NEW YORK, Feb 28 – Discovery Partners International, a San Diego-based provider of diverse drug discovery services, has agreed to acquire the gene profiling technology company Xenometrix for $1.7 million, the companies said Wednesday.
Under the terms of the agreement, Discovery Partners will purchase all of Xenometrix’s common stock at a share price of 59 cents per share, and Xenometrix will become a wholly owned subsidiary of Discovery Partners. The offer represents a 46 percent premium on Xenometrix's Tuesday closing price of 41 cents a share.
Xenometrix' shares, which trade over the counter on the Nasdaq, were recently trading at 52 cents a share, up 27 percent from Tuesday's close.
Both companies’ boards of directors have approved the transaction, but it has yet to be approved by Xenometrix shareholders. The companies expect the acquisition to close in the second quarter of 2001.
Xenometrix of Boulder, Colo., was profitable in 2000, but reported that it had run low on cash, with only $210,000 in cash and cash equivalents as of September 2000. The company also ran into financing problems at different points since its founding in 1994 and was forced to restructure in 1998 to shore up its resources.
This acquisition will provide Discovery Partners with unfettered access to Xenometrix’s patented gene profiling technology, which Xenometrix has licensed to Affymetrix, Aurora Biosciences, Corning, Gene Logic, GeneTrace, Genometrix, Genzyme, Motorola, Packard, Pfizer, Phase-1, Rosetta Inpharmatics, and GlaxoSmithKline.
Xenometrix also has proprietary genotoxicity technology that enables high throughput screening for genotoxicity, and its bioinformatics team has been assembling a database of gene profiles for public domain pharmaceuticals.
"The Xenometrix acquisition broadens and complements our in-vitro assay development and toxicology services," Riccardo Pigliucci, Discovery Partners’ CEO, said in a statement. "Incorporating Xenometrix's capabilities into Discovery Partners' lead optimization and chemistry services will allow scientists to determine which drug development candidates have the best combination of desirable characteristics.”
Discovery Partners will also incorporate Xenometrix’s gene profiling assays into its high throughput screening process, and will integrate its gene profiling information into its bioinformatics databases, Pigliucci said.