By Kim Coghill

Washington Editor

Discovery Partners International Inc. (DPI) said it will double its staff and business capacity through the acquisition of Systems Integration Drug Discovery Company Inc. (SIDDCO), a privately held firm that specializes in providing chemistry services and compound libraries to biopharmaceutical and pharmaceutical companies.

Riccardo Pigliucci, CEO for San Diego-based DPI, would not go into detail about terms of the purchase except to say it will be a cash transaction and "before goodwill, it will be a positive transaction." The deal is expected to close in mid- to late January.

According to a statement released by DPI, the acquisition is not expected to be dilutive to earnings in 2001.

DPI sells services and tools to accelerate drug discovery and development processes. Specifically, the company offers assay development, high-throughput screening, library design and library synthesis for lead identification and optimization.

SIDDCO's technologies include combinatorial chemistry to rapidly synthesize thousands to millions of new compounds that are potential pharmaceuticals, High Density Miniaturized Screening for testing hundreds of thousands of compounds per day and Multi-Array Plate Screenings, a proprietary gene-to-screen technology that permits simultaneous screening of many targets.

Through the acquisition, Pigliucci said, "We will build a very large and very powerful chemistry services compound operation. SIDDCO has a strong group of chemists - there are more than 50 - and half have a Ph.D. They have a different chemistry than what we have, so we will increase our portfolio, increase our size and add customers."

Pigliucci said DPI will maintain and likely expand SIDDCO's headquarters, located in Tucson, Ariz. Upon completion of the acquisition, DPI will have about 250 employees.

DPI was formed in 1998 and in July raised $90 million in its initial public offering of 5 million shares of common stock at $18 per share. (See BioWorld Today, Aug. 1, 2000.)

It has collaborations with other companies, including Maxia Pharmaceuticals Inc., also of San Diego, to design and synthesize compounds useful to Maxia's research and development programs.

DPI has a multiyear agreement with Procter & Gamble Co., of Cincinnati, in which ChemRx Advanced Technologies, a division of DPI, provides P&G with compounds during a three-year period, with the option of providing hit follow-up and lead optimization.

In September, DPI's division, Irori Inc., delivered its first NanoKan Ultra High Throughput Synthesis System for Aventis Pharma AG's Drug Innovation and Approval facility in Tucson. NanoKan systems are based on Irori's Directed Sorting process, a split-and-pool approach to synthesizing compounds using labeled miniaturized microreactors.

In early 2000, DPI acquired three businesses: Axys Advanced Technologies Inc., of South San Francisco; Discovery Technologies Ltd., of San Diego; and Structural Proteomics. (See BioWorld Today, May 11, 2000; and April 13, 2000.)

DPI's stock (NASDAQ: DPII) closed Friday at $12.312, up 6.25 cents.