AGI sells for less than €7m five years after being valued at €85m

IRISH pharmaceutical company AGI Therapeutics has been sold for less than €7 million, less than five years after being valued at €85m.

The board of the Dublin-headquartered company said, yesterday, that it has unanimously recommended, to shareholders, an $8.4m (€6.6m) offer from privately-owned R&D-focused pharmaceutical group Aravis Therapeutics.

“We believe the offer represents an attractive premium, relative to our recent share price trading history, and when the offer is considered — alongside other alternatives — represents the best outcome for shareholders,” AGI’s non-executive chairman, Ronan Lambe, said.

AGI took a dual share listing on Dublin’s IEX and London’s AIM markets in February 2006 — a move which valued the company at just under €85m.

In the past three years, however, AGI’s fortunes have nosedived, somewhat — what with its former headline treatment, Rezular, failing to make the hoped-for breakthrough, after disappointing Phase 3 clinical trials.

The company scrapped Rezular in 2009, after hoping that it might become the first commercially available treatment for irritable bowel syndrome in the US market over the next decade.

In the aftermath of that, AGI terminated a development agreement with US firm Axcan Pharma for a new gastro-intestinal treatment.

The Dublin company — which has also failed to attract a new development partner — has seen its share price has fall consistently over the past three years, although it was up by over 50% on the back of yesterday’s announcement.

AGI’s recommended sale price represents a 67% premium to AGI’s closing share price last Friday, and a premium of nearly 130% to its average daily closing price for the last three months.