A Diagnostics & Imaging Week

Roche (Basel, Switzerland) has signed a merger agreement to acquire 454 Life Sciences (Branford, Connecticut), a subsidiary of CuraGen (New Haven, Connecticut), for up to $154.9 million in cash.

Of this amount, Roche will pay $140 million in cash, and up to about $14.9 million will be received from the exercise of stock options issued and outstanding prior to the acquisition.

Of the $140 million from Roche, $25 million will be placed in escrow for a period of 15 months. On a fully diluted basis, presuming exercise of all outstanding stock options, CuraGen expects to receive about $85 million before fees and expenses, of which about $14 million will be held in escrow.

“We are pleased to announce the successful implementation of this strategic initiative regarding 454 Life Sciences, which allows us to gain liquidity on our investment and to extend our runway to bring our oncology products to market,” said Frank Armstrong, MD, president/CEO of CuraGen during a conference call on the deal.

“Already in 2007 we have strengthened our balance sheet by paying off our outstanding 2007 convertible debt of $66.2 million and we are now monetizing our investment in 454 Life Sciences. During the remainder of 2007, Armstrong said CuraGen will continue to generate important clinical trial results on velafermin, belinostat, and CR011-vcMMAE, that he said he believes “will enable us to advance one or more of these products into Phase III development by 2008.”

Armstrong said that this infusion of capital would give the company a runway “of more than two-year’s cash for developing our late-stage products.”

CuraGen established 454 Life Sciences as a majority owned subsidiary in 2000 with the mission of developing next-generation sequencing technology. 454 Life Sciences and Roche signed a research and marketing collaboration in May 2005 that extends until Sept. 30, 2010, under which Roche Diagnostics has been acting as the exclusive worldwide distributor of the Genome Sequencer systems and associated reagents to all markets with the exception of regulated diagnostics.

454 was established for a total of about $36 million, and Armstrong said that with this transaction, “454 has delivered a considerable return to CuraGen. We are very pleased with this transaction and the approximately $85 million return on the $36 million investment we originally made in 454.”

Through this acquisition, Roche Diagnostics (Mannheim, Germany), a Roche subsidiary, will now obtain access to 454 Life Sciences’ future generations of sequencing products and the use of 454 Sequencing in regulated diagnostic applications.

Roche said it plans to maintain the 454 Life Sciences facility in Branford, Connecticut with its 167 employees as a fully integrated part of the Roche Diagnostics organization.

This transaction is expected to close in the 2Q07; approval by CuraGen or Roche shareholders is not required.

“Now, as part of Roche Diagnostics, 454 will be able to further develop their product offerings,” Armstrong concluded. “We remain excited about the future prospects of 454 technology, but realize that the sequencing space is competitive and requires R&D investment to be successful and build a business. We believe that Roche is the right company to foster 454’s goals.”

Cytyc (Marlborough, Massachusetts) reported that its Augusta Medical subsidiary has completed its $52 million merger with Adeza Biomedical (Sunnyvale, California), with Adeza becoming a wholly owned subsidiary of Cytyc.

The initial offering period for the $452 million deal was first disclosed last month. The merger was consummated effective without a meeting of the stockholders of Adeza in accordance with Delaware law.

Adeza’s name has been changed to Cytyc Prenatal Products. All remaining outstanding shares of Adeza common stock were converted into the right to receive $24 a share in cash, other than shares held by Cytyc or any of its subsidiaries or shares held by Adeza stockholders who perfect their rights to appraisal in accordance with Delaware law.

“This acquisition represents another significant milestone for Cytyc as we expand our leadership in women’s health to include maternal-fetal care,” said Patrick Sullivan, Cytyc’s president/CEO and chairman. “The FullTerm fetal fibronectin test offers clear clinical and cost benefits for the assessment of preterm birth and provides another excellent. We welcome Adeza’s employees to the Cytyc family and look forward to working with our new colleagues to continue to deliver best in class products and service to Adeza’s and Cytyc’s customers.”

Earlier, Cytyc reported completing the tender offer by its direct wholly owned subsidiary, Augusta Medical, for all outstanding shares of Adeza Biomedical (Sunnyvale, California) for $24 a share in cash, about $452 million.

The depositary for the offer advised Cytyc that, as of the expiration of the subsequent offering period, 16,816,572 shares were tendered and not withdrawn, representing about 96% of Adeza’s issued and outstanding shares. All validly tendered shares have been accepted for payment.

Cytyc develops diagnostic and surgical products covering a range of cancer and women’s health applications.

In other dealmaking:

Beckman Coulter (Fullerton, California) reported that its subsidiary, Louisiana Acquisition Sub, has begun a tender offer for all outstanding shares of Biosite (San Diego), a biomedical company developing proteomics discoveries, of $85 a share in cash. The $1.55 billion acquisition was first disclosed last month.

The offer price represents about a 53.5% premium over Biosite’s closing stock price of $55.38 on March 23 (the last trading day before the announcement of the merger agreement).

Biosite’s board determined that the offer, the merger and the other transactions contemplated by the agreement are in the best interests of Biosite’s stockholders, and it recommended stockholder adoption of the merger agreement, if adoption by Biosite stockholders is required.

Unless the tender offer is extended, the tender offer and any withdrawal rights to which Biosite’s stockholders may be entitled will expire at midnight, EDT, April 27, unless extended.

Following completion of all requirements, Biosite will be a wholly owned Beckman Coulter subsidiary.

Beckman Coulter develops products designed to automate complex biomedical tests.

The Federal Trade Commission has approved Thermo Fisher Scientific’s (Waltham, Massachusetts) request to sell one of its divisions to two private equity firms.

Thermo Fisher, which makes scientific instruments and laboratory supplies, was formed by Thermo Electron’s $10.6 billion acquisition of Fisher Scientific International last year. As a condition for approving the transaction, the FTC said the combined company would have to sell a division that makes high-performance centrifugal vacuum evaporators, or CVEs.

CVEs, used by pharma research labs, employ heat, a vacuum and centrifugal force to process large collections of molecules.

The company proposed earlier this year to sell the CVE assets to Riverlake Partners and MVC Capital and the commission said Friday it has approved the transaction 5-0.

PerkinElmer (Waltham, Massachusetts) said it has acquired Improvision (Coventry, UK) for cash, the amount undisclosed.

Improvision is a provider of cellular imaging software and integrated hardware solutions used in life sciences research. The company had revenue of about 6 million ($11.87 million) in 2006.

PerkinElmer said that the addition of Improvision’s 3-D imaging and analysis software to its advanced HCS systems will provide a range of imaging solutions for analyzing cellular events, from real-time imaging of live cells to rapid high-content screening of multiple samples.

Improvision’s flagship product is Volocity, a high-throughput 3-D and 4-D imaging software enabling the capture, visualization and analysis of images of cell-based processes, as well as integrated software and hardware solutions for the control and analysis of microscopy systems.

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