Pharmacopeia, Inc. announced that its Board of Directors has approved a plan to separate its drug discovery and software businesses into two independent, publicly traded companies through the spin-off to its stockholders of the drug discovery unit. The transaction is intended to be tax-free to Pharmacopeia and its stockholders, and is expected to occur by the end of first quarter of 2004.
Pharmacopeia intends to effect the spin-off through a pro rata distribution of 100 per cent of the common stock of Pharmacopeia Drug Discovery, Inc. (PDD), the wholly owned subsidiary through which Pharmacopeia conducts its drug discovery business. PDD intends to apply for listing on The Nasdaq National Market. After the spin-off, Pharmacopeia will continue to operate its Accelrys scientific software business, and intends to change its name after completion of the proposed spin-off to "Accelrys, Inc." to reflect this singular focus. The transaction is subject to the receipt of any required regulatory approvals, receipt of a favorable tax opinion, market conditions and final approval by the Pharmacopeia Board of Directors.
"We believe that the proposed spin-off will create an exciting opportunity for PDD as an independent drug discovery company, and will enable each of Accelrys and PDD to pursue its own focused strategy more effectively while addressing difficulties they have encountered under the current corporate structure," said Joseph A Mollica, PhD, Pharmacopeia's chairman, CEO and president. "The respective management teams at both Accelrys and PDD strongly believe that the two companies, as leaders in scientific software and collaborative drug discovery, are extremely well-positioned to stimulate innovation and growth in their own industries, and that separation of the two businesses will best facilitate their pursuit of those goals."
Following the spin-off, Accelrys will continue to design, develop, market and support software and provide related services that facilitate the discovery and development of new products and processes in the pharmaceutical, biotechnology, chemical, petrochemical and materials industries. Accelrys' current Centers of Excellence in San Diego, California, Cambridge, United Kingdom, and Bangalore, India will be unaffected by the transaction. Pharmacopeia's Accelrys unit generated revenue of approximately $54.0 million for the first nine months of 2003 and $95.1 million for the full year 2002. It is expected that, immediately after completion of the spin-off, Accelrys will have between $90 million and $100 million in cash, with no debt. Accelrys headquarters will be located in San Diego, California after the spin-off.
Pharmacopeia is a leader in enabling science and technology that accelerates and improves the drug discovery and chemical development processes through its drug discovery and software subsidiaries. Pharmacopeia's software subsidiary, Accelrys, develops and commercializes molecular modeling and simulation software for the life sciences and materials research markets, cheminformatics and decision support systems, and bioinformatics tools including gene sequence analysis.
PDD is a chemistry-based collaborative drug discovery company, focused on the creation of new small molecule therapeutics. Using proprietary technologies and processes, PDD's experienced scientists identify and optimize novel drug candidates through research collaborations with major pharmaceutical and biological companies and through its own internally-funded drug discovery programs. PDD is a wholly owned subsidiary of Pharmacopeia.