Ligand Pharma To Buy Pharmacopeia For Up To $70M In Stock
Sep 24, 2008 18:02:12 (ET)
Ligand Pharmaceuticals Inc. (LGND) will acquire fellow biopharmaceutical company Pharmacopeia Inc. (PCOP) in an all-stock deal worth up to $70 million.
The news sent shares of Pharmacopeia soaring 28% to $1.52 in recent after-hours trading, while Ligand rose 0.8% to $3.15.
In addition, the Pharmacopeia stockholders could receive an extra $15 million in cash if Ligand further develops or markets Pharmacopeia's hypertension program by the end of 2011.
The transaction includes a collar for the exchange ratio that's attached to the value of Ligand shares. If shares remain trading between $3 and $3.75, Pharmacopeia holders will receive 0.58 shares of Ligand for each share of Pharmacopeia they hold. Under the those terms, the deal is valued at about $55 million and represents a 52% premium for Pharmacopeia holders.
But based on the value of Ligand shares, the value of the stock portion of the deal could change.
In the end, Pharmacopeia holders will own about 16% of the combined company.
"Both companies have similar growth strategies, and our respective drug discovery platforms are a great marriage of biology and chemistry resources," Ligand Chief Executive John Higgins said.
The combined firm is expected to have about $90 million in cash on hand when the deal closes in the first quarter of 2009, and expects more than $350 million in potential net operating losses.
-By David Benoit, Dow Jones Newswires; 201-938-2472; david.benoit@dowjones.com
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