Quick, call the caterer. The
-Eos wedding has been canceled.
Late Thursday night -- 9 p.m. EST actually -- the biotech firms issued a short statement: Their planned merger was off, terminated by mutual agreement.
The news comes just 12 hours before Pharmacopeia shareholders were scheduled to vote on the $160 million deal, which was announced last August.
No reason was given for the deal's failure, but surely the vociferous
objections of Pharmacopeia's largest shareholder had something to do with it. Orbimed Advisors, a $4 billion asset management firm that owns 10% of Pharmacopeia, strongly opposed the deal on the grounds that it was too expensive and didn't make strategic sense.
In recent weeks, Orbimed took its case to other Pharmacopeia shareholders through an outside proxy solicitation firm. Until Thursday night's announcement, Pharmacopeia management had argued that the merger was in the best interests of the company, which is trying to transform itself from a service-oriented biotech firm into one that develops its own drugs.
"We remain optimistic about the future prospects of the science, technology and people at Pharmacopeia," said Joseph Mollica, Pharmacopeia's chairman and CEO, in a statement. "We believe there are many ways in which we can prosper by adding to and leveraging our existing biology and chemistry capabilities. We will continue to pursue the many alternatives available to us."
Shares of Pharmacopeia closed Thursday up 26 cents to $13.70 per share. Investor reaction Friday morning should prove interesting. Some Wall Street analysts joined Orbimed in knocking the planning merger, and SG Cowen's Bill Tanner, in an earlier interview, said he thought Pharmacopeia's slumping stock price might benefit if the merger was cancelled. Tanner rates Pharmacopeia a buy, and his firm doesn't have a banking relationship with the company.