Lilly has signed a definitive merger agreement to acquire SGX Pharmaceuticals, Inc. for approximately $64 million in cash. SGX, based in San Diego, CA, is a biotechnology company focused on oncology drug discovery and development.
   
The acquisition gives Lilly access to FAST, SGX’s fragment-based, protein structure guided drug discovery technology, and to its portfolio of preclinical oncology compounds focused on a number of high-value kinase targets.
   
The two companies began collaborating in 2003 to determine 3-D structures of key Lilly drug targets using SGX’s x-ray crystallography technology. The ongoing collaboration also provides Lilly with access to SGX’s state-of-the-art synchrotron beamline facility at the Advanced Photon Source (APS) located at the Department of Energy’s Argonne National Lab in Chicago, IL.
   
“After a successful collaboration over the past several years, we are excited to bring the scientific and technological expertise of SGX into Lilly’s research organization, while at the same time expanding our presence in the San Diego area,” commented Steven M. Paul, M.D., executive vice president, science and technology for Lilly. “We will leverage the combined resources of both companies to strengthen our structural biology capabilities and seek out innovative therapies for patients.”
   
“We believe that this merger provides an excellent opportunity for the potential of SGX’s platform and pipeline to be realized, while simultaneously providing our shareholders with attractive financial terms,” said Mike Grey, chief executive officer of SGX Pharmaceuticals. “As we have evolved from a platform technology organization to a drug discovery company, we believe that this transaction represents a timely opportunity to place our programs and technology assets in the hands of a world-class company with the experience and resources to advance innovative treatments for patients.”
   
The transaction, subject to certain closing conditions, is expected to close in the second half of 2008.