WEST LAFAYETTE, IND.--JUNE 20, 2002--BIOANALYTICAL SYSTEMS, INC. (NASDAQ:BASI)
ANNOUNCED TODAY THAT IT HAS SIGNED A DEFINITIVE AGREEMENT TO ACQUIRE
PHARMAKINETICS LABORATORIES, INC. (OTCBB:PKLB) IN BALTIMORE, MARYLAND, AND IT
HAS REACHED AN AGREEMENT IN PRINCIPLE TO ACQUIRE LC RESOURCES, INC., A
PRIVATELY-HELD COMPANY BASED IN WALNUT CREEK, CALIFORNIA.
The acquisitions will enable the Company to broaden its contract research
services technology base and add new strategic locations that will place the
Company closer to leading pharmaceutical developers across the United States.
The PharmaKinetics agreement provides for a merger of PharmaKinetics
Laboratories, Inc. (PKLB) with a newly-formed subsidiary of Bioanalytical
Systems (BAS). Shares of PKLB common stock outstanding at the effective time of
the merger will be converted into shares of BAS common stock at a rate of one
BAS share for each 12 PKLB shares; shares of PKLB Series A convertible preferred
stock will be converted into 6% subordinated convertible promissory notes issued
by BAS in an aggregate principal amount of $5 million; and shares of PKLB Series
B convertible preferred stock will be converted into shares of BAS common stock
at the same ratio as shares of PKLB common stock. The promissory notes issued in
the merger mature on January 1, 2008, will not bear interest for the first year
following the effective time of the merger, and will be convertible at the
option of the holder into BAS common stock at a conversion price of $16 per
share. The transaction is subject to approval by the BAS board and customary
closing conditions, including registration of the BAS securities to be issued in
the merger and the approval of PKLB's shareholders. The merger is currently
expected to close prior to the end of BAS' current fiscal year. Holders of more
than 85% of the Class A Convertible Preferred Stock of PKLB have agreed to vote
those shares in favor of the merger.
LC Resources would be acquired through the purchase by BAS of all of the
outstanding shares of LC Resources, Inc. (LCR) for $2.5 million, subject to
adjustment for certain changes in net tangible assets of LCR prior to closing.
BAS would pay cash of $250,000 at closing, and the remainder of the purchase
price would be in the form of promissory notes maturing on October 1, 2007 and
bearing interest at a rate of 10% per annum. The holders of the notes will have
the option to require BAS to repay up to 20% of the outstanding principal
balance of the notes on each October 1 prior to maturity, commencing October 1,
2003. The agreement in principle also contemplates that certain assets
comprising separate lines of business of LCR will be sold to an unrelated third
party contemporaneously with the closing of the purchase by BAS, and the
proceeds of that sale would be distributed to the LCR shareholders. The LCR
transaction is subject to BAS ability to obtain financing for the transaction,
the subsequent operation of LCR's business on terms acceptable to it and the
receipt of certain required consents and approvals. The parties currently
anticipate that closing of the LCR transaction will occur prior to the end of
BAS' current fiscal year.
PharmaKinetics is an established provider of bioanalytical contract services,
Phase I/IIa clinical trials and later-stage clinical trials management. "The
integration of PharmaKinetics will bring to BAS a successful management team and
expanded bioanalytical and Phase I service capabilities, as well as a strong
customer and revenue base," said Peter T. Kissinger, BAS Chairman and CEO. "The
companies' businesses are highly complementary and support the BAS growth plan.
In addition, Baltimore is key to unparalleled access to the East Coast drug
development corridor and its outstanding biomedical community."
According to Dr. James Wilkinson, PharmaKinetics President and CEO, "There is
amazing potential for this marriage. Common cultures and commitment of both
firms to client satisfaction and regulatory excellence make this a very strong
union."
LC Resources has an expert team that maintains a high profile in bioanalysis,
assisting many large and small drug developers with both analytical contract
services and training. Their bioanalytical laboratory in McMinnville, Oregon
will enable BAS to expand its services and products presence on the West Coast.
Dr. Kissinger went on to say, "The BAS business model, and our passion, bridge
the space between late discovery (theory) and Phase II clinical trials
(reality), from mice to man. We have long focused our people, products and
laboratories on the space that integrates animal science and bioanalytical
science. These acquisitions bring us highly talented bioanalytical and clinical
research teams and establish BAS in early phase clinical research."
Kissinger concluded, "With the anticipated completion of both acquisitions by
the end of BAS' current fiscal year, we will gain an increased presence in key
geographic markets for the contract services industry throughout the United
States. The additional sites will complement our core sites in West Lafayette
and Warwickshire, UK, and support our commitment as a global bioanalytical
resource for drug developers. By placing us closer to leading pharmaceutical
companies and expanding our core competency in pre-clinical and early stage
clinical research, the acquisitions will enable more pronounced expansion into
large pharma, biotech and generic firms."
About PharmaKinetics Laboratories, Inc.
PharmaKinetics Laboratories, Inc. is a contract research organization providing
a range of clinical research and development services to the worldwide
pharmaceutical and biotechnology industries in the development of prescription
and non-prescription drug products.
About LC Resources, Inc.
LC Resources provides in-depth expertise to solve the most vexing chromatography
problems. Their products and services include training, lab services, and DryLab
software for liquid chromatography (LC) method development. LC Resources
Laboratory Services provides a diversity of services, including LC and LC/MS
method development, troubleshooting, and analytical services. The Company
specializes in solving difficult separation problems and developing rugged
methods that are easily transferred among laboratories and instruments. Sample
analysis services include LC/MS/MS as well as traditional LC methods for
bioanalytical samples.
About Bioanalytical Systems, Inc.
In business for 28 years, Bioanalytical Systems, Inc. is a pharmaceutical
development company providing contract research services and analytical systems
to the world's leading pharmaceutical, drug development and medical device
companies. The company focuses on developing innovative services and products
that increase efficiency and reduce costs associated with taking new drugs to
market. They have contributed to over $15 billion in annual sales of drugs for
treatment of central nervous system disorders such as Alzheimer's and
Parkinson's diseases, diabetes, osteoporosis, HIV and other diseases. Visit
www.bioanalytical.com and www.culex.net for more about BAS.
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