SOUTH SAN FRANCISCO and LA JOLLA, Calif.--(BUSINESS WIRE)--
Nov. 3, 1997--Arris Pharmaceutical Corporation (NASDAQ:ARRS) and
Sequana Therapeutics Inc. (Nasdaq: SQNA) of La Jolla, CA, announced
today that they have signed a definitive agreement pursuant to which
Arris will acquire all of the outstanding stock of Sequana for Arris
Common Stock. Under the terms of the agreement, Arris will issue
1.35 shares of Arris Common Stock for each share of Sequana Common
Stock, giving the transaction a value of approximately $166 million.
The combined company will be named AxyS Pharmaceuticals, Inc. and
will trade on the Nasdaq National Market System. The acquisition
will be accounted for as a "purchase" and is expected to result in a
substantial charge related to "in-process" technology when the
transaction is completed, which is currently expected to take place
in early 1998. The transaction is expected to qualify as a tax-free
reorganization. The transaction has been approved by the Boards of
Directors of both corporations. Certain stockholders owning
approximately 19% of the outstanding Common Stock of Sequana have
agreed to vote their shares in favor of the merger.
According to John Walker, Arris president and chief executive
officer, "By merging the two companies, we believe we have created
the first biotechnology company that has capabilities extending from
gene-to-drug. The newly created entity has not only the broadest but
the deepest technology platform in the biotechnology industry,
encompassing genomics through chemistry and pharmacology. Moreover,
with this acquisition, we will be able to capture the full value of
drug discovery from novel therapeutic targets to novel drugs. In
addition, we intend to exploit multiple business opportunities
represented in combinatorial chemistry, pharmacogenomics,
diagnostics, and new therapeutics."
Kevin Kinsella, president and chief executive officer of Sequana
stated, "AxyS Pharmaceuticals will be the only biotechnology company
with critical mass extending from genomics through to clinical
development and, in my opinion, the only company that has built the
essential bridge to allow identification of the genetic basis of a
disease and design of compounds that will actually modulate the gene
or its protein by-products. With over 320 researchers and nearly 400
total employees, AxyS becomes one of the most highly enabled biotech
companies in the industry upon its formation. The strengths of the
combined operations provide powerful and new opportunities to
identify novel drugs for novel targets."
Walker noted that AxyS expects to retain sites at all existing
Arris and Sequana locations: in South San Francisco where Arris
currently has a facility; in La Jolla, the site of Sequana's
headquarters, as well as in Cambridge, Massachusetts where Sequana's
subsidiary, NemaPharm, Inc. is located. AxyS's chief executive
officer will be John Walker, chief executive officer of Arris. The
La Jolla and Cambridge units will be managed by Daniel Petree,
executive vice president of Arris who will assume the position of
chief operating officer of Axy S. Petree will relocate to La Jolla
where research will be managed by Dr. Timothy Harris, senior vice
president, research at Sequana. Dr. Michael Venuti, vice president,
research and chief technical officer at Arris will retain
responsibility for the current small molecule research portfolio in
South San Francisco.
"The company we are creating brings together for the first time
advanced genomics techniques with state-of-the-art structure-based
drug design, combinatorial chemistry, medicinal chemistry, and
clinical development resources. Extending from genomics forward,
AxyS has a uniquely enabled platform and is a company significantly
broadened in scope with respect to both partnered and proprietary
programs. Specifically, the collaborative programs combining
pharmaceutical leaders such as GlaxoWellcome, Merck, SmithKline
Beecham, Boehringer-Ingelheim Corange (Roche), Bayer AG, Pharmacia &
Upjohn, Warner Lambert, Amgen, Abbott and others, represent an
announced deal value of more than $500 million. In addition, these
programs are complementary. Sequana's programs have been oriented at
identifying the genetic basis of disease; Arris' at creating small
molecule compounds that inhibit proteases, the protein products that
are involved in many chronic diseases," Walker added.
Morgan Stanley acted as advisor to Arris, while Lehman Brothers
provided financial advice to Sequana.
Sequana Therapeutics, Inc. is a leading genomics company that
uses industrial-scale gene finding technologies and functional
genomics to develop products aimed at diagnosing and treating common
human disease. With ongoing gene discovery program in asthma,
diabetes, obesity, osteoporosis, schizophrenia and manic depression,
and developing functional genomics programs' in Alzheimer's disease
and other important disease areas, Sequana is well-positioned to
find disease-causing genes, determine their biological function, and
translate gene discoveries into novel and therapeutic products.
Arris Pharmaceutical uses an integrated drug discovery approach
combining structure-based drug design, combinatorial chemistry and
its proprietary Delta Technology to discover and develop small
molecule therapeutics for existing markets where available therapies
have significant limitations. Arris' research focus is
protease-based discovery programs targeting the inhibition of enzymes
implicated in inflammatory and certain other diseases such as asthma,
blood clotting disorders, arthritis, osteoporosis, cancer and various
infectious diseases.
This release contains forward-looking statements that involve
risks and uncertainties. Factors that could cause or contribute to
such differences include, but are not limited to, the potential
inability to complete the merger as scheduled, or at all, potential
problems associated with integrating the two companies, including the
risk that key employees will choose to leave, acceptance of the
combined companies by corporate partners and the market, as well as
those associated with the ongoing businesses of each Company as
discussed in the Annual Report on Form 10-K for the year ending
December 31, 1996 for each Company.
CONTACT: Arris Pharmaceutical
Frederick J. Ruegsegger, V.P., CFO, 415-829-1000
Shari Annes, V.P., Investor Relations, in New York
on Nov. 3, 212-696-4455 ext. 204
Internet: arris.com
or
Sequana Therapeutics
Scott Salka, V.P. Operations, CFO, 619-646-8225
Bob Giargiari, Investor Relations, in New York
on Nov. 3, 212-696-4455 ext. 204
Internet: sequana.com
KEYWORD: CALIFORNIA MASSACHUSETTS
INDUSTRY KEYWORD: MEDICINE PHARMACEUTICAL BIOTECHNOLOGY
MERGERS/ACQ
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