Telios Pharmaceuticals Inc. said late Thursday that it entered into aproposed agreement that could result in its acquisition. But a numberof conditions must be met before the deal becomes effective.
Privately held Integra LifeSciences Corp., of Plainsboro, N.J., wouldissue Integra stock to Telios shareholders after confirmation of areorganization plan by Telios. The deal also would result in Integra'sbecoming publicly traded, John Emery, the company's chieffinancial officer, told BioWorld.
Telios, of San Diego, filed for Chapter 11 bankruptcy protection onJan. 26. The company has been cutting staff and expenses whilelooking for a buyer since a trial of its lead drug, Argiden gel, failedto show efficacy for diabetic foot ulcers. That news came a weekafter the Sept. 29 closing of a securities offering that grossed Teliosabout $14.25 million.
Those participating in the offering sued Telios, and a judge ruled lastmonth that the company had to put $13 million aside pendingresolution of the lawsuit.
Telios officials could not be reached for comment. The company'schief financial officer told BioWorld on Jan. 15 that Telios had $17million in cash, including the $13 million ordered invested insecurities.
The Integra offer is contingent upon confirmation of a reorganizationplan, Telios having cash and receivables of at least $12 million, andapproval of shareholders and creditors. The agreement stipulates theconditions must be met by July 1.
Integra proposed issuing up to 4 million shares of its stock, at $8.75per share, to creditors and shareholders of Telios. The shares wouldbe reduced on a dollar-for-dollar basis if Telios has less than $13million at closing. Telios stock, last traded on Jan. 26, closed at 28cents per share.
Emery said the transaction, as proposed, would bring its sharesoutstanding to 24 million, meaning Telios has about 25 millionshares outstanding and its shareholders would get 16.7 percent of thecombined company. He also described Integra as "closely held,"with chairman and CEO Richard Caruso being a major shareholder.
Integra, which sells mostly to the surgical market, expects to reportabout $8.5 million in 1994 revenues, while showing a net loss,Emery said. The sales primarily were in the ophthalmic andhemostatic areas, he said. The company has filed a product marketapplication with the FDA for Integra Artificial Skin, a dermalextracellular matrix, Emery said.
Officials from Telios and Integra both said in a news release that thecompanies have complementary technologies, particularly in tissuerepair. n
-- Jim Shrine
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