The deal, which is scheduled to take place during the first quarter of 2004, will occur following a pro rata distribution of all common shares tied to Pharmacopeia Drug Discovery, the wholly owned subsidiary through which Pharmacopeia conducts drug discovery. PDD will then apply for listing on the Nasdaq exchange.
Following the spin-off, Pharmacopeia will continue to operate its Accelrys scientific software business, and intends to change to Accelrys.
The deal must still be approved by Pharmacopeia's board of directors.
"We believe that the proposed spin-off will ... enable ... Accelrys and PDD to pursue its own focused strategy more effectively while addressing difficulties they have encountered under the current corporate structure," Joseph Mollica, Pharmacopeia's, president, chairman, CEO said in a statement.
Following the spin-off, Accelrys "will continue to design, develop, market, and support software and provide related services that facilitate the discovery and development of new products and processes in the pharmaceutical, biotechnology, chemical, petrochemical and materials industries," the company said.
The deal will not affect Accelrys' Centers of Excellence in
The move will make each unit a pure play in its respective space, "which we believe will enhance its individual prospects for success, Mollica said. "Moreover, in our view, the financial markets should be better able to assign more accurate valuations for each business."
"Over the last few years, it has become increasingly apparent to us that operating our scientific software and drug discovery businesses within a single publicly traded company has prevented each business from reaching its full potential," Mollica continued. "We believe that each company, as a stand-alone public entity with independent management, will be better able to focus on its specific objectives, adapt more readily to evolving marketplace conditions and capitalize on strategic opportunities.
"We expect that both management teams will experience new freedom to pursue business alliances and research collaborations, and invest in compelling technologies, free from the strategic constraints of the other unit's business," he said.
Following the transaction, Accelrys president Mark Emkjer will become president and CEO of the new Accelrys company. Additionally, "it is contemplated" that Ricardo Levy, Kenneth Coleman, and Paul Bartlett, each a current director of Pharmacopeia, will continue to serve as directors of Accelrys.
Pharmacopeia said it is currently looking for a president and CEO for PDD. Mollica is expected to hold onto those titles until a successor is appointed.
The company also said that Gary Costley, Frank Baldino, Jr., and James Marino, each directors of Pharmacopeia, will resign from their positions and join the board of directors.