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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.
[The following is the text of "Questions and Answers" to be posted on the
Guilford Pharmaceuticals web page]
GUILFORD PHARMACEUTICALS/ GLIATECH ACQUISITION
Q & A
TRANSACTION SPECIFIC
Q1 WHAT SPECIFICALLY ARE THE BENEFITS OF A BUSINESS COMBINATION?
A1 A business combination between Guilford and Gliatech capitalizes on a
strategic fit that builds a stronger commercial organization with three
marketed products, increasing top-line revenues from product sales, and a
robust development pipeline of nine additional product candidates. The
agreement extends the company's biopolymer franchise for the surgical
marketplace, while enhancing its development efforts in small molecule
therapeutics for neurological and central nervous system disorders.
Q2 WHAT ARE THE GENERAL TERMS OF THE ACQUISITION?
A2 Under terms of the deal, Guilford will acquire all outstanding 9.5
million shares of Gliatech for approximately 13.1 million shares of its
common stock.
Q3 WHEN DO YOU EXPECT THE DEAL TO CLOSE?
A3 Third Quarter of 2000. Each Company's shareholders must vote on the deal.
Q4 WHERE WILL THE NEW COMPANY BE LOCATED?
A4 The company will consolidate is corporate headquarters in Baltimore,
while maintaining a manufacturing facility at Gliatech's current
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headquarters in Solon, Ohio for the production of the Adcon family of
products.
Q5 WHAT WILL THE NEW ENTITY BE CALLED?
A5 The company will be called Guilford Pharmaceuticals Inc. Gliatech will be
a wholly-owned subsidiary of Guilford.
OPERATIONS SPECIFIC
Q6 WHO WILL BE THE MANAGERS OF THE NEW COMPANY?
A6 Guilford CEO Craig R. Smith will be the President and CEO of the combined
company. Thomas Oesterling, Chairman and CEO of Gliatech will join
Guilford's board and management team and lead strategic planning for the
Company.
Q7 WHAT IS THE EXPECTED CASH RESERVE OF THE NEW ENTITY?
A7 As of March 31, 2000, the companies had total cash and investments in
excess of $154 million.
Q8 WILL THIS AFFECT GUILFORD'S PARTNERSHIP AGREEMENT WITH AMGEN OR
AVENTIS?
A8 No.
Q9 WILL THIS AGREEMENT AFFECT OTHER RESEARCH PROGRAMS AT GUILFORD, SUCH
AS PARP AND NAALADase?
A9 The transaction will enhance Guilford's neuroscience programs by
increasing critical mass and knowledge and adding complementary product
candidates to the pipeline.
WALL STREET SPECIFIC
Q10 WHO WERE THE BANKERS INVOLVED IN THE TRANSACTION?
A10 Prudential Vector Healthcare Group has represented Guilford while S.G.
Cowen represented Gliatech.
Q11 WHAT IS THE VALUE OF THE PROPOSED COMBINATION BASED ON FRIDAY'S
(MAY 26, 2000) CLOSING PRICE OF $15 1/2?
A11 The value of the merger is approximately $219 million.
Q12 WHAT IS THE MARKET CAPITALIZATION OF THE NEW ENTITY?
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A12 As of last Friday's close (May 26, 2000), the combined market
capitalization of the two companies was $518.8 million
Q13 WHO COVERS GUILFORD?
A13 Prudential Vector; CIBC Opco; DB Alex Brown; SunTrust Equitable; Legg
Mason; Oscar Gruss
Q14 WHO COVERS GLIATECH?
A14 Prudential Vector and SG Cowen
Q15 WHAT IS THE CURRENT VALUATION OF EACH COMPANY?
A15 As of last Friday's close (May 26, 2000), Guilford's marketcap was
approximately $363.1 million and Gliatech's marketcap was approximately
$155.7 million.
Q16 WHEN DID EACH COMPANY GO PUBLIC?
A16 Guilford Pharmaceuticals had its initial public offering in 1994, and
Gliatech went public in 1995.
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
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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.
