DARA BioSciences, a drug development firm, is acquiring a financially troubled Massachusetts company as part of a plan to go public.

Financial terms were not disclosed, but DARA, which is privately held, will end up with more than 96 percent of Point’s stock. The company has a market value of about $2 million based on its stock price of 5 cents. Its stock trades on the Nasdaq under the symbol POTP.

The name of the merged company will be DARA, and it will be based in Raleigh. DARA plans to become a public company and trade on under a different symbol.

The deal is expected to close in the first quarter of 2008.

DARA recently signed an agreement with Bayer Pharmaceuticals to license patents and compounds from Bayer that could lead to treatments for Type 2 diabetes and a blood disorder known as dyslipidemia. DARA also is exploring treatments for chronic neuropathic pain and has a product in Phase II clinical trial.

“All parties involved believe this to be a logical and productive course of action given the potential synergies of combining Point and DARA,” said Richard Franco, chief executive officer at DARA.

Point’s stock price collapsed recently after the company terminated Phase III clinical trials involving a treatment for lung cancer. The company stopped other funding and research due to cash limitations.