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ViroLogic and ACLARA Bio sign merger agreement

South San FranciscoThursday, June 3, 2004, 08:00 Hrs  [IST]

ViroLogic, Inc. and ACLARA BioSciences, Inc. announced that they have entered into a definitive merger agreement to create an industry-leading company to develop and commercialize advanced molecular diagnostics for personalized medicine focused on oncology and infectious diseases. The combined company will leverage ViroLogic's commercial laboratory, patient testing and pharmaceutical drug development business, and innovative technology with ACLARA's proprietary molecular assay platform known as the eTag System. With the benefit of technological and operational synergies and substantial financial resources, the combined company will seek to rapidly exploit the large emerging market opportunity for molecular testing for cancer and other serious diseases. Under the terms of the agreement, each outstanding share of ACLARA common stock will be exchanged for 1.7 shares of ViroLogic common stock and 1.7 contingent value rights (CVR). In addition to receiving shares of ViroLogic, the CVR provides for a potential cash payment of up to $0.50 per CVR (equivalent to $0.85 per ACLARA share) depending on the ViroLogic stock price twelve months following completion of the merger. After the closing of the merger, ViroLogic expects to have approximately $75 million in cash, cash equivalents and marketable securities net of estimated transaction and integration costs prior to the effect of any payment that may be made under the CVRs. Building on its pioneering and leading position in the HIV field, ViroLogic is merging with ACLARA in order to deliver technology and services for pharmaceutical companies developing cancer therapeutics along with delivering patient testing products and services to aid doctors in the treatment of cancer patients. "This merger provides what we believe is the most powerful new technology platform to address the exploding field of targeted therapeutics and molecular diagnostics for cancer," said William D. Young, CEO and chairman of ViroLogic. "This strong combination of capabilities and substantial financial resources will enable us to leverage our experience and infrastructure to bring the benefits of personalized medicine to the acute need in oncology," he added. "Joining forces with ViroLogic, the industry innovator and leader that helped make personalized medicine a reality in HIV for patients, healthcare providers and pharmaceutical companies will accelerate our ability to do the same thing for cancer," said Thomas Klopack, ACLARA's CEO. ViroLogic has built a highly sophisticated and efficient commercial infrastructure to support the industry's most comprehensive line of drug resistance tests, including PhenoSense HIV, GeneSeq and its novel combination assay, PhenoSenseGT. These tests are used in the management of individuals with HIV and the development of new antiviral drugs for HIV and hepatitis. Since it launched PhenoSense HIV four years ago, the company has steadily increased revenues year over year while optimizing operations. ACLARA has developed the proprietary eTag System, a protein-based technology that can be easily formatted to test biopsy-sized samples of patient tumors. Importantly, this includes formalin-fixed paraffin-embedded tissue, the industry standard for storing patient samples. The eTag System is particularly well suited for targeting the new molecular-based drugs being introduced for cancer. This will allow drug companies and doctors to assess a patient's likelihood of responding to a given therapy thereby facilitating more precise and effective utilization of available therapeutic options.

 
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