Alza Corp. shares slipped $1.13 on Tuesday, closing at $81.13,after the company said it would take $100 million in one-timecharges against earnings in the fourth quarter of 1991.
The charges relate to Alza's decision, also announced Tuesday,to exercise its option to acquire all 3.2 million sharesoutstanding of its Bio-Electro Systems Inc. spinoff and torestructure an acquisition from On-Site Therapeutics.
Alza also said its board has approved a 2-for-1 split of Alza'sclass A common stock.
The exercise price to be paid by Alza (AMEX:AZA) for the BESshares is $23 per share, to be paid in Alza class A commonstock. Fractional Alza shares will be paid in cash. After Alza'sstock splits, each BES share will be exchanged for 0.5772 Alzashares at the closing of the purchase option on Feb. 7, 1992.
BES, formed in 1988 through a unit offering to Alzastockholders, is developing drug delivery systems usingelectrotransport and bioerodible polymer drug deliverytechnologies.
Alza will acquire from On-Site of Wayland, Mass., European andJapanese marketing rights for Actisite, a polymeric fiber for thesustained release of tetracycline to treat periodontitis. Actisitewas jointly developed by Alza and On-Site. A previouslyannounced U.S. marketing arrangement between Alza andProctor & Gamble isn't affected by the new arrangement.
The $100 million charges will include a $75 million non-cashcharge relating to the purchase price for the BES shares, as wellas BES liabilities, to be assumed by Alza; costs of the BESacquisition; and costs related to the restructuring of Alza'sarrangements with On-Site, including the acquisition ofinternational Actisite marketing rights.
The stock split will be effective for stockholders of record as ofNov. 29. Alza's $30 warrants will also be split 2 for 1, with eachwarrant then being exercisable for one share of Alza stock at$15 per share.
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