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Filed by Guilford Pharmaceuticals Inc.
pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
of the Securities Exchange Act of 1934
Commission File No. 0-20096
Subject Company: Gliatech Inc.
For information contact:
Stacey Jurchison
Guilford Pharmaceuticals
410-631-5022
Adam Gridley
Gliatech Inc.
216-831-3200
GUILFORD PHARMACEUTICALS ANNOUNCES DEFINITIVE
MERGER AGREEMENT WITH GLIATECH INC.
Merger Creates Specialty Pharmaceutical Company with
Comprehensive Biopolymer and Neurological Product Pipeline
BALTIMORE, MD AND CLEVELAND, OH -- May 30, 2000 -- Guilford Pharmaceuticals Inc.
(NASDAQ: GLFD) and Gliatech Inc. (NASDAQ: GLIA) today announced that they have
entered into a definitive merger agreement pursuant to which Guilford will
acquire all of the outstanding common stock of Gliatech. The transaction
combines the capabilities of both companies in biopolymer development and the
development of novel drugs for the treatment of central nervous system
disorders. The combined company will have three marketed products and nine
product candidates in clinical development.
"This is an exciting opportunity to combine our strengths and expertise and
create a stronger, product-focused organization with tremendous growth
potential," remarked Craig R. Smith, MD, President and Chief Executive Officer
of Guilford. "The strategic combination of our two companies will allow us to
realize greater competitive advantages, achieve operational synergies and
efficiencies, provide greater access to capital and create greater critical mass
with which to pursue our corporate objectives. Together, we have an excellent
commercial platform with three marketed biopolymer products for the surgical
marketplace and a broad and well-diversified pipeline of product candidates at
every stage of clinical development."
The combined company will consolidate its corporate and research operations in
Baltimore, while maintaining a manufacturing facility in Solon, Ohio. Dr. Smith
will retain his position as President and CEO and Thomas O. Oesterling, Ph.D.,
Chairman and CEO of Gliatech, will join the Board of Directors and the
management team and lead strategic planning activities for the Company.
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"Our combined portfolio, which includes drug candidates at every stage of
development, offers an exciting array of biopolymer-based products for surgeons
and new potential treatments for neurological diseases," said Dr. Smith.
"Gliatech's product pipeline significantly enhances our focus on biopolymers and
small molecule therapeutics. It also significantly expands our commercial
capacity and creates an important opportunity to increase top-line revenues from
product sales."
"We are delighted to join forces with Guilford in building a first-class
biopharmaceutical company," commented Dr. Oesterling. "It quickly became
apparent as we entered negotiations that the strategic fit was excellent -- both
in terms of corporate structure and technology platform. As a combined entity,
we are in a position to build a strong commercial enterprise with the ability to
increase product-related revenues and nurture a strong development pipeline."
Under the terms of the agreement, each shareholder of Gliatech will receive 1.38
shares of Guilford common stock for each share of Gliatech common stock. The
transaction, which is subject to shareholder and regulatory approval, is
expected to close in the third quarter of 2000. The merger is intended to
qualify as a tax-free reorganization and will be accounted for as pooling of
interests. The Boards of Directors of both companies have approved the merger.
BIOPOLYMER PLATFORM
The combined company's portfolio will include three marketed biopolymer products
and five biopolymer products in various stages of clinical development.
Commercial Platform:
(1) ADCON(R)-L Gel - a polymer gel approved for the inhibition of
post-surgical scarring and adhesions following lumbar spine surgery.
ADCON(R)-L is currently available in the U.S. and 28 international
markets and is the only product to receive FDA market clearance for
this use.
(2) GLIADEL(R) Wafer - a site-specific biopolymer-based chemotherapeutic
approved to treat recurrent glioblastoma multiforme - a common form
of malignant brain cancer. Since its approval by the FDA in 1996,
GLIADEL(R) Wafer has received marketing authorizations in 21
countries.
(3) ADCON(R)-T/N Gel - a polymer gel approved for the inhibition of
post-surgical scarring and adhesions following tendon and peripheral
nerve surgery. ADCON(R)-T/N Gel is currently available in 28
international markets, excluding the United States.
Development Platform:
(1) GLIADEL(R) Wafer - for first line therapy of glioblastoma
multiforme. A Phase III clinical trial will be completed this
summer.
