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When Noel Hall and two colleagues established Aspreva Pharmaceuticals Corp. in Victoria six years ago, their concept was revolutionary: Make money by finding existing drugs that - in addition to treating a specific disease - can also help with other, less common medical problems.

The company hit the jackpot in 2003 when it signed a licensing deal with Roche AG for the drug CellCept, a product used to fight rejection after organ transplants, but which also helps treat auto-immune diseases such as Lupus.

Aspreva got to keep a portion of all CellCept sales made for non-transplant uses, in return for doing development work and running clinical trials to study how the drug functions in these other applications.

In 2005, Aspreva went public in a $113-million (Canadian) public offering at $13.68 a share. Yesterday, initial investors almost doubled their money as the company revealed it is being sold for a whopping $915-million (U.S.) or $26 a share to Swiss biotech giant Galenica Group.

The company has been breaking ground all through its history, said Mr. Hall, who is now president of Aspreva. "We were founded on a breakthrough business development [concept]that nobody had ever thought of," he said. "And nobody ever thought we could pull off the sort of deal we pulled off with Roche."

Mr. Hall, along with co-founders Richard Glickman and Michael Hayden, all had years of experience in the biotech business, but they had trouble getting initial financing for Aspreva.

"Nobody really believed us and the Canadian venture capital community shunned us," he said. "It was a classic startup where we had to finance the company ourselves supported by some great angel investors who really believed in us."

The Galenica transaction came about because Aspreva has been scouring the globe trying to find another drug partner to follow up on its deal with Roche.

Galenica, whose activities range from drug development to running pharmacies, had products in its pipeline that looked like they might glean new markets through a relationship with Aspreva.

As talks progressed, a joint venture was considered, then a takeover was proposed.

"They became so compelled by what Aspreva could do for their assets, that they made an unsolicited friendly offer," Mr. Hall said.

Rather than disappointment among employees that the company is shifting into other hands, "there's a real sense of excitement and buzz, because they're getting to be part of the next chapter," he said. "There is a sense we're building the next phase of our company."

After Galenica made its takeover bid, Aspreva did a "limited" check of other possible scenarios "to make sure we weren't missing something," chief executive officer William Freytag said on a conference call with analysts yesterday, but it found no better scenario on the horizon.

Mr. Freytag, who joined the company in July to succeed Mr. Glickman as chairman and CEO, said completing the deal with Galenica was a "classic bittersweet scenario."

In a short time "I've basically fallen in love with this company," he said, but the deal with Galenica "clearly represented a very significant opportunity for our shareholders."

Directors, managers and the company's largest shareholder have signed lock-up agreements with Galenica covering about 30 per cent of Aspreva's common shares. Shareholders will vote on the deal in December - two-thirds must agree for it to go through - and the sale is expected to close in early January.

Brian Bapty, an analyst at Raymond James in Vancouver, said the Galenica offer looks like a "good price," and he expects the deal to close without any other bidders surfacing.

Aspreva will bring Galenica a strong marketing organization, and skills in running clinical studies, Mr. Bapty said. "The buyer gets an instant global footprint and substantially increases its ability to market drugs."

Aspreva (ASPV)

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