Biotech Values

[DewDiligence]

Roche Acquires MEMY for 319% Premium

[The whopping market premium in this deal is second only to the 465% premium GSK paid to acquire GNLB one month ago (#msg-33209281). The two deals are similar in size ($50M and $57M) and also in the sense that both suitors had a prior relationship with the acquired company.]

http://biz.yahoo.com/prnews/081125/ny48487.html

›Tuesday November 25, 2:45 am ET

NUTLEY, N.J. and MONTVALE, N.J., Nov. 25 /PRNewswire-FirstCall/ -- Roche and Memory Pharmaceuticals (Nasdaq: MEMY ) today announced that the two companies have signed a definitive merger agreement for Roche to acquire all the outstanding shares of Memory Pharmaceuticals in an all-cash transaction for an aggregate price of approximately USD 50 million.

Memory Pharmaceuticals develops innovative drug candidates for the treatment of debilitating central nervous system (CNS) disorders such as Alzheimer's disease and schizophrenia. Memory Pharmaceuticals' nicotinic alpha-7 agonist drug candidates in these disease areas are already in partnered programmes with Roche: R3487/MEM 3454 is in phase II clinical trials for Alzheimer's disease and schizophrenia; R4996/MEM 63908 is in phase I for Alzheimer's disease.

"Acquiring Memory Pharmaceuticals will enable Roche to secure the future development of its promising nicotinic alpha-7 agonists," said William Burns, CEO Division Roche Pharmaceuticals. "The innovative work carried out by the scientists at Memory Pharmaceuticals will be fully integrated into Roche's R&D portfolio with the aim of providing new hope for patients and caregivers affected by devastating diseases such as Alzheimer's."

Jonathan Fleming, Chairman of the Board of Directors of Memory Pharmaceuticals said: "Since founding Memory Pharmaceuticals in 1998, we have focused on developing medicines that could make a real difference to the lives of CNS patients. I am proud of the progress our dedicated team has made and I am confident that Roche's capabilities and experience in the CNS field will enable our research to realise its full potential."

Terms of the agreement

Under the terms of the merger agreement, Roche will commence a tender offer to acquire all of the outstanding shares of Memory common stock at a price of $0.61 per share in cash. This price represents a 319% premium to the closing price on 24 November 2008. The closing of the tender offer will be subject to the tender of a number of shares that, together with the shares owned by Roche, represent a majority of the total number of outstanding shares (assuming the exercise of all exercisable options and warrants having an exercise price per share less than or equal to the tender offer price) and other customary conditions. Following completion of the tender offer, Roche will acquire all remaining shares through a second step merger. Directors, officers and stockholders holding approximately 29.5% of the outstanding shares have agreed to tender their shares and otherwise support the transaction. Additional information regarding the transaction will be set out in the offer to purchase and other disclosure documents to be provided to stockholders in connection with the transaction.

About Memory Pharmaceuticals

Memory Pharmaceuticals Corp., a biopharmaceutical company, is focused on developing innovative drugs for the treatment of debilitating CNS disorders, many of which exhibit significant impairment of memory and other cognitive functions, including Alzheimer's disease and schizophrenia. For additional information, please visit www.memorypharma.com.‹