In a move designed to combine complementary technologies,Alkermes Inc. announced Friday that it has signed a definitiveagreement to merge with Enyztech of Cambridge, Mass.
Under the terms of the agreement, Alkermes, also ofCambridge, will exchange 2.9 million shares of its commonstock (NASDAQ:ALKS) for all outstanding shares of Enzytechcapital stock. Alkermes could not release further financialdetail until the registration is filed with the Securities andExchange Commission, said Richard Pops, Alkermes' presidentand chief executive officer.
Alkermes stock gained 38 cents a share on Friday to close at$9.13.
The transaction, approved by the boards of directors of bothcompanies, is subject to shareholder approval.
Alkermes will grant to certain of Enzytech's employees andconsultants options to purchase approximately 710,000 sharesof Alkermes common stock. Upon completion of the agreement,about 22 percent of fully diluted Alkermes common stock willhave been traded.
Pops said that he doesn't expect much restructuring as a resultof the merger, which should be final early in 1993. "They arevery complementary organizations," he said.
Enzytech is developing products based on its proprietary drugdelivery systems, which use microencapsulation technologiesthat enable injectable, sustained-release or oral formulations tobe made of proteins and peptides, long considered a challengein the scientific community due to the difficulty of thegastrointestinal tract to absorb such large molecules.
Enzytech's two leading technologies are ProLease, an injectablesustained release system, and OraLease, an oral drug deliverysystem with the potential of converting drugs that requireinjection into products that can be administered as a tablet orcapsule (many protein-based products cannot be given orally).
The company's ProLease formulation of a hormone for thetreatment of acute exacerbations of multiple sclerosis is inPhase I clinical trials.
The deal gives Alkermes not only additional productcandidates, but also the opportunity to draw on Enzytech'stechnologies.
Alkermes has been developing methods to deliver to the brainneurotrophic factors such as nerve growth factor, and"Enzytech's technology could be brought to bear on Alkermes'fusion protein project very clearly," Pops said. "It may enableus to have a practical means of delivering these factors topatients with chronic neurodegenerative diseases."
The merger is "strategically appropriate" for both companies,said Russell Hays, Enzytech's president and chief executiveofficer. "The combined business will be a much more balancedportfolio now. Alkermes is longer-term, higher-risk, and ours isnearer-term with less risk."
Hays added that the deal will allow Enzytech to provideliquidity for its shareholders and access to a substantialfinancial base.
David Steinberg, an analyst at Volpe Welte in San Francisco,said the merger makes Alkermes a significant player in thedrug delivery business. "The combination offers explosivetechnology involving two difficult areas, the blood brain barrierand the oral delivery of proteins," he said.
-- Michelle Slade Associate Editor
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