CHUGAI EXPANDING U.S. BIOTECH PRESENCE VIA $ 100 MIL. GEN-PROBE BID, announced Oct. 31. A leader in the development of diagnostic products incorporating ribosomal RNA targeting technology, San Diego-based Gen-Probe currently markets diagnostics for chlamydia and gonorrhea, Legionnaire's disease and microplasma pneumonia, as well as culture confirmation tests. Chugai planned to commence a tender offer of $ 6.25 cash for each share of Gen-Probe stock on Nov. 6. Financial advisors to the acquisition include the Sumitomo Bank, which is providing the financing, and Merrill Lynch. The agreement has already been approved by the boards of both companies. Following the acquisition, Gen-Probe will remain an independent, wholly-owned subsidiary under present management, the company said. Chugai's purchase of Gen-Probe will expand an existing R&D relationship between the two companies. In April 1988, the companies signed a five-year agreement under which Chugai was providing Gen-Probe with $ 15.5 mil. for the development of viral and cancer diagnostics, including a test for the AIDS virus. "Our previous partnerships have shown us that our two companies have much to share with each other," Chugai Deputy President Osau Nagayama remarked. "We plan to invest heavily in R&D and other activities to expand Gen-Probe's proprietary work in diagnostic technologies." Nagayama said the companies "will also plan innovative strategies to combine our work in the therapeutic applications of genetic probes, an area where Chugai is particularly strong." Chugai's offer represents a premium of more than 90% over Gen-Probe's market value as of Oct. 30, when the stock closed at 3-1/4. Gen-Probe has been unprofitable since its founding in 1983: the firm lost $ 9.5 mil. on revenues of $ 5.8 mil. in 1988. For the first nine months of 1989, the company reported a loss of $ 4.2 mil. on revenues of $ 7.2 mil. Chugai's 1988 sales were $ 991 mil.; net income was $ 60 mil. Although Chugai will not be acquiring a profitable concern, Gen-Probe's diagnostics R&D capabilities will complement Chugai's existing U.S. biotech presence, which includes an equity position in Genetics Institute, along with a marketing arm, its joint venture with Upjohn. Chugai/Upjohn is currently awaiting FDA approval for Marogen, a recombinant erythropoitin produced licensed from Genetics Institute and produced by Chugai in Japan ("The Pink Sheet" Oct. 30, p. 5). Chugai's latest move indicates a more aggressive push by Japanese firms for a greater presence in the U.S. health care market. While Japanese companies like Otsuka and Eisai have established biotechnology R&D facilities in the U.S., Chugai's acquisition of Gen-Probe, if completed, would be the first outright acquisition of an American biotechnology firm by a Japanese company. Recently, the Japanese pharmaceutical firm Fujisawa completed the purchase of the remaining 70% interest in injectable generic drug manufacturer Lyphomed that it did not already own. Another diagnostics firm, Gene-Trak announced Nov. 2 that it has signed a six-year marketing and R&D agreement with Nissui Pharmaceuticals of Japan. Nissui will provide Gene-Trak with "a continuation of sales and marketing fees and provide research and development funding" and receive exclusive rights to Gene-Trak's nucleic acid probe-based diagnostic products for the Japanese market. Gene-Trak said it expects the deal to generate "several million dollars" in revenues for each year the agreement is in effect. With Nissui's help, Gene-Trak plans to spend $ 10 mil. per year in R&D over the next six years.
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Advanz Pharma would have had to show that the European Commission’s decision to revoke Ocaliva’s conditional marketing approval risked causing serious and irreparable harm, according to lawyers from Van Bael & Bellis.
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