
clinical development.
CNSI moved into new facilities in July 2000, which include 8,000 square feet of
laboratory space and 2,000 square feet for administration functions.
Summary financial information relating to CNSI, extracted from the audited
financial information for the year ended 31 December 1999, is set out below:
-----------------------------------------------------------------------
US$'000 Year end to
31 December 1999
-----------------------------------------------------------------------
Revenues 1,443
Operating loss (4,332)
Loss per share ($0.21)
Net assets 10,016
-----------------------------------------------------------------------
PRESS ENQUIRIES:
CENES + 44 (0)1223 266 466
Daniel Roach, Chief Executive
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<PAGE>
ROTHSCHILD + 44 (0)20 7280 5000
Tony Stuart
Lynn Drummond
HOLBORN PUBLIC RELATIONS + 44 (0)20 7929 5599
John Bick
This announcement is made in the United Kingdom and does not constitute an offer
or invitation to purchase any securities.
The issue of this announcement has been approved by the directors of CeNeS who
accept responsibility for the information contained in it. This announcement has
been approved for the purposes of section 57 of the Financial Services Act 1986
by Rothschild, which is regulated in the UK by The Securities and Futures
Authority Limited, and is acting for CeNeS and no one else in connection with
the Acquisition and will not be responsible to anyone other than CeNeS for
providing the protections afforded to customers of Rothschild nor for providing
advice in relation to the Acquisition.
A registration statement relating to the CeNeS shares offered in the Acquisition
has been filed with the US Securities and Exchange Commission. Investors and
security holders are advised to read the prospectus regarding the business
combination transaction referenced in the foregoing information, because it
contains important information. That prospectus was filed with the US Securities
and Exchange Commission by CeNeS. CNSI currently files, and CeNeS anticipates
that it will file, annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any reports, statements or
other information filed by CNSI or CeNeS at the SEC's public reference rooms in
Washington, DC, New York, New York and Chicago, Illinois. Please call the SEC at
+1 800-SEC-0330 for further information on the public reference rooms. Filings
are also available to the public from commercial document retrieval services and
at the web site maintained by the SEC at "http://www.sec.gov". US investors may
obtain a free copy of the proxy statement/prospectus and other documents filed
by CeNeS by directing such request to CeNeS Pharmaceuticals plc, Compass House,
Vision Park, Chivers Way, Histon, Cambridge CB4 9ZR, United Kingdom. Attention:
Company Secretary. Telephone +44 (0)122-326-6466.
Although not directed to persons in the United States, the following statement
is made in accordance with the US Private Securities Litigation Act of 1995.
This press release, including its Appendices, contains forward-looking
statements concerning future matters, such as the features as well as the
functions of, and markets for, products and services offered by CeNeS and CNSI
and business plans and strategies. These forward-looking statements also include
statements concerning the advantages of the proposed Acquisition; the products
and services to be offered by the Enlarged Group; the benefits of the
Acquisition with regard to CeNeS; and other statements regarding matters that
are not historical. Forward-looking statements are subject to risks and
uncertainties, and actual results might differ materially from the results
discussed in the forward-looking statements. For example, there can be no
assurance that any of the expected advantages of the Acquisition will be
realised. Factors that could cause or contribute to differences in results
include: risks associated with integration of the operations of CeNeS and CNSI;
the effect on the Enlarged Group of the failure to realise the anticipated
benefits of the Acquisition; general conditions in the businesses of the
companies, particularly the success of existing clinical trials; competitive
factors in the industry.
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<PAGE>
APPENDIX ONE
DEFINITIONS
Q1, Q2, Q3, Q4 the first quarter, the second
quarter, the third quarter and the
fourth quarter of any calendar year
respectively
Acquisition the proposed acquisition of CNSI by
CeNeS through a merger of CeNeS
America Inc., a wholly owned
subsidiary of CeNeS, with and into
CNSI on the terms of the
Acquisition Agreement as described
in the announcement
Acquisition Agreement the Agreement dated as of 22 May
2000 between CeNeS, CeNeS America
Inc., a wholly owned subsidiary of
CeNeS, and CNSI which details the
terms of the Acquisition and any
amendment thereto
Allergan Allergan, Inc.
Ares Serono Ares Serono SA, now trading as
Serono SA
Bayer Bayer AG
Bioglan Pharma Bioglan Pharma plc
BTG BTG International Limited (formerly
British Technology Group Limited)
CDD CeNeS Drug Delivery Limited
CeNeS or the Company CeNeS Pharmaceuticals plc
CeNeS America CeNeS America, Inc.
CeNeS Consideration Shares up to 46,024,649 new Ordinary
Shares of 10p each in CeNeS to be
issued in connection with the
Acquisition
CeNeS Group CeNeS and its subsidiaries prior to
completion of the Acquisition
CeNeS Share ordinary shares of 10p in CeNeS
CeNeS Shareholders holders of existing ordinary shares
of 10p each in CeNeS
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CL CeNeS Limited
CNSI Cambridge NeuroScience Inc.
