FOR IMMEDIATE RELEASE LEXICON GENETICS TO ACQUIRE COELACANTH CORPORATION LEXICON ESTABLISHES INTEGRATED GENE-TO-LEAD DRUG DISCOVERY CAPABILITIES
THE WOODLANDS, TEXAS AND PRINCETON, N.J. - JUNE 13, 2001 - Lexicon Genetics
Incorporated (Nasdaq: LEXG), a leader in discovering the functions of genes, and
Coelacanth Corporation, a privately-held company that uses proprietary chemistry
technologies to rapidly discover new chemical entities for drug development,
today announced they have entered into a definitive merger agreement under which
Lexicon will acquire 100 percent of Coelacanth's outstanding capital stock in a
tax-free reorganization. Lexicon Genetics will establish a division called
Lexicon Pharmaceuticals, based in Princeton, N.J., that will combine Lexicon's
novel, functionally defined targets from the human genome with Coelacanth
Corporation's high performance chemistry technologies to discover new drugs.
Under the terms of the agreement, Lexicon will issue shares of Lexicon stock in
the merger with a value of $32 million based on the average closing price of
Lexicon's common stock for the 30 days ending three days prior to the effective
time of the merger, subject to a collar, and will assume Coelacanth's
outstanding options and warrants. The transaction, excluding merger-related
expenses, is not expected to materially affect Lexicon's previously announced
financial projections for 2001. The parties expect the merger to close by the
end of July.
"We have accelerated our strategy to capitalize on the many high-value
pharmaceutical targets that we have discovered using our gene knockout
technology," said Arthur T. Sands, M.D., Ph.D., President and Chief Executive
Officer of Lexicon. "Combining our industrialized process of in vivo gene
function discovery with an established chemistry capability will place Lexicon
in a superior position to form drug discovery alliances and partnerships.
Importantly, our ability to generate meaningful patents on both drug targets and
compounds will be enhanced. Lexicon also obtains a strong geographical base from
which to attract top chemists to our organization in order to build on the
existing chemistry base. We believe this acquisition will fortify Lexicon's
position as a leading drug discovery company of the post-genome era."
Upon closing of the acquisition, which is subject to certain regulatory and
other customary conditions, Coelacanth will form the core of Lexicon
Pharmaceuticals, a new division of Lexicon Genetics responsible for small
molecule compound discovery. Alan J. Main, Ph.D., current President and Chief
Executive Officer of Coelacanth and former Senior Vice President, Research, at
Novartis Pharmaceuticals Corp., will join Lexicon's management team as Senior
Vice President of Lexicon Pharmaceuticals, reporting to Dr. Sands, Lexicon's
President and Chief Executive Officer. Also joining Lexicon as Vice Presidents
will be Hartmuth Kolb, Ph.D., currently Coelacanth's Vice President of Chemistry
and Chief Operating Officer and formerly of Novartis and Scripps Research
Institute, and David Boulton, currently Coelacanth's Vice President of
Technology and Operations and formerly of ArQule Inc. and Merck & Co., Inc.
Coelacanth has 55 employees, including 38 chemists and 19 Ph.D.'s. The company
operates out of 40,000 square feet of leased space near Princeton, New Jersey,
and 5,000 square feet of manufacturing space in New Brunswick.
"We believe that Coelacanth's strengths in developing 'drug-like' libraries for
hit and lead generation and its high through-put ADME screens will significantly
enhance the value that Lexicon can obtain from its drug discovery programs," Dr.
Main said. "The commitments made to our chemical libraries by Pfizer, Roche,
Novartis, DuPont, Aventis and 13 other leading pharmaceutical and biotechnology
companies substantiate the advantages of our integrated, high-performance
chemistry platform compared to other approaches in our industry. Most
importantly, our goal of leveraging our world-class chemistry technologies for
the development of next generation therapeutics, based on the information
generated by the genomics revolution, complements Lexicon's strategy of using
proprietary technology to systematically discover the medical uses of genes from
the human genome and translate those findings into new pharmaceutical products."
