NEW YORK, June 13 – Lexicon Genetics said Wednesday it would acquire Coelacanth in a deal valued at about $32 million, reflecting Lexicon's efforts to build its drug discovery capabilities.
Lexicon’s deal to acquire Coelacanth comes on the heels of Celera's announcement earlier in the day that it was acquiring Axys Pharmaceuticals in a stock transaction deal valued at $173.4 million. The day's acquisitions reflect a growing trend in the genomics industry whereby well-funded genomics companies are using their assets to buy their way into the drug discovery sector. Recently Sequenom acquired Gemini Genomics and several months ago Lion Bioscience acquired Trega Biosciences.
Under the terms of the agreement, Lexicon, of The Woodlands, Texas, will absorb Coelacanth by establishing a new division called Lexicon Pharmaceuticals. Coelacanth, of Princeton, NJ, engages in drug discovery utilizing its chemical research, automated combinatorial library production, and in vitro lead filtering technology.
In the merger, Lexicon will issue shares of stock with a value of approximately $32 million to be linked to the average closing price of Lexicon stock for the 30 days ending three days before the merger. The companies expect the merger to close by the end of July.
“We have accelerated our strategy to capitalize on the many high-value pharmaceutical targets that we have discovered using our gene knockout technology,” Lexicon CEO Arthur Sands said in a statement. “Combining our industrialized process of in vivo gene function discovery with an established chemistry capability will place Lexicon in a superior position to form drug discovery alliances and partnerships.”
The merger will enhance Lexicon’s generation of drug target and compound patents and attract chemists to the company, Sands added.
Coelacanth, a privately held company established in 1996, has screening libraries and an industrialized medicinal chemistry platform to create drug development candidates. Its operations are centered in its Princeton headquarters and New Brunswick, NJ manufacturing site. Its 55 employees include 38 chemists and 19 PhDs.
Coelacanth clients include Pfizer, Roche, Novartis, DuPont, and Aventis. Lexicon has said that it will keep Coelecanth’s libraries open to clients throughout 2001 and will revisit the issue at the beginning of 2002.
“We believe that Coelacanth's strengths in developing 'drug-like' libraries for hit and lead generation and its high through-put ADME screens will significantly enhance the value that Lexicon can obtain from its drug discovery programs,” Coelacanth CEO Alan Main said in a statement.
Main will become senior vice president of Lexicon Pharmaceuticals and will report to Sands, the company stated. Hartmuth Kolb has been tapped to transition from his current role as vice president of chemistry and COO of Coelacanth to a vice president position. David Boulton, currently vice president of technology and operations, had also been named a vice president in the new division.