CNSI Common Stock shares of common stock of US$0.01
par value in CNSI
CNSI Common Stockholders holders of common stock of US$0.01
par value in CNSI
CNSI Options Options over 1,458,430 CNSI Common
Stock
CNSI Optionholder Holder of options to purchase CNSI
Common Stock under the CNSI 1991
Equity Incentive Plan
Completion Completion of the Acquisition which
shall occur immediately prior to
the filing of the certificate of
merger
Completion Date the date upon which Completion
occurs
Current Directors the current directors of the
Company
Directors or Board the directors of the Company from
time to time
Enlarged Group CeNeS as enlarged by the
Acquisition
Enlarged Issued Share Capital the issued ordinary share capital
of the Company immediately
following Completion, and assuming
that no share options in the
capital of either CL, CeNeS or CNSI
are exercised prior to Admission
ExCyte ExCyte Limited
GW Glaxo Wellcome UK Limited, the
Wellcome Foundation Limited and
Glaxo Wellcome Limited
Ordinary Shares ordinary shares of 10p each in the
Company
new CeNeS Shares the new ordinary shares of 10p each
in CeNeS to be issued in connection
with the Acquisition
New Ordinary Shares up to 46,024,649 new Ordinary
Shares to be issued pursuant to the
Acquisition
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Rothschild N M Rothschild & Sons Limited
US SEC the US Securities and Exchange
Commission
US, USA or United States the United States of America, its
territories and possessions, any
state of the United States of
America and the District of
Columbia
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APPENDIX TWO
GLOSSARY OF SCIENTIFIC TERMS
AIDS Acquired Immune Deficiency Syndrome
Alzheimer's Alzheimer's disease, a condition
resulting from specific
degenerative changes in the brain.
Symptoms can include loss of
memory, confusion, disorientation,
impaired concentration,
restlessness and anxiety
Analgesic Pain relieving drug
Antioxidant A compound which inhibits oxidation
Beta amyloid A protein abnormally deposited in
the brain in Alzheimer's disease
CNS Central Nervous System
Cognition The function of the brain by which
we become aware of objects, of
thought, of perception including
all aspects of perceiving, thinking
and remembering
D1 agonist Chemicals that act to stimulate
dopamine D1 receptors
D1 antagonist Chemicals that act to block
dopamine D1 receptors
Dopamine Human chemical messenger involved
in many key physiological functions
FDA Food and Drug Administration, USA
Glial cell A non-excitable cell found in cell
tissue
In vitro An experiment performed outside a
living organism in, for example, a
test tube
In vivo An experiment performed in a living
organism
Ion channel A protein pore in the cell membrane
which selectively allows the
passage of ions
Ischaemic stroke Stroke caused by restricted blood
supply to the brain
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L-DOPA Dihydroxy phenylalanine or
levodopa, a drug used in the
management of Parkinson's disease
MCA Medicines Control Agency
MRI This technique uses a strong
magnetic field to generate images
in 2D and 3D to provide in-depth
images of organs and structures in
the body
MS Multiple Sclerosis
Myelin sheath Protein covering of nerve cells
which speed conduction of
electrical signals along the nerve
Neurodegeneration Death of nerve cells
Neuropathic pain Pain caused by nerve injury
NMDA N-methyl D-aspartate
Opiate analgesic Pain relieving compounds
originating from the milky juice of
the Papaver somniferum including
opium, morphine, codeine and their
derivatives
Parkinson's Parkinson's disease, an abnormal
condition of the nervous system
caused by degeneration of an area
of the brain, resulting in rigidity
of the muscles, slow body movement
and tremor
Phase I The assessment of a biological
substance in volunteers to
investigate human tolerance,
pharmacokinetics and
pharmacodynamics
Phase II The assessment in patients of a
drug to determine dose range and
preliminary efficacy
Phase III Definitive studies to determine
efficacy and safety of a drug in
patients who are likely to benefit.
These trials try to find out as
much as possible about the new drug
including its side-effects
Phase IV Clinical trials performed after
marketing authorisation designed to
monitor drug use in the clinical
setting, to evaluate safety and
efficacy
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Post operative pain Short term pain resulting from a
surgical procedure
Preclinical A stage in the drug development
before clinical trials, at, or
after, the stage of candidate drug
selection
Prostaglandins Locally active hormone
Schizophrenia A chronic, severe, and disabling
brain disease which is the most
common type of psychosis. Symptoms
are divided into positive and
negative categories. Positive
symptoms include hallucinations,
delusions and thought disorders.
Negative symptoms include lack of
motivation, social withdrawal and
depression
24
