Infinity Reverse Merges Into Discovery Partners

Through a reverse merger with Discovery Partners International Inc. , oncology discovery and development play Infinity Pharmaceuticals Inc. will access the public market and Discovery's roughly $70-75 million cash. [See Deal] That the deal won't secure Infinity the kind of market capitalization that the firm's top-notch pedigree and previous private valuations pointed toward merely reflects the market's healthy skepticism for early-stage assets. It also suggests that even for companies as promising as Infinity, reverse mergers are increasingly the smoothest—and in some cases the most lucrative—path to the Nasdaq.

Executives close to the deal note that Discovery approached Infinity about the merger as part of its ongoing review of operations, initiated last year when Pfizer Inc. declined to...