Miljenko,
You're right, might as well take my lumps on PCOP. Also will bail on MCLS, since deCODE is not a trickle company by any stretch of the imagination:
>>REYKJAVIK, Iceland, and WOODRIDGE, Ill., Jan. 8 /PRNewswire-FirstCall/ -- deCODE genetics, Inc. (Nasdaq: DCGN chart, msgs; Nasdaq chart, msgs Europe chart, msgs) and MediChem Life Sciences, Inc. (Nasdaq: MCLS chart, msgs), a pioneer in providing drug discovery and development services to the biopharmaceutical industry, today announced that they have signed a definitive agreement for deCODE to acquire MediChem in a stock-for-stock exchange. The transaction has been approved by the boards of directors of both companies. The acquisition will give deCODE capabilities in chemistry and structural proteomics that will be used in the implementation of its strategy of turning its targets identified by applying population genomics to common diseases into novel drugs for the market. deCODE and MediChem management will discuss today's announcement with analysts and investors in a conference call to be webcast live today at 9 am EST/2 pm GMT (details below).
Under the terms of the merger agreement, which is expected to close in the second quarter of 2002, MediChem shareholders will receive 0.3099 shares of newly issued deCODE common stock in exchange for each MediChem share of common stock. Using deCODE's stock price at the close of business yesterday, this would result in a purchase price of $3.04 per share of MediChem common stock and implies an equity value of approximately $83.6 million. On a pro forma basis, MediChem shareholders will own approximately 15.7% of the combined company's capital stock.
As a result of this transaction, deCODE expects to issue a total of approximately 8.3 million shares of common stock and assume all outstanding options of MediChem. The merger will be accounted for using the purchase method of accounting and is expected to be tax-free to MediChem shareholders. The merger is subject to Hart-Scott-Rodino clearance as well as approval by shareholders. deCODE and certain shareholders of MediChem representing approximately 63% of the voting rights of the outstanding MediChem common stock have entered into an agreement by which such shareholders have agreed to vote all of their shares in favor of approval and adoption of the merger agreement.
"MediChem is an excellent complement to deCODE and today's announcement underscores our commitment to proprietary drug development. We have already at deCODE gene discovery projects in 50 common diseases, a portfolio of hundreds of proprietary drug targets, as well as the biology to validate targets and perform high-throughput screening. The addition of MediChem's extensive proteomics and chemistry expertise will enable us to go even further downstream in the drug development process, maximizing the creation of shareholder value from our breakthroughs in the genetics of common diseases," said Kari Stefansson, Chief Executive Officer of deCODE.
"We have been impressed with the infrastructure as well as the breadth and quality of the chemists and other scientists at MediChem. By coming together with MediChem deCODE also gains an expanded U.S. presence and significant new partnerships with pharmaceutical and biotechnology leaders including Pharmacia, Bristol Myers Squibb, Argonne National Laboratory, Degussa, Rigel Pharmaceuticals, Elitra Pharmaceuticals and Neurocrine Biosciences. We believe that this merger marks a major step towards building a fully-integrated biopharmaceutical company capable of bringing a range of therapeutic products to the market," Dr. Stefansson added.
"We believe that the combination of deCODE's target discovery program and MediChem's extensive small molecule development capabilities will yield a powerful engine for discovering novel drugs," said Dr. Michael Flavin, Chief Executive Officer of MediChem. "deCODE has proven that its unique population genomics approach can efficiently identify novel targets in major therapeutic areas. We believe that with our proteomics and medicinal chemistry skills, the combined company is positioned to create greater value for shareholders."
MediChem enhances deCODE's ability to maximize downstream value from its gene discoveries. Founded in 1987, MediChem (http://www.medichem.com) is a full-service drug discovery technology and services company that uses its high-throughput integrated chemistry platform to streamline genomics-based drug discovery and development. MediChem currently has 163 employees, including 107 chemists, 12 molecular biologists and 9 protein crystallographers. The company has substantial expertise in structural proteomics; lead discovery and optimization; combinatorial, computational and medicinal chemistry; biocatalysis; analytical and separations chemistry; chemical synthesis and scale-up; and clinical trials management and regulatory approvals.
The merged company will continue to provide drug discovery services to MediChem's pharmaceutical and biotechnology customers. These include 3M Pharmaceuticals, Abbott Laboratories, Allergan, Amgen, AstraZeneca, Bristol Myers Squibb, Degussa, DuPont Crop Protection, Eli Lilly, Elitra Pharmaceuticals, Genta, GlaxoSmithKline, F.Hoffmann-La Roche, Johnson & Johnson, Neurocrine Biosciences, OSI Pharmaceuticals, Pfizer, Pharmacia, and Rigel Pharmaceuticals.
The merger will also provide deCODE with state-of-the-art U.S. research facilities, including MediChem's 100,000 square-foot discovery center in Woodridge, Illinois and its 40,000 square-foot development center in Lemont, Illinois. Also part of this acquisition are MediChem's three wholly-owned subsidiaries: ThermoGen, which has proprietary technologies in protein expression and biocatalysis, Emerald BioStructures, based near Seattle, which is focused on high-throughput structural proteomics, and Advanced X-Ray Analytical Services, which provides state-of-the-art protein X-ray analysis at Argonne National Laboratory's Advanced Photon Source.<<
snip
A rather odd fit for deCODE, I would think, perhaps they'll spit some parts out later?
Sale prices to follow in a subsequent post.
Cheers, Tuck |
