Pharma: Cephalon Inks Australian Investment

October 25, 2010 (FinancialWire) (http://www.financialwire.net/) — Cephalon, Inc. (NASDAQ: CEPH) said it has signed a convertible note subscription agreement with ChemGenex Pharmaceuticals Ltd. (ASX: CXS), an Australian-based oncology focused biopharmaceutical company.

Under the terms of the agreement, Cephalon will provide up to A$15 million to ChemGenex in return for a note that is convertible at A$0.50 per share.  The funding will support ChemGenex operations, including clinical activities to complete a planned New Drug Application submission to the U.S. Food and Drug Administration for omacetaxine for the treatment of chronic myelogenous leukemia patients who have failed two or more tyrosine kinase inhibitor.  

Separately, Cephalon also entered into option agreements with two of ChemGenex's major shareholders, Stragen International N.V. and Merck Sante S.A.S.  Under those option agreements, Cephalon has the right to acquire up to 19.9 percent of ChemGenex's outstanding shares at A$0.70 per share.  

Cephalon said it has the right to exercise the options before the later of March 31, 2011, and ten business days after receipt of certain clinical trial data and related analyses from ChemGenex.

The company added that it has the right to convert the notes to ChemGenex shares at any time, subject to ChemGenex shareholder approval for conversion during the Exercise Period or if the options are exercised.  

Cephalon said it will determine whether to exercise its rights under any or all of the agreements following receipt and review of the ChemGenex data and analyses.

Pennsylvania-based Cephalon is a biopharmaceutical company that sells more than 150 products in nearly 100 countries.

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