The timeliness of Lexicon's decision to acquire a critical mass of chemistry
expertise is prompted by its success in large-scale gene function discovery
using its proprietary gene knockout technologies. Lexicon's Genome5000 and
LexVision(TM) programs have dramatically accelerated Lexicon's initial objective
of validating large numbers of novel drug targets from the human genome. Through
the Genome5000 program, Lexicon is determining the in vivo functions of 5,000 of
the most promising genes for pharmaceutical discovery over five years. The
company's LexVision program uses an integrated platform of leading-edge medical
technologies to discover the function of the gene and the protein it encodes
across a variety of human disease processes in oncology, aging, neurology,
endocrinology, diabetes, obesity, heart disease, hematology, immunology and
As Coelacanth integrates into Lexicon's drug discovery platform, Lexicon plans
to make Coelacanth's libraries available to its customers for the remainder of
2001 and will revisit Coelacanth's strategy for selling the libraries beginning
Lexicon Genetics Incorporated is a drug discovery company of the post-genome
era, using gene knockout technology to define the functions of genes for the
discovery of pharmaceutical products. Lexicon is using this technology to fuel
drug discovery programs in cancer, cardiovascular disease, immune disorders,
neurological disease, diabetes and obesity. Lexicon has established drug
discovery alliances and functional genomics collaborations with leading
pharmaceutical and biotechnology companies, research institutes and academic
institutions throughout the world to commercialize its technology and further
develop its discoveries. Additional information about the Company is available
through Lexicon's corporate website, www.lexicon-genetics.com.
Coelacanth Corporation, founded in 1996, is a privately held company that uses
its proprietary technology, ClickChem(TM), to create sets of novel building
blocks which are used for the production of innovative drug-like compound sets
that shorten lead discovery and lead optimization time for drug development.
Pfizer, Roche, Novartis, DuPont, Monsanto, Tularik and Aventis are among the 18
leading pharmaceutical and biotechnology companies that have become customers
for Coelacanth's novel, sophisticated screening libraries and industrialized
medicinal chemistry platform. In parallel, Coelacanth uses its proprietary
technologies in drug discovery collaborations to generate a stream of leads and
drug development candidates. Additional information about Coelacanth is
available through its website, www.coelacorp.com. Coelacanth has been advised in
connection with the merger by CIBC World Markets Corp.
CONFERENCE CALL DETAILS
Lexicon Genetics will host a conference call (Thursday, June 14) that will be
broadcast live over the Internet, beginning at 9 a.m. EDT. Arthur T. Sands,
M.D., Ph.D., President and Chief Executive Officer of Lexicon, Julia P. Gregory,
Executive Vice President and Chief Financial Officer of Lexicon, and Alan J.
Main, Ph.D., President and Chief Executive Officer of Coelacanth will discuss
the proposed merger, and more details about the transaction.
The live webcast can be accessed by visiting Lexicon's website at
www.lexicon-genetics.com or www.streetevents.com. Following the webcast, an
archived version of the call will be available on Lexicon's website through June
19. Investors may listen to the call by dialing 800/210-9006 (domestic), pass
code: 735351; or 719/457-2621 (international), pass code: 735351. A replay of
the call will be available until 6 p.m. EDT on June 19. The number for domestic
callers is 888/203-1112 pass code 735351 and international callers should dial
719/457-0820 pass code 735351.
NOTE: Minimum requirements to listen to the broadcast are RealPlayer software
and at least a 14.4 Kbps connection to the Internet. RealPlayer software is a
free download from www.real.com/products/player/index.html.
This press release contains "forward-looking statements," including statements
about Lexicon's growth and future operating results, discovery and development
of products, strategic alliances, and intellectual property, as well as other
matters that are not historical facts or information. These forward-looking
statements are based on management's current assumptions and expectations and
involve risks, uncertainties and other important factors, specifically including
those relating to Lexicon's ability to realize anticipated benefits from
acquisitions, achieve its operational objectives, obtain patent protection for
its discoveries and establish strategic alliances, that may cause Lexicon's
actual results to be materially different from any future results expressed or
implied by such forward-looking statements. Information identifying such
important factors is contained under "Factors Affecting Forward-Looking
Statements" and "Business - Risk Factors" in Lexicon's annual report on Form
10-K for the year ended December 31, 2000, as filed with the Securities and
Exchange Commission. Lexicon undertakes no obligation to update or revise any
such forward-looking statements, whether as a result of new information, future
events or otherwise.
# # #
CONTACT: FOR LEXICON GENETICS:
Vice President, Corporate Communications
Lexicon Genetics Incorporated