Guilford Pharm. To Buy Gliatech
CLEVELAND (AP) _ Guilford Pharmaceuticals Inc. will buy Gliatech Inc. for $203 million in stock, the biotech companies announced Tuesday.
Gliatech develops and makes gels to prevent surgical scars and adhesions under the ADCON brand name. The company also is involved in research for treatments for attention deficit hyperactive disorder and Alzheimer’s disease.
Guilford, based in Baltimore, is developing products for treatment of cancer, neurological diseases and spinal cord injuries. The combined company would have three marketed products and nine products in clinical development.
``This is an exciting opportunity to combine our strengths and expertise and create a stronger, product-focused organization with tremendous growth potential,″ said Craig Smith, Guilford’s president and chief executive.
Shareholders of Gliatech would receive 1.38 shares of Guilford for each share they own. Gliatech has about 9.5 million shares. The price is based on Guilford’s closing stock price Friday of $15.50.
Guilford Pharmaceuticals reported a loss of $26.9 million last year, or $1.31 per share, on sales of $21.6 million. Gliatech had a 1999 loss of $395,000, or 4 cents per share, on sales of $26.5 million.
The merger is subject to approval of shareholders and regulators. The companies expect to close the deal in the third quarter.
In trading Tuesday on the Nasdaq, Gliatech stock jumped $2.375 to close at $18.75, while Guilford’s shares were down $1.375 to $14.125.
The merged company would keep the Guilford Pharmaceuticals name and be based in Baltimore.
Smith would retain his position with the merged company. Thomas O. Oesterling, chairman and chief executive of Gliatech, would join the board.