Applied Bioscience International Inc., the East Millstone, N.J., company that was seeking to acquire a major portion of PharmaKinetics Laboratories Inc., announced yesterday that it has suspended negotiations with the Baltimore-based company.
Later yesterday, PharmaKinetics said it had received notice that it isin default on a $2.5 million note owed to Maryland National pTC Bank and on its financing agreement and revolving credit note at the bank.
Pharmakinetics and the bank are in discussions regarding the default, the company said.
PharmaKinetics has faced a serious cash crunch since the termination of a contract earlier this year with Bolar Pharmaceutical Inc. of Copiaque, N.Y., for the testing of pharmaceutical production. Termination of the contract cost PharmaKinetics about 35 percent of its fiscal 1989 sales.
A recent research report by Ferris, Baker Watts Inc. concluded that PharmaKinetics faced such a severe cash crunch that if something was not done soon, it "may be forced into Chapter 11," a reorganization under federal bankruptcy laws.
Four weeks ago, Applied Bioscience reached a preliminary agreement to acquire PharmaKinetics' North American operations, the bulk of which are in Baltimore, for $6.8 million in cash and some debt.
Dr. Kenneth H. Harper, president and chief executive officer of Applied Bioscience, said yesterday that any further negotiations would have to involve substantially different terms from those contemplated in the previously announced letter of intent between the two companies.
He added that it was unclear at the present time whether there would be further negotiations.
If the sale was completed,PharmaKinetics would be left with its German subsidiary, International Bio Research, and potential income from licensing fees on products awaiting approval by the Food and Drug Administration.
V. Brewster Jones, the new president of PharmaKinetics, could not be reached for comment yesterday.