Calif. firm buys Quakertown contraceptive developer

Cellegy Pharmaceuticals Inc. said it has agreed to be acquired by Adamis Pharmaceuticals Corp. of San Diego.

Cellegy, of Quakertown, has sought a merger since selling most of its assets in 2006 for $9 million to ProStrakan Group P.L.C. of Scotland. Cellegy has one potential product, a microbicide gel, Savvy, that is in Phase 3 clinical studies in the U.S. as a contraceptive. Earlier Savvy studies for preventing HIV infection were stopped because of lack of evidence that the gel worked.

Detailed financial terms of the merger, which was announced late yesterday and which allows privately-held Adamis to become a publicly-traded company, were not disclosed.

Adamis chief executive officer Dennis Carlo will head the combined company, which will focus on developing products for viral infections, including influenza.

Under the deal, Cellegy will implement a reverse stock split, before the closing, estimated to be between 8.5 to 1 and 9.9 to 1. After the closing, each outstanding share of Adamis common stock will be converted into the right to receive one post-reverse stock split share of Cellegy common stock. Cellegy has about 29.8 million outstanding shares; Adamis has about 50 million oustanding shares.

In 2004, Cellegy bought Biosyn Inc. of Huntingdon Valley and in 2005 moved its corporate headquarters to Pennsylvania from Brisbane, Calif.

Cellegy shares were up 1 cent, or 12.5 percent, to 9 cents in over-the-counter trading.