Danish biotech company Zealand Pharma is in discussions with another firm in the domestic biotech sector – Curalogic – regarding a merger or acquisition that can pave the way to a bourse listing, writes financial daily newspaper Børsen. Zealand Pharma also reportedly has alternative strategies on the drawing board that could result in the company being sold to a foreign player.
Zealand Pharma made a previous foray in the direction of the stock exchange in 2005, but at that time potential investors were only willing to pay half the offer price for the shares the company's owners were touting.
Daniël Ellens, chairman of the board at Zealand Pharma, declines to confirm whether or not the firm is in talks with Curalogic but comments: "Consolidation is happening, everyone is talking to everyone. It is normal to look at opportunities for licensing in or licensing out, as well as M&A. When market conditions are less than optimal, as they are now, M&A activity intensifies accordingly."
Ellens underscores that against the background of a consolidating market, Zealand Pharma's ambition is to grow to a size that achieves the critical mass necessary to attract the attention of major foreign investors.
"It means that in a few years Zealand Pharma needs to have a considerably higher market capitalization and a bigger number of projects under development. That's the basis for interesting other investors, especially international institutional investors," adds Ellens.
Zealand Pharma currently has DKK 220m (USD 45.7m) in its cash tanks, enough to continue operations to 2010, but the company also has the opportunity to increase cashflow through new partnerships and upcoming milestones from existing partners including France's Sanofi-Aventis in 2009 in regard to Zealand Pharma's diabetes drug candidate ZP10, which is in its last phase of development.
Zealand Pharma focuses on the discovery and development of peptide-based drugs. The company writes on its website that it has built a pipeline that includes three compounds in clinical phase II development, two compounds in clinical phase I development, and two compounds are in pre-clinical development. Based in Copenhagen and employing 65 people, Zealand Pharma has existing clinical development partnerships with Sanofi-Aventis and Wyeth.