Devgen announces the intention to close its pharma division and to fully focus on the development of its agro business
Gent - 05 November 2008 -In November 2007, Devgen announced its intent to divest its pharma unit in order to focus on its agro-activities. Through its research activities in Belgium, Devgen has developed a unique technology position in crop protection and has grown to a fully integrated trait and seed business in Asian growth markets, with a focus on rice, sorghum, sunflower and pearl millet and a licensing business in other crops. Devgen's pharma division focuses on the development of a novel class of preclinical drug candidates for the treatment of inflammatory diseases.
Devgen took this decision to offer its promising agro division the maximal growth opportunities. Both divisions require substantial investments and in this stage of their development do not have synergies any longer. The pharma activities furthermore carry a substantially higher risk profile.
During the past year the company has continued its investments in its pharma programs and substantial efforts were made to divest the pharma division. In the deteriorating financial and investment climate, potential candidate investors (venture capitalists, biotech- and pharma companies) have become more risk averse, independent of the quality of the pharma programs. This has thwarted Devgen's divestment process. Devgen therefore today decided to no longer invest in the development of its pharma programs and to initiate the dismissal of the 19 employees of its pharma division. Today, 217 people are employed by the Devgen group worldwide.
In line with this strategy Devgen will focus its available resources on its agro activities. The company's activities in Ghent include, furthering its key technologies (RNAi for crop protection, trait development and molecular breeding), bringing its candidate nematicide to market, and the IP and business coordination of its growing trait and seed business in India and in South-East Asia. These activities do have significant synergies, are close to market and sustainable revenue growth and offer Devgen the best opportunities for growth and development.
"This serious step was taken after consideration of all possible alternatives taking into account the interests of all stakeholders. In the current market the chance to valorize Devgen pharma assets without further major investments of the company is remote." explains Thierry Bogaert, CEO of Devgen. "Devgen will focus its resources and will further develop in the agro-market segment where the company has the strongest technology and business opportunities: the trait and seed opportunities in rice, an important growth market in which the company is well positioned to develop its technology and business faster than the market and to build a leadership position."
Devgen is a public agricultural biotech and seed company focused on developing and commercializing:
* biotech traits and hybrid seeds to meet the growing needs for high yielding, high quality hybrid rice, sorghum, millet and sunflower of the Indian and other south-east Asian markets; * a novel generation of biotech products to protect a wide spectrum of crops incurred from pests; to render crops more tolerant against stress factors such as drought and salty soils and to decrease the need for fertilizer use by optimizing nitrogen uptake; * a new generation of agrochemical products to protect crops from damage inflicted by plant parasitic nematodes.
Incorporated in 1997, Devgen has offices in Ghent (Belgium), Singapore, Hyderabad (India) and Delaware (US) and employs more than 200 people worldwide. Devgen is listed on Euronext Brussels (ticker: DEVG) since June 2005.
For more information please contact:
Thierry Bogaert, CEO Wim Goemaere, CFO Tel. +32 9 324.24.24 Tel. +32 9324.24.24 Thierry.Bogaert@devgen.com
This press release may contain forward-looking statements containing the words "anticipates", "expects" , "intends", "plans", "estimates", "may" and "continues" as well as similar expressions. Such forward looking statements may involve known and unknown risks, uncertainties and other factors which might cause the actual results, performance or achievements of Devgen to be materially different from any future results or achievements expressed or implied by such forward-looking statements. These forward looking statements speak only as of the date of publication of this document. Devgen disclaims any obligation to update such forward looking statements in this document to reflect any change in its expectations, conditions or circumstances on which such statement is based, unless required by law or regulation.
Posted: November 2008