Nanogen Inc, a developer of advanced in vitro diagnostic products, and Epoch Biosciences Inc, a provider of proprietary products that accelerate genomic analysis, announced the signing of a definitive agreement to merge Epoch into Nanogen in an all-stock transaction. Epoch has a variety of products that are complementary to Nanogen's, and the merger will expand Nanogen's reach in the rapidly growing clinical lab and research markets, an official release from Epoch said.
Epoch said that the companies serve many of the same customers and both market in vitro diagnostic products that provide physicians information to predict, diagnose and treat disease. Epoch has developed advanced technologies that it incorporates in its MGB Eclipse Probe System, which consists of reagents and software for improving all types of molecular analyses, including gene expression, SNP (single nucleotide polymorphism) and mutation detection, and identification of infectious organisms.
Nanogen has begun incorporating Epoch's technology into its own assays. Epoch has several product offerings for molecular research and diagnostic applications, including research reagents and services for real-time PCR (polymerase chain reaction) that offer a high degree of accuracy and ease of use.
In July, Epoch launched 21 MGB Eclipse Detection Reagents, real-time Analyte Specific Reagents (ASRs) for the molecular diagnosis of infectious and genetic diseases and cancer. The real-time ASRs are complementary to the NanoChip Molecular Biology Workstation, which accomplishes more complex analysis of multiple markers.
"The merger with Epoch will broaden Nanogen's product offerings to research institutions and clinical reference labs and allow us to further leverage our existing sales and marketing infrastructure. By adding Epoch's high-quality products, we expect to increase our productivity, expand our customer reach and significantly grow revenue," said Howard Birndorf, Nanogen chairman and chief executive officer. "Operating synergies between the two companies are clear and we expect that Epoch will generate a positive cash flow contribution to our business," he added.
Under terms of the merger, Nanogen has agreed to an offer price of $2.00 per Epoch share, representing a 30 per cent premium over the average closing price of Epoch's shares for the 20 trading days ending on September 1, 2004. Epoch shareholders will receive a number of Nanogen shares based on an exchange ratio determined by dividing the offer price of $2.00 per share by Nanogen's issue price as calculated at closing.
"Merging Epoch into Nanogen creates a diversified line of research and diagnostic products that should see faster adoption given Nanogen's established infrastructure and capital resources," William G Gerber, Epoch Biosciences chief executive officer said adding, "As part of its evolution to a product company, Epoch has been more aggressively pursuing a direct sales strategy in research and, more recently, diagnostics. The merger is a decisive way to accelerate this objective, giving us immediate access to a knowledgeable and well-integrated marketing and sales organization with an established customer base."
Upon closing the transaction, Nanogen intends to retain Epoch's research and development capabilities and reagent manufacturing operations in Bothell, Washington. Administration, marketing and sales will be merged into Nanogen's existing operations in San Diego, California, the release said.