Investor Questions End Of Cypress-Forest Deal
From Associated Press (August 5, 2010)
NEW YORK -- Investment manager Ramius LLC, which is trying to buy Cypress Bioscience Inc., criticized Cypress on Thursday for ending a partnership with drug maker Forest Laboratories.
In a letter to Cypress’ board of directors, Ramius asked why the company ended its marketing partnership on Savella, a treatment for fibromyalgia, without getting comments from banking advisers. Ramius said it wants to review documents related to the Savella agreement so it can decide if Cypress’ decision was in the best interest of its shareholders.
On Wednesday, Cypress announced it would eliminate most of its jobs and end its collaboration with Forest to save money. Cypress said withdrawing from the commercial market will save it $10 million per year. It will still get royalties on sales of Savella made by Forest.
Cypress also said it will eliminate 86 percent of its 123 jobs, or about 106 positions. All the employees who are losing their jobs will receive notice of layoffs effective Oct. 6. The company plans to discontinue or sell its personalized medicine business by the end of the third quarter.
Ramius is the alternative investment management unit of Cowen Inc. It owns 9.9 percent of Cypress shares, and in July, it offered to buy the rest of the company for $4 per share. Cypress is reviewing the offer.
Cypress shares fell 4 cents to $3.59 in afternoon trading.
Posted: August 2010