Maybe it just wasn't meant to be.
Just two months after announcing their intent to merge, eXegenics Inc. and Innovative Drug Delivery Systems Inc. (IDDS) ended the courtship. The companies said they determined that the merger was no longer in their best interests.
In connection with the termination, Dallas-based eXegenics will purchase a $500,000 convertible note from IDDS at face amount, and in addition pay IDDS $500,000 to defray part of the expenses incurred during the merger process.
In the proposed stock-for-stock exchange, a deal valued at $46 million, one share of privately held IDDS was to be exchanged for 3.132 shares of eXegenics common stock. eXegenics, which at the time had about 20 million fully diluted shares outstanding, would have issued about 60 million shares of common stock, including shares for outstanding IDDS options and warrants, in exchange for all of IDDS's outstanding equity interests. (See BioWorld Today, Sept. 23, 2002.)
But something didn't go as planned, though the companies declined to provide details. eXegenics did not respond to phone messages, while an IDDS official who asked not to be identified declined to comment on the terminated merger. He cited an agreement that precludes the New York-based firm from discussing the issue.
When the merger was announced, IDDS Chairman and CEO Mark Rogers told BioWorld Today, "I think it's a real marriage." For eXegenics, the move was an attempt to gain late-stage clinical products. And while the company said the products weren't necessarily synergistic with its research platforms, Quantum Core Technology and Optimized Anti-Sense Inhibitory Sequence, the merger was nevertheless designed to bring eXegenics closer to a commercial-stage company.
"The technologies at eXegenics are not complementary, per se, in terms of any synergistic sense with what is available here at IDDS," eXegenics President and CEO Ronald Goode told BioWorld Today two months ago. "But our board realized that commercialization is the key to increased shareholder value. Therefore, we jointly made the decision to go out and find a partner that had products that would put us much closer to the commercial marketplace."
Following the merger, the combined entity would have gained three lead drugs from IDDS, two of which have completed Phase II studies. The candidates, all of which are designed to treat pain, have demonstrated safety and effectiveness in early and mid-stage clinical trials. All are uniquely formulated versions of an FDA-approved compound.
Its products in clinical development in the U.S. and Europe include intranasal ketamine, intranasal morphine and intravenous diclofenac. The first two have completed Phase II studies in the U.S., while the last completed a 250-patient Phase II study in England and has been approved to begin Phase I/II in the U.S. The company's website reported preclinical development for an intranasal fentanyl product, though IDDS declined to discuss further product development plans, absent of the merger.
As to eXegenics' pipeline, it said in late June that targets to which it has rights could potentially lead to drugs to fight tuberculosis. Also this summer, the firm advanced into preclinical development a series of lead candidates that demonstrate in vitro activity against methicillin-resistant Staphylococcus aureus.
Its stock (NASDAQ:EXEG) on Tuesday gained 5 cents to close at 52 cents.