ProCyte Corp. officials said they did not respond to acquisitionovertures that Scherer Healthcare Inc. had requested by Thursday.
"We're not prepared to respond to that," Joseph Ashley, ProCyte'spresident and CEO, told BioWorld. "We're not beholden to answerin any specific time frame. We have not heard back from ourbankers. Until that happens and we have a board meeting, we haveno response."
Scherer, of Atlanta, and Derma Sciences Inc., of Old Forge, Pa.,jointly announced on Dec. 8 that they proposed acquiring cash-richProCyte in a three-way merger that would be completed through aswap of stock. Scherer and Derma, which recently bought about 5percent of ProCyte's stock, had asked the Kirkland, Wash., companyto respond by Thursday.
"We are very interested in this transaction taking place," JamesBrands, Scherer's vice chairman, told BioWorld. "It makes a lot ofsense. Our group is the largest shareholder of ProCyte, as far as weknow, so we are very interested in the company doing what makesthe most sense on behalf of its shareholders.
"We're not attempting in any way to hold their feet to the fire,"Brands said. "We believed it was important to establish some timeframe to hopefully move forward to the next discussion."
Derma's CEO, John Borthwick, told BioWorld the combination ofthe three companies would benefit stockholders of each. Derma, acompany focused on zinc-based wound-care products, hasdistribution and development capabilities, he said. Scherer, throughits Biofir Inc. subsidiary, has development talents. And ProCyte hasresearch and development capabilities. The parts, anchored withScherer, which had fiscal year 1994 sales of $43 million, wouldresult in a diversified health care company, he said.
"We started the original talks with [ProCyte's] Joe Ashley about thepossibility of a business combination," Borthwick said. "They weregoing to review our technology. That was the last word we got backfrom Joe."
ProCyte reported cash and equivalents of $46.3 million on Sept. 30,with a net loss of $3.5 million for the quarter. But its stock price hassuffered since the Oct. 17 release of trial results showing Iamin gel,its lead product, failed to show statistical significance in healingdiabetic plantar ulcers.
ProCyte officials adopted a shareholder rights plan after the Scherer-Derma proposal last week. The plan provides for the distribution ofone preferred share purchase right on each outstanding share. Thepreferred share was to be issued by today.
Derma and Scherer each are closely held and thinly tradedcompanies. They have one common board member, RobertNaismith, the president of Biofir. Derma has about 4 million sharesoutstanding _ 1.5 million are held by Borthwick family members,1.5 million are held by individuals under a lock-up agreement untilJune 13, and 900,000 shares were floated went Derma went publiclast May 13, Borthwick said. Scherer has 4.23 million sharesoutstanding, 60 percent of which are held by director Robert SchererJr. n
-- Jim Shrine
(c) 1997 American Health Consultants. All rights reserved.