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(2) ADCON(R)-P - a biopolymer liquid to inhibit post-surgical scarring
following pelvic and gynecological surgeries. ADCON(R)-P is
currently in pivotal trials.
(3) ADCON(R)-A - a biopolymer liquid to inhibit post-surgical scarring
following abdominal and colorectal surgeries. ADCON(R)-A has
completed patient enrollment in a pilot study and is expected to
enter pivotal trials this year.
(4) PACLIMER(TM) Microspheres - a proprietary, site-specific biopolymer
formulation of paclitaxel intended for the treatment of ovarian
cancer. PACLIMER(TM) Microspheres is currently in Phase I clinical
development.
(5) ADCON(R)-I (using ADCON(R)-L gel) - to inhibit adhesions following
breast augmentation and reconstructive surgery. ADCON(R)-I has
recently completed enrollment in a pilot clinical trial.
NEUROLOGICAL PLATFORM
In addition to its biopolymer platform, the combined company will have four
neurological products in various stages of clinical development. Products in the
company's neuroscience development pipeline will include:
(1) PERCEPTIN(TM) - a selective histamine H(3) receptor antagonist being
investigated as a novel treatment for attention deficit hyperactivity
disorder. Phase I studies have been completed and enrollment in a
Phase II trial has begun.
(2) Neuroimmunophilin ligands - novel small molecules that are being
investigated for the promotion of nerve growth and repair. Guilford's
development partner, Amgen, has recently completed Phase I studies
with "NIL-A," the lead compound, and Guilford anticipates that Phase
II development for Parkinson's disease will begin this year.
(3) GPI-15715 - a novel pro-drug of propofol, currently the world's best
selling general anesthetic. GPI-15715 is a water soluble pro-drug of
propofol that may avoid some of the side effects associated with
propofol. GPI-15715 is currently in late stage preclinical
development.
(4) GPI-5693 - a small molecule NAALADase inhibitor developed to treat
neuropathic pain associated with diabetic peripheral neuropathy.
Clinical development is scheduled to begin later this year.
The combined company also has several neurological programs in its research
pipeline. Its PARP and serine racemase programs aim to inhibit cell damage and
death in acute and chronic neurodegenerative disorders including stroke, spinal
cord trauma, Parkinson's disease and inflammation. The combined company is also
developing compounds based on the activity of inflammation-producing glial cells
to slow or inhibit the progression of Alzheimer's disease; H(3) agonists for the
treatment of anxiety and insomnia; inhibitors of glycine transporters for
potential
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treatment in schizophrenia, and a monoclonal antibody that may be useful in
inflammatory diseases.
Corporate partners include Amgen for development of neuroimmunophilin ligands
and Aventis S.A. which markets GLIADEL(R) Wafer.
Prudential Vector Healthcare Group, a unit of Prudential Securities ,
Incorporated acted as financial advisor to Guilford, and SG Cowen Securities
Corporation acted as financial advisor to Gliatech.
CONFERENCE CALL NOTICE:
Dr. Craig R. Smith, President and CEO of Guilford, and Dr. Thomas O.
Oesterling, Chairman and CEO of Gliatech, will host a conference call at 10:00
a.m. E.S.T. today to discuss the proposed business combination. The dial-in
number to participate is (212) 346-0231. For a playback, dial 1-800-633-8284,
reservation number 15359622.
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Internet addresses: www.guilfordpharm.com
www.gliatech.com
The companies desire to take advantage of the "safe harbor" provision of the
Private Securities Litigation Reform Act of 1995. This press release contains
forward-looking statements that involve risks and uncertainties. The companies
describe certain of these risks and uncertainties in their respective filings
with the Securities and Exchange Commission, including their respective Annual
Reports on Form 10-K (including the section entitled "Risk Factors" contained in
Guilford's Form 10-K), their most recent quarterly reports on Form 10-Q and
their Current Reports on Form 8-K. These risks and uncertainties could cause the
companies' actual results and experience to differ materially from anticipated
results and expectations expressed in these forward-looking statements. In
particular, there can be no assurance that all of the steps necessary to
consummate the merger (including regulatory and shareholder approvals) will
occur, that the contemplated advantages will be achieved upon any consummation
of the merger, or that all of the scientific, regulatory and chemistry,
manufacturing and controls steps necessary for compounds to progress from
preclinical to clinical development or from an earlier to a later stage of
clinical development will be successfully completed. The companies are under no
obligation to (and expressly disclaim any such obligation to) update or alter
their forward-looking statements whether as a result of new information, future
events or otherwise.
