Sequenom to Acquire Gemini for $228 Million
San Diego-based Sequenom Inc. said Tuesday it will buy Britain’s Gemini Genomics for $228 million in stock, part of a wave of consolidation in the emerging genomics industry.
Sequenom said the tie-up would combine its genotyping technology platform with Gemini’s expertise in population genetics, expanding their potential for disease-gene discovery.
Paul Kelly, president and chief executive of Gemini, said increased scientific and commercial reach made sense for both firms as rivals race to exploit the potential of the human genome, which was sequenced last year.
“There is a critical moment in genomics right now: We’ve got the human genome sequence but the real issue is how you convert it into drug and diagnostic targets,” Kelly said.
“There’s only two or three years left to do it, and after that it will be too late. . . . I think we are seeing the start of a wave of consolidation.”
This month, drug giant Merck & Co. agreed to buy Rosetta Inpharmatics Inc. for $620 million. In April, Vertex Pharmaceuticals Inc. said it would acquire Aurora Biosciences Corp. for $592 million.
Under the agreement, which follows a previous alliance between the two firms, Sequenom plans to issue 12.9 million new shares of its common stock. Based on Sequenom’s Friday closing price of $17.68 on the Nasdaq, those shares would be worth $228.1 million.
In Nasdaq trading Tuesday, Sequenom’s shares fell $1.93 to close at $15.75, while Gemini’s American depositary receipts rose 45 cents to close at $6.05.
Holders of Gemini ordinary shares would receive 0.2 of a newly issued Sequenom common stock in exchange for each ordinary Gemini share they own, or 0.4 for each Gemini ADR. That ratio represents a 26% premium to Gemini’s ADR closing price Friday of $5.60 on Nasdaq.
Sequenom expects to assume outstanding options and warrants.
Sequenom Chief Executive Toni Schuh said the potential of the tie-up was demonstrated by the two companies’ product collaboration, which identified two novel cardiovascular disease genes in less than six months.
“It is clear that the combined technological capabilities, clinical data and scientific expertise will give the company the ability to offer an enhanced suite of products and resources,” Schuh said.
The combined company will hold a disease-gene patent portfolio of 11 issued patents, with 89 pending and a technology patent portfolio of 59 issued or allowed patents, with 96 pending.
Gemini, based in Cambridge, England, came to market last July, raising around $97 million through an initial public offering at $14 per share.
It specializes in finding the genetic causes of diseases.
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Gene Jitters
Sequenom’s bid to acquire Gemini Genomics follows an alliance between the genetics researchers that identified two novel cardiovascular disease genes. But Sequenom’s stock has fallen about 27% in the last year.
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Sequenom shares, monthly closes and latest on Nasdaq
Tuesday: $15.75, down $1.93
Source: Bloomberg News
