INDIANAPOLIS, and SAN DIEGO, July 8, 2008 /PRNewswire-FirstCall via COMTEX News Network/ -- Eli Lilly and Company (NYSE: LLY) and SGX Pharmaceuticals, Inc. (Nasdaq: SGXP) have announced that the companies have signed a definitive merger agreement providing for the acquisition of SGX in an all-cash transaction. SGX, based in San Diego, California, is a biotechnology company focused on drug discovery and development in the area of oncology. Under the terms of the agreement, Lilly will acquire all of the outstanding shares of SGX common stock at a price of $3.00 per share, for a total purchase price of approximately $64.0 million.
The acquisition will allow Lilly to integrate SGX's structure-guided drug discovery platform into its drug discovery efforts. It will also give Lilly access to FAST , SGX's fragment-based, protein structure guided drug discovery technology, and to a portfolio of pre-clinical oncology compounds focused on a number of high-value kinase targets.
Since entering into an initial collaboration in 2003, Lilly has partnered with SGX to determine 3-dimensional structures of key Lilly drug targets utilizing SGX's proprietary x-ray crystallography technology. The ongoing collaboration also provides Lilly with access to the SGX synchrotron beamline facility, SGX-CAT, which is a state-of-the-art synchrotron facility enabling X-ray crystallography and protein structure determination built by SGX at the Advanced Photon Source (APS) located at the Department of Energy's Argonne National Laboratory in Chicago, IL.
"After a successful collaboration over the past several years, we are excited to bring the scientific and technological expertise of SGX into Lilly's research organization, while at the same time expanding our presence in the San Diego area," commented Steven M. Paul, M.D., executive vice president, science and technology for Lilly. "We will leverage the combined resources of both companies to strengthen our structural biology capabilities and seek out innovative therapies for patients."
"We believe that this merger provides an excellent opportunity for the potential of SGX's platform and pipeline to be realized, while simultaneously providing our shareholders with attractive financial terms," said Mike Grey, CEO of SGX Pharmaceuticals. "As we have evolved from a platform technology organization to a drug discovery company, we believe that this transaction represents a timely opportunity to place our programs and technology assets in the hands of a world-class company with the experience and resources to advance innovative treatments for patients."
The board of directors of SGX voted unanimously to approve the merger agreement and to recommend that its shareholders approve the transaction. The transaction is expected to close in the second half of 2008. Closing is contingent upon approval by SGX shareholders, clearance under the Hart-Scott-Rodino Antitrust Improvements Act and certain other closing conditions. Upon the closing of the transaction, Lilly will incur a one-time charge to earnings for acquired in-process research and development, but it is premature to estimate what that charge will be.
SGX Pharmaceuticals, Inc. is a biotechnology company focused on the discovery, development and commercialization of novel, targeted therapeutics directed at addressing unmet medical needs in oncology. Its drug development programs target the MET receptor tyrosine kinase, an enzyme implicated in a broad array of cancers, and the BCR-ABL tyrosine kinase enzyme for the treatment of Chronic Myelogenous Leukemia, or CML. Its drug discovery activities are focused on a portfolio of other protein and enzyme targets that have been implicated in human cancers, including JAK2, RON, ALK, RAS and IKKe. More information on the pipeline and drug discovery platform can be found at www.sgxpharma.com and in SGX's various filings with the Securities and Exchange Commission.
Eli Lilly and Company, a leading innovation-driven corporation, is developing a growing portfolio of first-in-class and best-in-class pharmaceutical products by applying the latest research from its own worldwide laboratories and from collaborations with eminent scientific organizations. Headquartered in Indianapolis, Ind., Lilly provides answers -- through medicines and information -- for some of the world's most urgent medical needs. Additional information about Lilly is available at www.lilly.com. C-LLY