NPH Neuropharm

 

TIDMNPH 
 
RNS Number : 4483K 
Neuropharm Group PLC 
20 April 2010 
 

 
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| For immediate release              |                20 April 2010 | 
+------------------------------------+------------------------------+ 
 
 
 
                              Neuropharm Group plc 
                        ("Neuropharm" or "the Company") 
 
 Proposed Members' Voluntary Liquidation and proposed cancellation of admission 
                      of Ordinary Shares to trading on AIM 
 
Neuropharm Group plc (AIM: NPH) today announces that its directors have decided 
to recommend to shareholders that the Company be wound up by way of a members' 
voluntary liquidation ("MVL") such that, following payment of the Company's 
liabilities, its remaining cash be returned to shareholders. The MVL is 
conditional upon approval by Neuropharm shareholders ("Shareholders") at a 
general meeting (the "General Meeting"), to be held on Tuesday 18 May 2010. The 
Company also announces that it has applied for the cancellation of the trading 
of its securities on AIM, subject to approval by Shareholders of the MVL. A 
single resolution (the "Resolution") will be proposed to Shareholders at the 
General Meeting to approve the MVL and the cancellation. It is expected that 
suspension of the Company's ordinary shares (the "Ordinary Shares") will occur 
at 7.00 a.m. on Tuesday 18 May 2010 and, subject to the passing of the 
Resolution, that cancellation will occur at 7.00 a.m. on the following day, 
Wednesday 19 May 2010. 
 
A circular providing further details of the proposed MVL and cancellation and 
the General Meeting has been posted to Shareholders today. The circular is also 
available on the Company's website at www.neuropharm.co.uk. 
 
The Directors consider the Resolution to be in the best interests of the Company 
and its Shareholders. Accordingly, the Directors unanimously recommend that 
Shareholders vote in favour of the Resolution as they have undertaken to do in 
respect of the Ordinary Shares in which they are beneficially interested.  The 
Company has received undertakings to vote in favour of the Resolution from 
certain Shareholders (including from those of the Directors who hold Ordinary 
Shares) in respect of an aggregate of 10,612,915 Ordinary Shares, representing 
approximately 33.65 per cent. of the current issued share capital of the 
Company. 
The Company has also received non-binding letters of intent from certain 
Shareholders confirming their intention to vote in favour of the Resolution in 
respect of an aggregate of 5,573,538 Ordinary Shares, representing approximately 
17.67 per cent. of the Company's issued share capital as at the date of the 
Circular. 
Accordingly, in aggregate, the Company has received undertakings or letters of 
intent to vote in favour of the Resolution in respect of 16,186,453 Ordinary 
Shares, representing approximately 51.32 per cent. of the Company's issued share 
capital as at the date of the Circular. 
 
Background to and reasons for the MVL and Cancellation 
The Company announced on 18 February 2009 that its Phase III SOFIA study of its 
lead programme, NPL-2008, in autistic disorder did not achieve its primary 
endpoint.  The SOFIA study showed that repetitive behaviours in patients were 
reduced after both NPL-2008 (a novel formulation of fluoxetine) and placebo 
treatment, but the study did not meet its primary endpoint of demonstrating a 
statistically significant difference between the two groups of patients.  These 
results were unexpected and hugely disappointing to, among others, the Company 
and its management and shareholders. 
 
Subsequent to these results, Neuropharm sought to secure a collaboration with a 
pharmaceutical company to continue development of NPL-2008 and undertook 
discussions with a number of third party pharmaceutical companies with a view to 
securing a potential collaboration that would encompass the further development 
and commercialisation of NPL-2008. However, discussions with potential 
collaborators did not come to fruition. 
 
On 3 November 2009, the Company announced that it was in discussions which may 
or may not lead to an offer being made for the Company and noted that the Board 
was seeking a sale or merger of the Company in order that the value of its 
pipeline could be maximised.  On 10 March 2010 the Company announced that it was 
continuing talks with a potentially interested party but that in light of the 
uncertainty as to whether an offer would be made for the Company and the costs 
associated with maintaining admission of the Company's shares to trading on AIM 
and the continued operation of the business, the Board had resolved to explore a 
return of cash to Shareholders. On 31 March 2010 the Company announced that, 
while discussions were ongoing for the sale of certain assets, the Company had 
received confirmation that none of the companies it was in discussion with were 
considering making an offer for the Company. 
 
