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Tripos looks to the future with Pharsight acquisition

By Dr Matt Wilkinson , 11-Sep-2008

 

Drug discovery informatics and services provider, Tripos International, has agreed to buy Pharsight Corporation, a provider of software and strategic services for clinical drug development.

 

The acquisition of Pharsight will expand Tripos’ informatics and service offering from the early drug discovery phase into the clinical testing, approval and post marketing arenas.

Tripos International is perhaps best known for its SYBYL molecular modelling package used to generate and optimise lead candidates before researchers even step into the laboratory.

With the addition of Pharsight’s software packages that provides the technical infrastructure for managing the pharmacokinetic and pharmacodynamic data generated during clinical trials the combined company will be able to assist pharmaceutical firms throughout the entire drug development process.

Jim Hopkins, CEO of Tripos, said: “The fusion of the design and analysis tools from Tripos and Pharsight will allow us to bring greater value to our customers engaged in the pharmaceutical research and development process. By acquiring Pharsight, we will be able to provide our customers with important new products, key enabling technologies and scientific expertise.”

The deal values Pharsight at approximately $57m (€40m), with Pharsight shareholders in line to receive $5.50 per share, a premium of 29 per cent over the average closing price of Pharsight’s common stock over the thirty trading day period ending on September 8, 2008.

Pharsight recorded an operating loss of $0.6m from revenues of $6.6m in the three months ending June 30, 2008 and Tripos’ owners, Vector Capital, will no doubt be hoping that it can quickly make the company profitable again.

“Our board of directors has evaluated strategic alternatives for Pharsight and has determined that this outcome is in the best interests of our stockholders, customers and employees,” said Shawn O’Connor, CEO of Pharsight.

“We believe this merger provides an exciting opportunity to expand our existing offerings and market reach. The combined companies will provide software products and scientific services over an expanded market, from discovery to phase III, approval, and post marketing.”

Both companies have suffered in the past from relying too heavily on too small a customer base, a problem that eventually led to the liquidation of Tripos’ former owners, Tripos Inc.

Tripos Inc. struggled to cope with the loss of a $90m deal from Pfizer and while it had managed to grow its non-Pfizer based income three-fold it could not maintain the company at the size it had grown to in order to deliver on the Pfizer deal.

After a series of streamlining measures that saw the number of staff at its UK-based discovery research facility fall from 165 to 40, the company was left with no other option than to go into liquidation.

Vector Capital bought the discovery informatics business from Tripos Inc., in November 2006 and renamed the division Tripos International.

Tripos Inc.’s dissolution and liquidation plans were then finalised when its discovery research division was bought by Commonwealth Biotechnologies Inc. (CBI) in June 2007 in a deal worth over $2m.

The Tripos Discovery Research business has since been renamed Exelgen and signed up a number of customers including Elan Pharmaceuticals, CombinatoRx, and Schering-Plough.

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