Cypress Bio Rejects Buyout Offer, Shutting Down Commercial Business
Here’s one solution to a suitor’s unsolicited buyout offer: Make yourself ugly, at least to that suitor.
San Diego’s Cypress Bioscience (NASDAQ: CYPB) got a $160 million cash buyout offer last month from Ramius Value and Opportunity Advisors, part of the New York-based, $7.8-billion Ramius hedge fund group.
Ramius, which had accumulated a 10 percent ownership stake in Cypress, made its offer on July 19. The San Diego biotech had little to say at the time, except that its board was reviewing the matter.
Cypress responded this week with two announcements. In the first, Cypress says it is withdrawing from its commercial business, including a deal with Forest Laboratories to sell milnacipran, its fibromyalgia drug marketed as Savella. Forest agreed to pay Cypress $2 million to discontinue its role in promoting milnacipran, although Cypress says it retained royalty and other rights. As part of the move, Cypress says it also is laying off 123 people, or 86 percent of its workforce. In the statement, Cypress CEO Jay Kranzler says the biotech has been contemplating its “withdrawal from the commercial market” for some time as part of the company’s “renewed strategic focus on CNS drug development.”
In a second statement yesterday, Cypress says its board has unanimously rejected the buyout. Cypress says Ramius’ offer to buy all the stock it doesn’t already own at $4 a share “grossly undervalues Cypress’ current business and future prospects and consequently is not in the best interests of Cypress’ other stockholders.”
It’s worth noting that in its statement, Cypress already has recast itself as “a pharmaceutical company engaged in the development of innovative drugs to treat central nervous … Next Page »