AGI THERAPEUTICS is being sold to Aravis Therapeutics for €6.6 million, a fraction of the €85 million the Dublin-listed pharmaceuticals group was valued at when it joined the stock market in 2006.

A failure to attract a development partner, on top of disappointing trials for a treatment for irritable bowel syndrome and a share price in decline for nearly three years, prompted AGI to accept the cash offer from Aravis, a privately run pharmaceutical group.

The price of € 0.0917 per AGI share represents a 67 per cent premium to AGI’s closing share price at the end of last week and a premium of around 130 per cent to its average daily closing price for the previous three months.

“We believe the offer represents an attractive premium relative to our recent share price trading history and when the offer is considered alongside other alternatives the offer represents the best outcome for shareholders,” Ronan Lambe, chairman of AGI, said in a statement yesterday.

AGI was established in 2003 by a group of former senior executives of Elan, and began trading on the junior markets of the Irish and London stock exchanges in early 2006. The company was valued at nearly € 85 million when it began trading at € 1.26 per share on its first day of joining the market.

However, its share price began moving in a downwards trajectory in recent years. In 2009 it announced it had stopped development work on its treatment for irritable bowel syndrome, Rezular, after disappointing clinical trials results.

AGI then carried out a fundamental review of its business strategy. During the first six months of 2011 it began implementing a new strategy, refocusing its efforts on developing speciality drugs for unmet medical needs.

In July of this year it divested a portfolio of patents to Warner Chilcott for about €300,000 as part of its efforts to monetise dormant assets which were no longer core to its business. – (Additional reporting: Reuters)