Eli Lilly Cuts $64 Million Deal To Acquire SGX Pharma

In a move to bolster its efforts in biotechnology drug discovery, pharmaceutical giant Eli Lilly and Co. will acquire SGX Pharmaceuticals Inc. in a cash transaction valued at $64 million.

Lilly will pay SGX $3 a share, more than double its closing price of $1.37 on July 8, the day the deal was

"It really is a good outcome for SGX," said Mike Grey, chief executive officer of SGX. "It's an attractive premium on our latest closing price, and, in a difficult financial environment, we believe that this is an attractive transaction for all those involved."

Grey said that it was premature to know whether employees in San Diego would become part of Lilly. SGX has 120 employees at its Sorrento Valley headquarters.

"We'll put a plan in place to define that over the next month or so," he said.

The deal is expected to close by the end of September.

SGX had a net loss of $16 million on revenues of $34.7 million in 2007 compared with a net loss of $28.1 million on revenues of $27.8 million in 2006. Its cash and cash equivalents totaled $39 million at Dec. 31, compared with $33.9 million on Dec. 31, 2006. SGX stock trades on Nasdaq under the symbol SGXP.