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MERGER AT A GLANCE
GUILFORD PHARMACEUTICALS (NASDAQ: GLFD) AND GLIATECH INC. (NASDAQ: GLIA)
The business combination between Guilford and Gliatech strategically integrates
the companies' biopolymer and neurological franchises to create a stronger
commercial organization with three marketed biosurgical products and a robust
development pipeline.
Company Name: Guilford Pharmaceuticals
Management: Chairman, President and CEO -- Craig R. Smith
Location: Corporate, R&D -- Baltimore, MD
Manufacturing -- Solon, OH & Baltimore, MD
Employees: ~ 300
Combined Market Cap: $518 Million (as of 5/26/00)
Shares Outstanding: ~ 36.5 million
Cash: ~ 154.3 million
Combined 1999 Revenues: $ 58.6 million (including interest income)
Products: Biopolymer-based products for the surgical marketplace
Novel drugs for neurological and psychiatric disorders
Biosurgical Products on the Market:
- ADCON(R)-L GEL, a biopolymer gel designed to inhibit post-surgical
scarring and adhesions following lumbar spine surgery. Available in 28
international markets, including the U.S., and the first FDA-approved
product for this indication. 1999 revenues to Gliatech of $26.1 million.
- GLIADEL(R) WAFER, the first site-specific biopolymer-based
chemotherapeutic to receive FDA marketing authorization. Approved in 22
countries, including the US, to treat recurrent glioblastoma multiforme, a
common form of malignant brain cancer. Marketed by Aventis S.A.
Manufacturing and royalty revenues to Guilford in 1999 - $6.8 million.
- ADCON(R)-T/N, a biopolymer gel designed to inhibit post-surgical scarring
and adhesions following tendon and peripheral nerve surgery. Available in
28 international markets, excluding the US. 1999 revenues to Gliatech of
$0.4 million.
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Biopolymer Products in Clinical Development:
- GLIADEL(R) WAFER, label expansion for first line therapy of glioblastoma
multiforme. PHASE III clinical trial to investigate the survival benefit
of GLIADEL(R) WAFER when used at the time of initial surgery to be
completed in June 2000.
- ADCON(R)-P, a biopolymer liquid in pivotal trials to inhibit
post-surgical scarring following pelvic and gynecological surgeries. 200
patient pivotal trial underway at more than 20 medical centers. Received
approval from the FDA for ADCON(R)-P to be reviewed under the FDA's
modular review program to initiate the Premarket Approval Application
(PMA).
- ADCON(R)-A, a biopolymer liquid to inhibit post-surgical scarring
following abdominal or colorectal surgery has completed patient enrollment
in a pilot study and is expected to enter pivotal trials later this year.
- ADCON(R)-I, (ADCON(R)-L GEL) designed to inhibit adhesions following
breast augmentation and reconstructive surgeries has completed patient
enrollment in a pilot clinical trial.
- PACLIMER(TM) MICROSPHERES, a proprietary site-specific biopolymer
formulation of paclitaxel intended for the treatment of ovarian cancer.
Currently in Phase I development. Exploring additional indications for
targeted treatment of other cancers.
Neurological Products in Clinical Development:
- NEUROIMMUNOPHILIN LIGANDS, novel small molecules drugs to promote nerve
growth and repair. Worldwide development and commercialization rights
licensed to Amgen in 1997. Potential applications in Parkinson's disease,
Alzheimer's disease, spinal cord trauma, multiple sclerosis, ALS. Initial
Phase I testing completed. PHASE II development for Parkinson's disease
expected to commence this year.
- PERCEPTIN(TM), a selective H3 histamine receptor antagonist being
investigated as a treatment for attention deficit hyperactivity disorder
(ADHD), various sleep disorders and cognition deficit in Alzheimer's
disease. PHASE II trials ongoing in attention deficit hyperactivity
disorder.
- NAALADASE INHIBITORS, drugs designed to prevent nerve degeneration.
Potential uses for multiple chronic and acute neurodegenerative diseases.
Lead compound, GPI-5693, selected for clinical testing. First clinical
target is neuropathic pain associated with diabetic peripheral neuropathy.
Regulatory filing to permit clinical testing planned for Q4 2000.
