Sonus downscales stock plan

BOTHELL – Sonus Pharmaceuticals Inc. will issue fewer shares than previously announced if its acquisition of a French biotechnology company is approved early in 2005.

The two firms announced the revised terms of the proposed transaction on Tuesday. Under its agreement with Synt:em, Sonus now will issue no more than 5.4 million shares, compared with nearly 9 million shares under the previous agreement.

But the approximate value of the shares issued upfront has risen to $12 million, compared with $10 million as first announced.

“The strategic rationale for combining Sonus and Synt:em remains compelling. Michael Martino, Sonus president and chief executive officer, said in a statement. He added that buying Synt:em is an “outstanding opportunity to expand Sonus’ potential product portfolio and technology capabilities.”

Martino said the acquisition terms needed updating after the U.S. Food and Drug Administration told Sonus it could pursue late-stage clinical testing and a new drug application for Tocosol paclitaxel, the company’s lead chemotherapy drug.

That spurred changes in the agreement to reflect the increased value of potential milestone payments related to Tocosol paclitaxel.

Ultimately, assuming certain drug development goals are met, Synt:em shareholders could own 20 percent of the combined company. That compares with the 26 percent to 29 percent stake previously agreed to by the two firms

Sonus said directors of both companies have approved the revised acquisition terms. The deal is expected to be completed by March, assuming shareholders approve the changes.

Based in Nimes, France, privately held Synt:em has worked with peptides, special proteins that can improve the way a drug targets the organ it is meant to treat. The company, which employs about 40 people, has early-stage drug candidates that could help treat cancers and control pain.

Sonus, founded in 1991, has more than four dozen employees.

Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com.