Bentley to separate its two businesses
two in a bid to bolster its two business divisions.
The Exeter, New Hampshire, pharmaceutical company has planned to separate its drug delivery business from its generics business that will result in two independent and highly focused public companies. The proposed drug delivery spin-off will be named CPEX Pharmaceuticals, but is still subject to numerous conditions, including final approval by Bentley's board of directors and the filing and effectiveness of a registration statement with the Securities and Exchange Commission. "The board believes that by separating Bentley into two focused and better understood companies, the opportunities for both the drug delivery business and the generics pharmaceuticals business could be substantially enhanced and greater value could be created than under the current structure," Bentley chairman and chief executive James Murphy said in a statement. "Operating separately will allow each company to benefit from greater strategic and managerial focus. The separation will enable the two businesses to compete more effectively in their respective markets and optimise their respective business goals, research initiatives and capital requirements. We believe that our decision to separate out two businesses and to explore all available strategic alternatives with respect to the generics business may result in increased value for our shareholders." Bentley plans to implement the drug delivery spin-off through a taxable stock dividend of all CPEX Pharmaceuticals to Bentley shareholders. Under the plan, Bentley would provide transitional services, including managerial, operational, and administrative support, for a period of up to 24 months until CPEX could fully establish its own operations. CPEX would focus on innovative drug delivery, particularly Bentley's unique CPE-215 permeation enhancement technology. This works by enhancing the absorption of drugs across a variety of biological membranes, including the skin, mouth, nose and eye, and the company is looking at being able to use the technology to formulate creams, ointments, gels, solutions, lotions, sprays and patches. The technology has already been used in Testim, a testosterone gel marketed by Auxilium Pharmaceuticals, and is being used in the development of Nasulin, an intranasal insulin product currently in Phase II trials. The split will allow Bentley to focus on its generics pharmaceuticals business, of which the company is intending to explore strategic alternatives, which were undisclosed. The generics business is the larger of the two business segments with revenues in 2006 of $101.1m (€71.1m), compared to the drug delivery business which reported revenues of $8.4m in 2006. Bentley would maintain its commercial and manufacturing presence in Europe and continue to develop, market and license current and pipeline pharmaceuticals, the company said in a statement. "The generics and drug delivery businesses have very different strategic goals, key performance indicators and shareholder expectations. Because the synergies between these businesses are limited, we concluded that separating them at this time would result in greater transparency for our shareholders, and allow the business to compete more effectively in their respective markets," Murphy said.