- GPI-15715, a novel pro-drug of propofol, currently the world's best
selling general anesthetic (1999 sales ~ $750 million). Unlike propofol,
which is formulated in an oil (lipid) emulsion, GPI-15715 is water soluble
and converted in the body into propofol after intravenous administration.
The Company believes that the water-soluble formulation of GPI-15715 may
avoid some of the side effects of propofol, including: elevated blood
lipid levels and pain on injection. Phase I anticipated to begin by
year-end.
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Research Pipeline:
- PARP INHIBITORS, small molecules designed to inhibit PARP - an enzyme
that depletes a cell's energy reserves and causes cell death in multiple
chronic and acute neurological conditions. Lead optimization underway.
- SERINE RACEMASE INHIBITORS, neuroprotectants designed to inhibit
presynaptic glutamate release and reduce cell damage and cell death in
the brain and spinal cord.
- GT-4086, a proprietary monoclonal antibody that blocks the activation of
the complement pathway. May be useful in a variety of indications where
activation of the complement pathway can cause inflammation such as heart
attack and stroke.
- LIDOMER(TM) MICROSPHERES, a site-specific biopolymer formulation of
lidocaine for controlled release lidocaine, a commonly used local
anesthetic.
Strategic Partnerships: Aventis S.A. - GLIADEL(R) Wafer
Amgen - FKBP-neuroimmunophilins
Orion-Farmos - GLIADEL(R) Wafer (Scandinavia only)
Chugai Pharmaceuticals - ADCON-L & T/N (Japan)
Daichi Radioisotope Laboratories- DOPASCAN(TM) Injection
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These communications include certain "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. These
statements are based on management's current expectations and are naturally
subject to uncertainty and changes in circumstances. Actual results may vary
materially from the expectations contained herein. The forward-looking
statements in this document include statements about future financial and
operating results and the proposed Guilford/Gliatech transaction. The following
factors, among others, could cause actual results to differ materially from
those described herein: inability to obtain, or meet conditions imposed for,
governmental approvals for the merger between Guilford and Gliatech, failure of
the Guilford or Gliatech stockholders to approve the merger; the risk that the
Guilford and Gliatech business will not be integrated successfully; there can be
no assurance that the contemplated advantages will be achieved upon any
consummation of the merger, the costs related to the merger; and other economic,
business, competitive and/or regulatory factors affecting Guilford's and
Gliatech's business generally. More detailed information about those factors is
set forth in Guilford's and Gliatech's filings with the Securities and Exchange
Commission, including their Annual Reports filed on Form 10-K for the fiscal
year ended 1999, especially in the Management's Discussion and Analysis section,
their most recent quarterly reports on Form 10-Q, and their Current Reports on
Form 8-K. Guilford and Gliatech are under no obligation to (and expressly
disclaim any such obligation to) update or alter their forward-looking
statements whether as a result of new information, future events or otherwise.
Guilford, its directors, executive officers and certain other members of
management and employees may be soliciting proxies from Guilford stockholders.
Gliatech, its directors, executive officers and certain other members of
management and employees may be soliciting proxies from Gliatech stockholders.
INVESTORS ARE URGED TO READ THE JOINT PROXY STATEMENT - PROSPECTUS
RELATING TO THE FOREGOING TRANSACTION TO BE FILED WITH THE SEC BECAUSE IT WILL
CONTAIN IMPORTANT INFORMATION. THE JOINT PROXY STATEMENT - PROSPECTUS AND OTHER
DOCUMENTS FILED BY GUILFORD AND GLIATECH WITH THE SEC MAY BE OBTAINED WHEN THEY
BECOME AVAILABLE FOR FREE AT THE SEC'S WEB SITE, WWW.SEC.GOV. THE JOINT PROXY
STATEMENT-PROSPECTUS AND THESE OTHER DOCUMENTS MAY ALSO BE OBTAINED FOR FREE
FROM GUILFORD OR GLIATECH, AS THE CASE MAY BE. REQUESTS TO GUILFORD MAY BE
DIRECTED TO 6611 TRIBUTARY STREET, BALTIMORE, MD. 21224, ATTENTION: INVESTOR
RELATIONS. REQUESTS TO GLIATECH MAY BE DIRECTED TO 23420 COMMERCE PARK ROAD,
CLEVELAND, OH. 44122, ATTENTION: INVESTOR RELATIONS.
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