Sphinx Pharmaceuticals Corp. announced Friday that it intendsto acquire Genesis Pharmaceuticals Inc. through an exchange ofstock in a non-cash merger.
Under the terms of this agreement, Sphinx of Durham, N.C., willacquire privately held Genesis of Cambridge, Mass., and alloutstanding stock. Genesis' shareholders will receive 650,000shares of Sphinx common stock and warrants to purchase250,000 additional shares of Sphinx common stock. Thewarrants are exercisable upon attaining specific U.S. regulatorymilestones for a therapeutic drug candidate resulting fromGenesis' molecular diversity program. The closing, which shouldbe completed in March, is subject to various conditions, butdoes not require the approval of Sphinx shareholders, said W.Bennett Love, Sphinx's director of business development.
Sphinx expects to use Genesis' proprietary technology, termeddouble combinatorial diversity generation, to generate largelibraries of low molecular weight organic molecules to use ashighly potent and selective regulators of its enzyme targets.
As well, Sphinx is banking on the combination of Genesis'organic molecule library and its own automated biologicalscreening assays to result in a faster lead time to developingpotential drugs at a lower cost than usually associated withdrug discovery programs.
Sphinx is developing therapeutics based on the role of cellmembrane lipids in regulating cellular responses via signaltransduction -- as second messengers, for example. Thecompany has developed a technology to discover smallmolecule compounds that control the protein kinase C (PKC)family of enzymes that the lipids regulate.
PKCs play a key role in regulating cellular functions such as cellproliferation, platelet aggregation and white blood cellactivation. Sphinx filed an investigational new drug (IND)application in early January to investigate the ability of one ofthese PKC inhibitors, which it calls Kynacyte, to enhance theefficacy of chemotherapeutic drugs in treating solid tumors.
Sphinx raised $75 million through an initial public offering of 5million shares of common stock at $15 per share in the hotmarket of January 1992. Sphinx currently has 12 million fullydiluted shares outstanding, and ended 1992 with $57.3 millionin cash and marketable securities, Love told BioWorld.
The stock (NASDAQ:SPHX) closed unchanged Friday at $6.25 ashare.
-- Jennifer Van Brunt Senior Editor
(c) 1997 American Health Consultants. All rights reserved.