Exhibit 99.2
CONTACTS:
Nicole Estrin
Hyseq Pharmaceuticals, Inc./VARIAGENICS, Inc.
Manager of Corporate Communications & IR
408-746-4572
nestrin@hyseq.com
Lilian Stern
Investor Relations
212-362-1200
lilian@sternir.com
Paul Laland
Media Relations
415-356-1080
lalandp@Fleishman.com
HYSEQ AND VARIAGENICS ANNOUNCE MERGER
--Building for the Future: New company will maximize strong cash position and
experienced management team to support development of novel products --
SUNNYVALE, CA and CAMBRIDGE, MA, November 11, 2002 /PRNewswire/ -- Hyseq
Pharmaceuticals, Inc. (Nasdaq: HYSQ) and VARIAGENICS, Inc. (Nasdaq: VGNX) today
announced that they have entered into a definitive merger agreement.
The new company will leverage its substantial resources and its proven
management team to develop biotherapeutic and molecular diagnostic products.
"The merger represents a value-creating opportunity to integrate the two
companies' significant assets into a product-focused organization. Our
integration team will immediately review the combined assets and establish new
milestones that we will manage the new company toward," commented Dr. Ted W.
Love, president and chief executive officer of Hyseq. "The new organization will
leverage its substantial cash position to support the development of Hyseq's
novel thrombolytic, alfimeprase, VARIAGENICS' cancer diagnostics program and
other near-term revenue generating opportunities."
Dr. George Rathmann, current chairman of Hyseq's board of directors, will assume
the chairmanship of the new company's board of directors. The new board will
include an additional six members, three each from the existing boards of Hyseq
and VARIAGENICS. Dr. Ted W. Love will serve as the president, CEO and board
member of the combined entity.
The new company will be headquartered in Sunnyvale, California. Clinical
operations and biotherapeutic research and discovery will reside in Sunnyvale,
with molecular diagnostics development residing in Cambridge, Massachusetts.
The combined entity will take steps to help ensure that cash resulting from the
merger will fund its operations through approximately December 2004. As a result
the new company will have approximately 110-120 employees following the close of
the transaction.
"We entered into this transaction in order to accelerate the development of the
most promising products of both companies," commented Dr. George Rathmann,
chairman of the board of Hyseq. "We believe that the new company will be in a
position to advance a strong development program, establish premiere
partnerships and accelerate a significant pipeline."
The new company will leverage the following assets aimed at product development
and accelerating revenue generation:
- Alfimeprase, a novel acting thrombolytic currently in phase I
clinical trials
- Robust biotherapeutic drug development pipeline based on proprietary
human gene sequences and associated intellectual property
- Cancer diagnostics program
- Proprietary SNP database to support molecular diagnostics
development
- Strong cash position expected to fund operations for at least two
years
- Strong partnerships with major pharmaceutical companies including
Amgen, Novartis, Kirin and Deltagen
"The integration of VARIAGENICS' molecular diagnostics program and
pharmacogenomics expertise with Hyseq's clinical and drug development
capabilities represent a natural next step in VARIAGENICS' development as a
company," said Joseph (Jay) S. Mohr, president and chief business officer of
VARIAGENICS. "We look forward to working with the Hyseq team and its highly
regarded board of directors."
Under the terms of the agreement, each outstanding share of VARIAGENICS common
stock will be exchanged for Hyseq common stock at an exchange ratio of 1:1.6451.
This exchange ratio implies a purchase price for VARIAGENICS' shareholders of
$2.22 per common share of VARIAGENICS, or approximately $55.9 million (including
in the money options and warrants), based on the closing price of Hyseq shares
on November 8, 2002.
The merger will be completed through a reverse triangular, stock-for-stock
merger in which Hyseq will form a new wholly-owned subsidiary that will merge
into VARIAGENICS. The surviving entity will then be merged upstream into Hyseq.
Subsequently, Hyseq will change its legal name to a yet-to-be determined name.
Hyseq's existing subsidiary, Callida Genomics, will remain a privately held,
separately funded, majority owned subsidiary of the new company.
The board of directors of both Hyseq and VARIAGENICS approved the definitive
merger agreement. The transaction, which is structured as a "tax-free"
reorganization for federal income tax purposes, is subject to the approval of
the shareholders of both Hyseq and VARIAGENICS, as well as other closing
conditions. Selected stockholders of Hyseq and VARIAGENICS have agreed to vote
in favor of the merger. Both parties will strive to complete the merger by the
end of February 2003, at which time shares of the new company will trade on
Nasdaq under a new stock symbol and yet-to-be determined company name.
Conference Call Information
Hyseq and VARIAGENICS will hold a conference call today at 8:30 a.m. Eastern
Time (5:30 a.m. Pacific Time) to discuss this announcement. To participate in
the conference call, please dial 800/915-4836. A telephone replay of the
conference call will be available through Monday, November 25, 2002. To access
the replay, please dial 800/428-6051 for domestic callers, 973/709-2089 for
international callers, and reference pass code 267576.
This call is also being webcast by CCBN and can be accessed at Hyseq's Web site
at www.hyseq.com, CCBN's individual investor center at www.companyboardroom.com
or by visiting any of the investor sites in CCBN's Individual Investor Network.
