NEW YORK, Jan. 8—Iceland's DeCode genetics will acquire MediChem Life Sciences in a stock-swap deal valued at roughly $84 million, the companies announced early on Tuesday. The acquisition is said to bolster DeCode's chemistry and structural proteomics technology and to accelerate its progress toward in-house drug discovery and development.
By the terms of the merger, each share of MediChem common stock will be exchanged for 0.3099 shares of newly issued DeCode common stock, corresponding to a current purchase price of $3.04 for each MediChem share. MediChem shareholders will own approximately 15.7 percent of the combined company's capital stock.
In order to complete the deal, DeCode plans to issue about 8.3 million shares of common stock and assume all outstanding MediChem options.
The merger is expected to close in the second quarter of 2002, subject to shareholder approval. The transaction has already been approved by the boards of directors of both companies.
"Today's announcement underscores our commitment to proprietary drug development," said DeCode CEO Kari Stefansson. "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."
DeCode has filed patent applications on more then 350 genes discovered through its population genomics database, and has isolated genes linked to peripheral vascular disease, cerebrovascular disease, schizophrenia, macular degeneration, non-insulin-dependent diabetes, osteoporosis, and osteoarthritis.
As part of the deal, DeCode will continue MediChem's drug-discovery service deals with major pharmaceutical and biotechnology customers like Abbott Labs, Amgen, Bristol-Myers Squibb, Eli Lilly, GlaxoSmithKline, F. Hoffman-La Roche, OSI Pharmaceuticals, and others. It will also assume MediChem's 100,000-square-foot drug-discovery labs in Woodridge, Ill., and the company's 40,000-square-foot center in Lemont, Ill.