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Cypress Bioscience rejects Ramius' $6.00 per-share takeover bid; shares rise 19%

Last updated: 20:04 14 Dec 2010 EST, First published: 21:04 14 Dec 2010 EST

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Cypress Bioscience's  (Nasdaq: CYPB) stock soared 19% on Tuesday after the company rejected a $6-per-share cash bid from Ramius V&O Acquisition, a subsidiary of investment firm Ramius.

In a statement today, Ramius said that it received notice yesterday that its offer had been rejected by Cypress' board, and that the San Diego-based pharmaceutical company is "pursuing an alternative transaction with a third party".

Ramius, which currently owns 9.9% of Cypress, first made a bid for the company in July of $4 per share and increased the offer to $4.25 in September.

After both offers were rejected, Ramius attempted to bypass the board and go directly to Cypress' shareholders, prompting the company to adopt a "poison pill" - a strategy used to thwart hostile takeovers.

In January 2009, Cypress received approval from the U.S. FDA for its Savella drug, a treatment for the pain resulting from stress or muscle injury.

Cypress' development-stage assets include the CYP-1020 drug for treating cognitive impairment in schizophrenia, Staccato nicotine for smokers, and a drug for autism. The company's shares were trading at $5.70 as of 3:38 pm EST on Tuesday.

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