Diamyd aquires American biotechnology company Nurel Therapeutics, Inc.
Diamyd Medical AB announced that it has agreed to acquire all of the outstanding shares in Nurel, a Pittsburgh PA-based biotechnology company. The merger is subject to approval by the board of directors of each company and their respective shareholders. The Diamyd Medical Board of Directors plans to request shareholder approval for the merger at the Annual General Shareholders Meeting on December 12th. The merger is expected to close in mid-December 2005, creating a global biotechnology company focusing on the treatment of diabetes and its complications including chronic pain and neuropathy.
Diamyd Medical has valued Nurel at US$1.5 million. Nurel shareholders will receive a total of 223,208 Diamyd B shares. This reflects an assumed Diamyd B share value of SEK 55, or approximately a 15% premium above the November 21, 2005 closing price. In addition, the Company will issue another additional 110,000 Diamyd shares against convertible loans used previously to finance Nurel. In total this represents a dilution of about 4% to Diamyd shareholders. This merger will create strong synergies between Diamyd Medical and Nurel, while having little effect on Diamyd's financial position and burn rate.
The Diamyd Medical headquarters will remain in Stockholm, Sweden. Michael Christini, current President of Nurel, and a seasoned biotechnology industry executive and former practicing attorney with the U.S. National Institutes of Health, the U.S. Federal Trade Commission, and Cooley Godward LLP, a renowned U.S. biotechnology law firm, has entered a long-term employment contract as President of the Diamyd USA office in Pittsburgh, PA.
Other news from the department business & finance