The Board has therefore expended considerable time and energy in recent months 
considering in detail the Company's strategic options.  Discussions have been 
held with various third parties, including already listed trade players, other 
international pharmaceutical companies and venture capitalists.  The range of 
possible transactions which the Company has considered has been extensive and 
has included technology licensing arrangements, the sale of one or more of the 
Group's programmes, the sale of Neuropharm Limited, an acquisition of the 
Company for cash and a reverse takeover of the Company. 
 
Regrettably the Directors have now concluded that it is in the best interests of 
Shareholders that a resolution be proposed to, amongst other things, place the 
Company into members' voluntary liquidation such that, after payment of the 
Company's liabilities, the Company's remaining cash be returned to Shareholders 
via the MVL. 
 
The MVL and Cancellation 
It is proposed that Samantha Jane Keen and Ian Carr of Grant Thornton UK LLP, No 
1 Dorset Street, Southampton SO15 2DP be appointed as joint liquidators of the 
Company (the "Proposed Liquidators").  It will be the Proposed Liquidators' 
responsibility to deal with the conduct of the MVL and to determine the timing 
and amount of any distribution(s) to Shareholders. The MVL is conditional upon 
the passing of the Resolution at the General Meeting.  If the Resolution is 
passed, it is anticipated that the MVL will commence immediately following the 
General Meeting and that the appointment of the Proposed Liquidators to the 
Company will become effective at such time. 
 
On 19 April 2010, and as required by Section 89 of the Insolvency Act 1986 in 
respect of a members' solvent voluntary liquidation, the Directors made a 
statutory declaration of solvency stating that they have made a full enquiry 
into the affairs of the Company and that, having done so, they have formed the 
opinion that the Company will be able to pay its debts in full, together with 
any interest, within a period of 12 months from the commencement of the 
Liquidation. 
 
Whilst the timetable for any distribution is outside the Board's control, the 
Board currently anticipates that the Proposed Liquidators will be in a position 
to pay a distribution to Shareholders approximately two months following the 
commencement of the Liquidation. 
 
As noted above, as at 31 December 2009 the Company had net cash, cash 
equivalents and money market investments of GBP6.18 million. 
 
Pursuant to Rule 41 of the AIM Rules, the Company has today made an application 
to the London Stock Exchange for the admission of the Ordinary Shares to trading 
on AIM to be cancelled on 19 May 2010 subject to Shareholder approval by the 
passing of the Resolution at the General Meeting. It is expected that dealings 
in Ordinary Shares on AIM will be suspended at the start of business on 18 May 
2010 (being the day of the General Meeting) and, provided the Resolution is 
passed, that admission of the Company's shares to trading on AIM will be 
cancelled with effect from the start of business on 19 May 2010. 
 
 
 
The Board 
On 9 April 2010 the Company announced that Dr Mike Snape had stepped down as an 
employee and director of the Company.  Dr Acton, Stephen Whybrow and Graeme 
Hart, the Company's non-executive directors, have each agreed that they would 
waive their contractual entitlement to three months' notice in the event of the 
termination of their appointment as directors of the Company.  Accordingly, if 
the Resolution is passed, each of the non-executive directors will cease to be 
directors from that date and will not receive any compensation for loss of 
office. Unless the Company enters into alternative arrangements with Robert 
Mansfield and Graham Yeatman, Robert Mansfield and Graham Yeatman will continue 
to receive their contractual entitlements under their service agreements until 
expiry on 22 March 2011 of their 12 month notice period. 
 
Effecting Transactions in Ordinary Shares following the MVL and Cancellation 
If the Resolution is approved the Ordinary Shares will no longer be tradable on 
AIM. Furthermore, as a consequence of the MVL, the Ordinary Shares will not be 
transferrable without the consent of the appointed Proposed Liquidators. Further 
details regarding dealings, transfers and cancellation of admission are provided 
in the circular to Shareholders. 
 
Enquiries 
 
For further information please contact: 
 
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| Neuropharm                             | + 44 (0) 1372  | 
|                                        | 371 171        | 
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| Robert Mansfield, Chief Executive      |                | 
| Officer                                |                | 
| Graham Yeatman, Chief Financial        |                | 
| Officer                                |                | 
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|                                        |                | 
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| Piper Jaffray Ltd.                     | + 44 (0) 20    | 
|                                        | 3142 8700      | 
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| Neil Mackison, Rupert Winckler         |                | 
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|                                        |                | 
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| Buchanan Communications                | + 44 (0) 20    | 
|                                        | 7466 5000      | 
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| Mark Court, Catherine Breen            |                | 
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Notes to Editors: 
 
About Neuropharm 
Neuropharm is a speciality pharmaceutical company focused on the development of 
medicines for the treatment and management of neurodevelopmental disorders. 
Please visit www.neuropharm.co.uk for further information. 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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