NEW YORK, July 26 – Deltagen has signed an agreement to acquire functional proteomics company Arcaris in a cash and stock deal, the companies said Thursday.
To acquire Arcaris, Deltagen will issue 765,000 new shares of Deltagen common stock, pay $450,000 in cash, and reserve 50,000 shares of Deltagen common stock for Arcaris employee options. Based on Deltagen’s closing price Wednesday of $8.84, the combined cash and stock has a value of about $7.7 million. In addition, if Arcaris achieves certain milestones, Deltagen will pay Arcaris shareholders an additional 550,000 shares, valued at about $4.8 million based on Wednesday's closing price.
Deltagen, based in Menlo Park, Calif., has developed a database of functionally annotated mammalian genes based on data from mouse gene knockout models. Arcaris, to be renamed Deltagen Proteomics, will add its technology for generating peptide probes, studying their effects in cell-based assays, and detecting the probes to find the proteins bound to them. In addition, Arcaris will help Deltagen develop screens for small molecules against the protein drug targets the companies identify.
"The acquisition of Arcaris is an important strategic extension to our current and future target validation and drug discovery platform,” William Matthews, CEO of Deltagen, said in a statement. “Having the ability to identify potential cellular targets that can be modulated with small molecules will clearly expand our own research efforts into new therapeutic classes as well as generating novel drug targets," he added.
Arcaris’ current president and CEO, Alexander Kamb, will join Deltagen's management team as vice president of research and development at Deltagen Proteomics. Arcaris currently has 28 employees, with 22 dedicated to research.
Deltagen’s subscribers to DeltaBase, its database of mammalian gene function information, are GlaxoSmithKline, Pfizer, and Vertex Pharmaceuticals. The company also provides drug target discovery services for GlaxoSmithKline, Merck, Pfizer, and Schering-Plough Research Institute.