ArQule merging with Camitro in $95M deal

Massachusetts, USA-based firm ArQule has entered into a merger agreementwith Camitro Corp of California, which the former says is part of its strategy "to become the leading chemistry-based pharmaceutical discovery company." ArQule notes that it will improve the efficiency of its drug discovery programs by integrating Camitro's in silico predictive modeling for ADMET (Absorption, Distribution, Metabolism, Elimination, Toxicity) with its own "demonstrated capabilities in small-molecule design and its expertise in high-throughput, automated chemistry."

The transaction is valued at approximately $95 million and ArQule is issuing approximately 3.4 million shares in exchange for all of Camitro's outstanding stock. ArQule may also pay cash, capped at $10 million, to the latter's stockholders at closing, depending on the final valuation. David Hastings, ArQule's chief financial officer, said that that "2001 will be a year of investment in Camitro's technology" and, after that,the latter firm should contribute positively to cash flow.

Mr Hastings added that ArQule expects to increase spending on R&D by $10 million and on marketing and general administration by $5 million during 2001, which he claimed should "ensure the maximum future potential for Camitro's technology."