MGI Pharma, Inc, an oncology-focused biopharmaceutical company, and Zycos Inc., a privately held company focused on the creation and development of oncology and antiviral products, have signed a definitive merger agreement under which MGI Pharma will acquire Zycos for $50 million in cash. This transaction, which has been approved by the boards of directors of both companies, is subject to approval by the stockholders of Zycos. MGI Pharma and Zycos expect the transaction to close in September 2004.

Zycos' iterative drug formulation process allows for the rapid development of immune response therapeutics and has generated two compounds that are currently in clinical development. The Company's most advanced clinical candidate is ZYC101a, a product candidate that has completed phase 2 studies in patients with cervical dysplasia, a potentially precancerous condition.

If ZYC101a is approved, it will be promoted to gynecologists, who are also anticipated to be a physician target audience for Aloxi injection for post operative nausea and vomiting (PONV). Additionally, the Zycos scientific team has significant expertise in immunology and the development of biologics, which will augment the oncology experience of the MGI Pharma development team. Mary Lynne Hedley, co-founder, president, and CEO of Zycos, will become senior vice president and general manager of MGI Pharma Biologics, located in Lexington, MA, according to a release.

"We believe that this strategic acquisition allows us to broaden our portfolio of clinical candidates and leverage our expertise in oncology product development and commercialization," said Lonnie Moulder, president and chief executive officer of MGI Pharma. "I am very pleased that Dr. Hedley is joining the MGI Pharma executive management team and we look forward to her contributions and those of the outstanding team in Lexington," added Lonnie.

"As part of MGI Pharma, we believe that we will have the financial, regulatory and commercial strength to accelerate our clinical programs," Mary Lynne Hedley, co-founder, president, and chief executive officer of Zycos Inc said adding, "Both companies have a shared commitment to delivering new oncology therapies to the market. We are very proud of our accomplishments to date and look forward to becoming a part of the MGI Pharma team."