PharmAthene pulls out of merger deal with Theraclone

USA-based biodefense company PharmAthene (NYSE MKT: PIP) has decided to terminate its previously-announced all stock merger with privately held monoclonal antibody specialist Theraclone Sciences (The Pharma Letter August 2), to which the latter has consented.

The agreement provided for the merger of a wholly-owned subsidiary of PharmAthene into Theraclone in an all-stock, merger-of-equals transaction. Neither companies provided an explanation for the decision, but PharmAthene will pay Theraclone a $1 million termination fee.

It is known, however, that Prescott Group Capital Management, which holds in excess of PharmAthene’s equity, advised investors to vote against the merger last week.