Praecis Jumps 150% on Glaxo Buyout Offer
by H.S. Ayoub
BioHealthInvestor.com
Shares of Praecis Pharmaceuticals (PRCS) jumped more than 140% in pre-market action on Thursday after GlaxoSmithKline (GSK) made an offer to buy the majority of outstanding common stock of the little biotech for $54.8 million, or $5 a share.
Praecis closed trading on Wednesday at $2 a share.
Key to the buyout is Praecis’s DirectSelect platform technology which allows for use of ultra-large libraries for the discovery of orally active compounds for drug development. The Molecular Discovery Research unit of GSK is very interested in this platform, as it could complement its own drug discovery research.
Praecis also has PPI-2458 in clinical development for cancer indications, including non-Hodgkin’s lymphoma and solid tumors.
Praecis lost over $61 million in fiscal 2005, and has a total worth of $20 million on the market.
And with only about $40 million in cash Praecis needed this deal much more than GSK.
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