Jim Shrine

ProCyte Corp. rid itself of unwanted suitors Wednesday whenScherer Healthcare Inc. and Derma Sciences Inc. said they wereending efforts intended to take over ProCyte.

Scherer, of Atlanta, and Derma Sciences, of Old Forge, Pa., tried togarner enough shareholder support to call a special meeting to oustProCyte's directors, and take other actions that would lead to a three-way merger.

Karen Hedine, ProCyte's vice president, business development andadministration, told BioWorld, "We're pleased to hear that since theboard had unanimously rejected their offer to begin with on the basisthat it would be significantly detrimental to shareholders of ProCyte.

"It's exciting for us," she said, because it will allow the company tofocus all efforts on its three-part strategy: development of its owndrugs, acquisition of later-stage technology that would allow ProCytean earlier entry into the market, and the pursuit of contractmanufacturing.

In a news release, John Borthwick, chief executive of DermaSciences, said the solicitation efforts were terminated because thelarge expense of a full solicitation was not justifiable at this time,"given the financial troubles at ProCyte and other recent events."

Borthwick said he would not comment outside of the news release,and Scherer officials did not return calls from BioWorld. The "otherevents" referred to most likely have to do with the resignations of twoScherer executives who had been pushing the merger, and the recentplummet of Scherer's stock, which made the offer even less attractiveto ProCyte. (See BioWorld Today, Feb. 28, 1995, p. 1.)

Scherer (NASDAQ:SCHR), which was trading at about $20 per sharewhen the merger was proposed in December, lost another 63 centsWednesday, closing at $5.38. Thinly traded Derma Sciences(NASDAQ:DSCI) was down 6 cents at $5, and ProCyte(NASDAQ:PRCY) lost 25 cents, closing at $2.44.

The reference to ProCyte's "financial troubles" was not clear, sincethe Kirkland, Wash., company's $40 million-plus in cash would havefunded the merged company.

Robert Scherer Jr., Scherer's chairman and CEO, said in the newrelease that the ProCyte situation would be monitored and otheravenues of approach have not been ruled out.

Also, Scherer and Derma Sciences said they will talk separatelyabout the possibility of a merger between those companies. n

(c) 1997 American Health Consultants. All rights reserved.