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Dissenting Pharmacopeia Shareholders: Accelrys Doesn t Need Eos

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Mudslinging between Pharmacopeia shareholders and management over the proposed acquisition of Eos Biotechnology showed no signs of letting up last week, as Pharmacopeia’s management fired off yet another letter begging shareholders to vote in favor of the deal.

The latest letter from Pharmacopeia CEO Joseph Mollica, dated January 10, advised shareholders that independent proxy advisory firm Institutional Shareholder Services is in favor of the merger.

Most of the public statements on the matter have touched only lightly on the Accelrys unit of the company, however, choosing to focus instead on the drug discovery capabilities that Eos will or will not bring.

Accelrys COO Mike Stapleton was tight-lipped about Accelrys’ role in the controversy. “The continuing success and innovation of Accelrys is important to shareholders,” he said of the matter.

Samuel Isaly, managing partner at OrbiMed Advisors, the lead shareholder in Pharmacopeia and a vocal opponent of the merger, was more forthcoming with his feelings on the subject. Despite the claims of Pharmacopeia management that the addition of Eos’ gene expression databases will enhance the Accelrys product line, “We’re not yet convinced that the Eos database is helpful to Accelrys,” Isaly told BioInform. “We don’t think that Pharmacopeia needs to buy Eos to get access to the Eos database.”

Additionally, Isaly said, “We would be quite supportive of a separation of Pharmacopeia so that Accelrys were a standalone legal entity or a legal entity combined with another legal entity in the software or bioinformatics area.” On this point, Isaly and the Pharmacopeia management may see eye-to-eye. The company suggested floating the software unit in its second-quarter earnings statement [BioInform 07-23-01].

The main problem that OrbiMed and other shareholders have with the proposed merger is that Pharmacopeia would be “integrating backwards,” according to Isaly. “It is securing drug targets, which to us are a dime a dozen,” he said. In addition, shareholders are concerned that Pharmacopeia’s stock is undervalued while Eos stock is overvalued.

“We don’t feel we are dissident shareholders,” Isaly said. “We feel that we are positive shareholders in the face of dissident management.”

— BT

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