Cytogen Corp. and the company it established to finance developmentof its products _ CytoRad Inc. _ are locked in a battle overCytoRad's refusal to do just that. Cytogen's offer to buy out CytoRad'sshareholders have been spurned. And what was once a private quarrelhas gone public. Each Princeton, N.J.-based company is accusing theother of breach of contract.On Monday, CytoRad said that Cytogen's merger proposal for all ofCytoRad's common stock "was so inadequate that it did not evenprovide a basis for negotiations. No further meetings to discuss apossible merger are contemplated."William Ryan, CytoRad's chairman, said in a prepared statement,"CytoRad has provided approximately $22 million of productdevelopment funding over two years in fulfillment of its contractualobligations as part of a public financing sponsored by Cytogen. Thatconstituted 76 percent of Cytogen's revenues for 1993 and 68 percentfor 1992. Cytogen's latest action continues to demonstrate its disregardof its responsibilities to those persons who purchased CytoRad units,which include a warrant to purchase Cytogen common stock."On Tuesday, Cytogen fired back a response: Cytogen's offer topurchase all CytoRad's outstanding common stock in exchange forshares of Cytogen's common stock was made "at an exchange ratiothat would have represented a premium to recent market prices ofCytoRad's common stock."The statement said agreements between both companies "provide forthe funding by CytoRad of research and development performed byCytogen on such products. To date, CytoRad has declined to fund thework to be done in 1994 and Cytogen has notified CytoRad thatCytoRad is in breach of the applicable contract."Cytogen said it hopes to avoid litigation and believes a businesscombination of the two parties would provide a prompt and efficientresolution of the dispute. _ Philippa Maister
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