GSK TO ACQUIRE U.S. DRUG-DISCOVERY COMPANY FOR $54.8 MILLION

GlaxoSmithKline (GSK) has announced it will acquire U.S. biopharmaceutical firm Praecis Pharmaceuticals in a definitive agreement under which GSK will acquire all outstanding shares of Praecis' common stock for a cash purchase price of $5.00 per share, for a total of approximately $54.8 million.

"Praecis has created novel therapeutic programs and innovative chemical-synthesis and screening technology that will complement our own discovery capabilities," Allen Oliff, senior vice president of molecular discovery research for GSK, said.

The acquisition will be effected by means of a cash tender offer by a wholly owned subsidiary of GSK for all of the outstanding shares of Praecis, followed by a second-step merger in which any untendered Praecis shares would be acquired. The acquisition is subject to certain conditions, including the tender of a majority of the shares of Praecis' common stock and other customary conditions. The transaction is expected to begin in January and close in the first quarter of 2007.

Praecis is focused on using its proprietary technologies for the discovery and development of novel compounds that have the potential to address unmet medical needs or improve existing therapies. The company has a novel MetAP-2 inhibitor, PPI-2458, in clinical development for cancer indications, including non-Hodgkin's lymphoma and solid tumors, an innovative drug discovery technology, DirectSelect, which enables the generation and practical use of ultra-large libraries for the discovery of orally active compounds for drug development, and a R&D program aimed at identifying one or more selective S1P-1 agonist compounds to advance into clinical testing.