For the terminally lazy...here is that report :)
July 20, 1999
RECOMMENDATION: BUY
ILEX Oncology, Inc. (NASDAQ: ILXO)
ILEX Acquires Convergence Pharmaceuticals, Inc. Strengthening Its Oncology Portfolio; Company Raises $20 Million in Private Equity Deal
Market Data:
Exchange Symbol..................ILXO (NASDAQ)
Price of Common Stock (7/19/99).........$9.906
30-Day Average Trading Volume...........38,500
Common Shares Outstanding.........12.9 million
52-Week High/Low..................$15.25/$5.50
ILXO CORPORATE INFORMATION
Address............11550 IH 10 West, Suite 300
.........................San Antonio, TX 78230
Telephone.......................(210) 949-8200
President & CEO................Richard L. Love
VP & CFO......................Michael T. Dwyer
Summary Investment Consideration
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ILEX Oncology, Inc. (ILXO) announced the acquisition of Convergence Pharmaceuticals, Inc., a privately held pharmaceutical company based in Boston, MA. We believe that this acquisition strengthens ILXO's oncology portfolio by bringing new anti-cancer drugs to its product pipeline. Through the acquisition, ILXO added six proprietary anti-angiogenic proteins, a small molecule angiogenesis inhibitor, and a DNA-repair inhibitor to its portfolio, and gained the rights to 16 patents and patent applications. In preclinical studies, Convergence's angiogenesis inhibitors were shown to be more potent than certain other anti-angiogenic factors. ILXO hopes to use these compounds to develop creating an effective cancer treatments that will be used in conjunction with chemotherapy, resulting in better treatment than chemotherapy or anti-angiogenisis proteins alone. Glenn Rice, President and CEO of Convergence Pharmaceuticals stated that ILXO was chosen for a variety of reasons including its commitment to oncology, its development of small molecules and protein therapeutics, and its strong pipeline, led by CAMPATH ®, a humanized monoclonal antibody.
Transaction: ILEX acquired 100% of Convergence Pharmaceuticals in exchange for 1 million shares of ILEX common stock and an additional earn-out of up to one million shares, dependent on the commencement of Phase I clinical trials and Phase II clinical trials of the Convergence compounds. In addition to the six proprietary anti-angiogenic proteins and technologies, ILXO gains a full discovery and product-development laboratory in Boston, as well as its key research team. Glenn Rice, Phd, former President and CEO of Convergence, will join ILXO as vice president of research, and will sit on the ILXO board as its ninth member.
Completion of Private Placement: In addition to ILXO's acquisition, the Company completed a $20 million private placement of 2.4 million shares of common stock at a 15% discount. The financing will provide ILXO will sufficient funds to sustain its research and development of its cancer therapeutics. ILXO intends to seek partnering opportunities to defray the cost of R& D, and through the sales of its compounds and partnering the Company anticipates to be profitable by the year 2001.
We are reiterating our BUY recommendation on ILEX Oncology, based on recent events and analysis.
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