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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.
MEMORANDUM
May 30, 2000
To: Gliatech Employees
We are very excited about the announcement that Gliatech has signed a definitive
agreement to merge with Guilford Pharmaceuticals Inc., a Baltimore-based
company.
We know you'll have many questions about the proposed new company in the days
and weeks ahead. We'll make every effort, on a timely basis, to keep you updated
as best as we can. SEC regulations limit what we can say about the proposed deal
until certain legal steps are finalized. We are making every effort to close the
merger with shareholder approval by late July 2000.
We can tell you that Guilford Pharmaceuticals is a strong, well-respected member
of the pharmaceutical industry. Guilford was founded in July, 1993. The
company's stock is traded on the NASDAQ symbol GLFD. Approximately 235 employees
currently work for Guilford in Baltimore. Like Gliatech, Guilford's research and
development focus is on biopolymer surgical and low molecular weight
pharmaceutical products treating diseases of the central nervous system. We are
providing a copy of Guilford's 1999 Annual Report that contains information on
the various research and development programs at Guilford.
Here at Gliatech, we are proud of the work we have done in the areas of
biopolymer surgical products and neuroscience development. We share a passion
and dedication for our work with the employees of Guilford. We believe the
proposed combination of our two companies presents an exciting opportunity to
maximize our strengths in building a most productive research and development
enterprise with a commercial operating business.
WHAT THE PROPOSED MERGER MEANS TO YOU
If/when the proposed combination is approved, several things would likely occur:
- Many of you will be invited to move to Baltimore to work at Guilford's
facilities
- We expect to maintain the Manufacturing and Quality operations
at the Solon facility.
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- It is our hope to complete the integration of the two companies by
year-end 2000 with the closure of the Beachwood facility.
We are sensitive to the personal uncertainty that can arise with such an
announcement. We are committed to providing you with frequent updates of our
progress and to address your employment questions as quickly and clearly as
legally possible.
Within the next few days you will be receiving another letter from the
Integration Team, led by Jack Brennan, Senior Vice President at Guilford,
outlining the integration employment program and benefits.
Thank you in advance for your support, and, of course, your hard work and
dedication. We are very excited at the prospect of the proposed new company, and
hope you share our enthusiasm.
Sincerely,
Thomas O. Oesterling, Ph.D. Craig R. Smith, M.D.
Chairman and Chief Executive Officer Chairman
Gliatech Inc. President and CEO
Guilford Pharmaceuticals Inc.
[The following is the text of slides being presented in a meeting with Gliatech
employees]
SLIDE:
Gliatech
Employee Presentation
SLIDE:
What is being proposed?
- Guilford Pharmaceuticals Inc., a
Baltimore-based biopharmaceutical company has
proposed to merge with Gliatech Inc.
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SLIDE:
Why this merger?
- To create a competitive advantage
- through technology
- Increase "critical mass" - people,
products, pipeline
- through business strategy
- through operational excellence
- Leverage respective manufacturing and
sales capabilities; effect operational
synergies
- through reduced cost of capital
SLIDE:
Why this combination makes good sense
- Establishes leadership position in two key
areas
- Biopolymers for surgeons
- Strong CNS pipeline
- Creates product-focused organization with
tremendous growth potential
- Increases top-line revenues from product
sales
SLIDE:
Why this combination makes good sense
- Builds stronger commercial organization and
creates a robust research and development
pipeline
- 3 marketed products
- Adcon-L, Adcon, T/N, Gliadel
- 9 products in clinical development
- 5 biopolymer products
- 4 neurological products
SLIDE:
Why this combination makes good sense
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- New Directions
- Expand marketing and sales efforts
- Expand US manufacturing capacity
- Expand process chemistry, small scale
pharmaceutical production
- Expand clinical development capacity
- In-license other surgical products
SLIDE:
Who is Guilford?
- Founded in 1993 to discover, develop and
commercialize novel drugs for the diagnosis
and treatment of neurological diseases and
conditions including brain cancer,
Parkinson's disease, Alzheimer's disease,
stroke, severe head and spinal cord injuries,
multiple sclerosis and cocaine addiction.
SLIDE:
Who is Guilford?
- Specializes in biopolymer development &
manufacturing and novel products for CNS
disorders
- 1 marketed product - Gliadel(R) Wafer
- 4 products in clinical development
- Partnerships with Aventis & Amgen
- 235 employees
- 156,000 sq. ft. state-of-the-art facilities
for R&D, manufacturing and administration
SLIDE:
The Combined Companies
- Name: Guilford Pharmaceuticals Inc.
- Headquarters: Baltimore, Maryland
- With manufacturing operations in Solon,
Ohio
- Management:
- Craig R. Smith, M.D. - President and CEO
- Employees: approximately 300
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- Cash: approximately $154 million
SLIDE:
What Has Happened To Date
- Management discussions
- Due Diligence between the parties
- Merger Agreement negotiations
- Both Boards have approved
- Public Announcement
SLIDE:
Next Steps
- Announcement of Integration Team Members
- Legal and regulatory filings
- Approval by shareholders of both companies -
3Q 2000
- Target completion of integration - 4Q 2000
SLIDE:
Integration Team - Core Members
<TABLE>
<CAPTION>
Guilford Gliatech
<S> <C>
- Jack Brennan - Sr. VP,
Technical Operations - Rod Dausch - EVP, Finance
- Team Leader - Michael Zupon - EVP, Research & Development
- Andy Jordan - Sr. VP, Finance & Administration - Monica Thayer - Director, HR
- Peter Sudzak - Sr. VP, Research & Development
- Lorraine Faris - HR Director
</TABLE>
SLIDE:
Integration team
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- Functional Integration teams
- Organized by corresponding functional head from each company
SLIDE:
Integration Timeline
- Announcement of Merger
- May 30
- Personal Employment Program Letter
- June 2 - 5
- Complete Employment Program Discussions
- July 25
- Shareholders of both companies vote
- July 31
- Final Personal Employment Program Letter
- August 3 - 4
This schedule is subject to change. Any change will
be communicated to you
SLIDE:
Q&A
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
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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.
