The Wall Street Journal-20080123-Roche to Acquire Ventana for --36-3-4 Billion
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Roche to Acquire Ventana for $3.4 Billion
After trying for seven months to win over Ventana Medical Systems Inc., Swiss drug giant Roche Holding AG said it reached an agreement to acquire the U.S. diagnostics company for $3.4 billion.
The deal advances Roche's aim of diversifying more into machines and other tools that help diagnose and monitor disease. Ventana's board approved the deal after Roche raised its offer by 19%. Ventana makes instruments that analyze human tissue and cells for signs of cancer and infectious disease. Roche believes such tools will make up a greater share of health-care spending in the future.
Roche has moved aggressively to build its diagnostics business in the past year as signs of trouble in the pharmaceutical industry have mounted. Sales of prescription drugs are growing at their slowest pace in years, and many drug companies are having trouble discovering new medicines.
Roche's prescription-drug sales have fared better than those of many rivals, but the company is still hedging its bets by expanding more into diagnostics. In addition to Ventana, Roche in the past year has said it would acquire two other diagnostics companies: closely held NimbleGen Systems Inc., of Madison, Wis., for $272.5 million, and Bioveris Corp., of Gaithersburg, Md., for $600 million.
Prescription drugs still make up about 80% of Roche's sales, with diagnostics accounting for the rest. One of Ventana's biggest-selling products helps diagnose women with a genetically determined form of breast cancer. Roche sells a drug, Herceptin, that treats this form of cancer and sees some marketing advantages in being able to offer the diagnostic tool as well.
Roche's offer of $89.50 a share represents a 72% premium to Ventana's closing price June 22, the day before Roche made its initial offer.
Roche also believes Ventana's technology can help it develop drugs that target the underlying cause of a disease more accurately, Roche Chief Executive Franz Humer said. The companies said Christopher Gleeson, Ventana's CEO, will remain in that post after the acquisition and that Ventana will continue to be based in Tucson, Ariz.
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Anita Greil contributed to this article.
