Genentech, Inc. has announced plans to acquire Tanox, a biotechnology company specializing in the discovery and development of biotherapeutics based on monoclonal antibody technology, for $20 per share for a total cash value of approximately $919 million.
Genentech and Tanox have been working together in collaboration with Novartis since 1996 to develop and commercialize Xolair, an anti-IgE monoclonal antibody approved by the FDA in 2003 as a treatment for patients with moderate-to-severe allergic asthma. Upon the closing of the acquisition, Genentech will improve its financial results for Xolair by eliminating the royalty it currently pays to Tanox and by obtaining Novartis' profit share and royalty payments to Tanox. Genentech will also acquire Tanox's product pipeline.
"IgE inhibition is an important way to treat patients with moderate-to-severe asthma and we look forward to growing our asthma business by increasing the number of patients treated and by introducing new indications, formulations, and next generation products. This acquisition will help us improve our profitability from Xolair," said Arthur Levinson, Ph.D., chief executive officer of Genentech. "We are also excited by molecules in the Tanox pipeline being developed to potentially treat diseases including asthma, HIV, and age-related macular degeneration," Levinson added.
"Joining with one of the world's leading biotech companies allows us to fully realize the potential of our drug development programs and the strong scientific platform developed by our researchers," said Tanox co-founder and chairman Nancy Chang, Ph.D. "We believe Genentech's offer reflects the value we have created and achieves a significant return for our shareholders." Genentech and Tanox will be reviewing current operations and possible opportunities at Genentech for Tanox's employees in the coming months.
The terms of the agreement have been unanimously approved by the boards of directors of both companies. The acquisition is subject to approval of Tanox's shareholders and customary closing conditions, including clearance under the Hart-Scott-Rodino Act. The transaction is expected to be completed by the end of the first quarter of 2007. Funds will be provided from Genentech's cash on hand at the time of closing.