Commonwealth Biotechnologies, Inc. has completed a sale of CBTE stock subject to a $1 million put right with Venturepharm Laboratories, Ltd. Under the terms of the put agreement, CBI sold 463,426 shares of common stock to VPL at a price of $2.15 per share, a 56% premium to the June 30, 2008 share price of $1.38.
In consideration of the sale of shares, CBI received $500,000 in cash and 2,229,664 of VPL's ordinary shares. Such number of shares equals $500,000 of equity value, based on Venturepharm's price of HKD 1.7469 (at exchange rate of $1.00/HKD 7.79) per ordinary share. The shares are listed for trading on the Hong Kong Stock Exchange and have full voting rights.
Dr. Paul D'Sylva, CEO of CBI said, "We have elected to exercise our put option with VPL now because the exercise price of $2.15 represents a significant premium to the current CBTE share price. The capital raised through the put right will be used primarily to further expand and promote our new Chinese joint venture business, Venturepharm Asia."
Through Venturepharm Asia, CBI recently procured two preclinical chemistry facilities in China to house and expand the business operations of Exelgen and Mimotopes, its small molecule and peptide subsidiaries. The company has recruited scientific staff and expects to commence operations in the China facilities in the third quarter of 2008.
Dr. D'Sylva added, "We believe the cost and capacity advantages of Venturepharm Asia provide significant growth potential for CBI. The additional funds raised through exercising our put right will contribute to bringing our new facilities on-line and to launching a marketing campaign to promote our expanded service offerings to the pharmaceutical and biotechnology industries."
Commonwealth Biotechnologies, Inc. (CBI) is a growing contract research organization that offers an integrated range of comprehensive services for the discovery and development of therapeutics, vaccines and diagnostics.