Tripos reawakens

Tripos acquires Pharsight for $57 million

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ST. LOUIS—Seeking to establish a footprint in translational research, drug discovery informatics and service provider Tripos LP last month entered into an agreement to acquire Pharsight Corp., a provider of clinical trial design, software and regulatory services, for approximately $57 million in cash.

Tripos CEO Jim Hopkins says combining forces with Pharsight will allow Tripos to bring greater value to its customers because the addition of Pharsight's software packages that provide the technical infrastructure for managing the pharmacokinetic and pharmacodynamic data generated during clinical trials and its regulatory reporting services will assist Pharsight's customers throughout the entire drug development process. Wholly owned by San Francisco-based private equity firm Vector Capital, Tripos is perhaps best known for its SYBYL molecular modeling package, which is used to generate and optimize lead candidates.

"We were considering a strategy to take our company into the direction of translational medicine, and we knew we'd need a great deal of expertise in clinical trials to be successful," Hopkins says. "Pharsight had everything we needed. No other company that does molecular modeling for drug discovery has any sort of footprint in the clinical trials space right now. The combination of our two companies makes us unique in that regard, and will allow us to have a broader reach into the marketplace."

Under the terms of the purchase agreement, stockholders of Mountain View, Calif.-based Pharsight will receive $5.50 in cash for each outstanding share of common stock, a premium of 29 percent over the average closing price of Pharsight's common stock over the 30-trading-day period ended Sept. 8, the last trading day before the deal was announced. The acquisition is expected to close in the fourth quarter.

Shawn O'Connor, chairman and CEO of Pharsight, says the company's board of directors evaluated strategic alternatives for the company and determined that the Tripos acquisition is "in the best interests of our stockholders, customers and employees."

"As a small, public company, we were actively searching for ways to grow our company, both organically and non-organically through mergers and acquisitions activity," O'Connor says. "We were also similarly looking at pursuing translational medicine to better assist our clients. Through that process, we met the Tripos team. Because we had the same mindset, it was a good match."

The two companies are mum on any future combined product rollouts, which Hopkins says will be defined by their customers.

"We see this as an opportunity to have both the software and technology that can be added to and built upon to give added utility to our clients," Hopkins says. "We see the promise for the creation of an end-to-end solution. It's not uncommon for companies to get a drug into clinical trials, only to have it fail for one reason or another. If we can capture information about that failure, assess why it happens and take it back to the scientists, we can keep them from putting a drug with similar properties through the process and have it fail in the same way. We can also help rescue drugs in danger of failing clinical trials by finding an alternative compound. All of this will help our clients who are involved in the drug discovery process become more proficient in knowing what to put into their pipelines." DDN

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