Institutional investors can access the call via CCBN's password-protected event
management site, StreetEvents (www.streetevents.com).
Additional Information
In connection with the proposed merger, Hyseq and VARIAGENICS will file a joint
proxy statement/prospectus with the Securities and Exchange Commission (SEC).
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE JOINT PROXY STATEMENT/
PROSPECTUS WHEN IT BECOMES AVAILABLE AS IT WILL CONTAIN IMPORTANT INFORMATION
ABOUT HYSEQ, VARIAGENICS, THE MERGER AND RELATED MATTERS. INVESTORS AND SECURITY
HOLDERS WILL HAVE ACCESS TO FREE COPIES OF THE JOINT PROXY STATEMENT/PROSPECTUS
(WHEN AVAILABLE) AND OTHER DOCUMENTS FILED WITH THE SEC BY HYSEQ AND VARIAGENICS
THROUGH THE SEC WEB SITE AT WWW.SEC.GOV. THE JOINT PROXY STATEMENT/PROSPECTUS
AND RELATED MATERIALS MAY ALSO BE OBTAINED FOR FREE (WHEN AVAILABLE) FROM HYSEQ
AND VARIAGENICS BY CALLING THE CONTACTS LISTED AT THE BEGINNING OF THIS RELEASE.
Hyseq, VARIAGENICS and their respective directors, executive officers, certain
members of management and employees, may be deemed to be participants in the
solicitation of proxies in connection with the proposed merger. Information
regarding the persons who may, under the rules of the SEC, be considered to be
participants in the solicitation of Hyseq's stockholders in connection with the
proposed merger is set forth in Hyseq's proxy statement for its 2002 annual
meeting of stockholders, dated June 28, 2002 and filed with the SEC on June 13,
2002. Information regarding the persons who may, under the rules of the SEC, be
considered to be participants in the solicitation of VARIAGENICS' stockholders
in connection with the proposed merger is set forth in VARIAGENICS' proxy
statement for its 2002 annual meeting, dated April 30, 2002 and filed with the
SEC on April 29, 2002. Additional information will be set forth in the joint
proxy statement/prospectus when it is filed with the SEC.
About Hyseq
Hyseq Pharmaceuticals, Inc. is engaged in research and development of novel
biopharmaceutical products from its collection of proprietary genes discovered
using its high-throughput screening-by-hybridization platform. This platform
provided a significant advantage in discovering novel, rarely-expressed genes,
and assembly of one of the most important proprietary databases of full-length
human gene sequences. Hyseq intends to further elucidate the physiological roles
of its
proprietary novel genes. Hyseq's database includes genes which encode a
number of therapeutically important classes of molecules including chemokines,
growth factors, stem cell factors, interferons, integrins, proteases, hormones,
receptors, and other potential protein therapeutics or drug targets.
Information about Hyseq is available at www.hyseq.com or by phoning
408-524-8100.
About VARIAGENICS
VARIAGENICS, INC. develops molecular diagnostic tests by identifying genetic
markers associated with response to cancer therapies, with the goal of
optimizing patient care. The Company analyzes genetic variation, including
single nucleotide polymorphisms (SNPs), haplotypes, loss of heterozygosity, and
expression levels in normal and tumor cells. VARIAGENICS is developing molecular
diagnostic tests through both biopharmaceutical collaborations and its own
internal research programs.
For more information, please visit the Company's Web site at
www.VARIAGENICS.com.
This press release contains forward-looking statements within the meaning of the
"safe harbor" provisions of the Private Securities Litigation Reform Act of
1995. Forward-looking statements may be identified by words such as "believe,"
"expect," "anticipate," "should," "may," "estimate," "goals," and "potential,"
among others. These statements, including statements about the proposed merger,
the reasons for timing of and benefits of the proposed merger, and future
financial and operating goals and results, are based on management's current
expectations and beliefs and are subject to a number of risks, uncertainties,
assumptions and other factors that could cause actual results to differ
materially from those in the forward-looking statements. Such factors include
risk that the proposed merger may not be approved by stockholders, Hyseq's or
VARIAGENICS' inability to satisfy the closing conditions of the merger, risk
that the two companies' businesses will not be integrated successfully, costs
related to the proposed merger, the termination of existing pharmaceutical and
biotechnology collaborations, the combined company's inability to further
identify, develop and achieve commercial success for new products and
technologies, the risk that the combined company may be unable to successfully
finance and secure regulatory approval of and market its drug candidates, risks
associated with VARIAGENICS' technology, the combined company's ability to
protect its proprietary technologies, risk of new, changing and competitive
technologies, and regulations in the U.S. and internationally, and other factors
(such as economic, business, competitive and/or regulatory factors) affecting
each company's businesses generally as set forth in HYSEQ's and VARIAGENICS'
filings with the SEC, including their Annual Reports on Form 10-K for the fiscal
years ended 2001, their most recent Quarterly Reports on Form 10-Q and their
Current Reports on Form 8-K. HYSEQ and VARIAGENICS each expressly disclaim any
duty to update information contained herein.
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