Pharmos to acquire Vela Pharm for $30M

New Jersey, USA-based Pharmos Corp says that it has entered into a definitive agreement to acquire Vela Pharmaceuticals, a venture-capital backed, privately-owned company specializing in the development of medicines related to diseases of the nervous system including disorders of the "brain-gut axis."

The transaction includes an initial payment of $5.0 million in cash and the issuance of 11.5 million shares of Pharmos common stock for a combined value of about $29.7 million (based on Pharmos' recent $2.15 closing stock price). The transaction also includes the issue of up to 8.0 million additional Pharmos shares contingent on achieving specific clinical milestones.

Meantime, Pharmos has reported a fourth-quarter 2005 loss of $3.0 million, or $0.16 per share, compared with $4.8 million, or $0.25, in the like, 2004 period. For the full year, the loss was $2.9 million, or $0.15 a share, versus $22.0 million, or $1.22 in 2004.