By Kim Coghill
Vysis Inc.¿s stock got a shot in the arm Wednesday after Abbott Laboratories said it would pay a 32.6 percent premium to acquire Vysis in a cash tender offer worth about $355 million.
Vysis¿ stock (NASDAQ:VYSI) closed at $30.26, up $7.26, or 31.6 percent, Wednesday while Abbott¿s stock (NYSE:ABT) closed at $54.24, up 38 cents. In the past year, Vysis¿ stock has traded between $5.56 and $29.50.
Abbott, of Abbott Park, Ill., is buying Vysis, a genomics disease management company, in order to expand its presence in the molecular diagnostics market, Don Braakman, Abbott¿s manager of communications, told BioWorld Today.
¿We¿ll have presence in the fast-growing molecular diagnostics market and we¿ll get access to Vysis¿ proprietary FISH technology,¿ Braakman said.
John Bishop, president and CEO of Downers Grove, Ill.-based Vysis, called the deal an ideal fit for Vysis and its technology. ¿Our technology really complements Abbott¿s broad capabilities worldwide. Because we are in the worldwide diagnostics market, we believe this deal creates significant synergies.¿
Vysis went public in 1998, selling 3 million shares at $12 each, and currently markets two tests for cancer. They are the PathVysion HER-2 DNA Probe kit, used to detect breast cancer, and the Vysis UroVysion Bladder Cancer Recurrence kit. Both are based on Vysis¿ FISH, or fluorescence in situ hybridization DNA probe technology, which detects changes in genes or chromosomes.
Vysis¿ product revenues for the first six months of the year were $12.7 million, and its total revenues were $13.3 million. It reported net income of $2.35 million for the period, and had 11.44 million fully diluted shares outstanding.
Back in April, Abbott and Vysis entered a worldwide distribution deal for the two cancer tests, which gave Abbott exclusive distribution rights in North America and Europe.
Vysis also has products for prenatal testing, chronic myelogenous leukemia, chronic lymphocytic leukemia and bone marrow transplants. Products in various stages of the pipeline address cervical cancer, lung cancer and melanoma.
¿This acquisition gives us the ability for accelerated acceptance and development of products in the marketplace,¿ Bishop said. ¿It gives us the ability for increased focus and other synergies. We see this as a good strategic fit.¿
The multimillion-dollar acquisition is scheduled to be completed by the end of the year, Braakman said. Vysis, which will retain its name, will become a subsidiary of Abbott.
In terms of the 130 Vysis employees, Braakman said the intent is to retain them.
The acquisition will cost Abbott about $30.50 per share.
Also as part of the deal, Abbot has entered an agreement with Amoco Technology Co., an indirect subsidiary of BP America Inc. and owner of about 65 percent of the outstanding shares of Vysis, in which Amoco has agreed to tender and not withdraw all of its Vysis shares in the tender offer.
Vysis has ongoing collaborations with other companies including South San Francisco-based Genentech Inc. and Basel, Switzerland-based Hoffmann-La Roche Inc., the developers of a monoclonal antibody treatment for metastatic breast cancer called Herceptin. Vysis is seeking FDA approval to expand its label on the PathVysion kit to assess patients for whom Herceptin therapy is being considered.
Braakman said he¿s unsure if Vysis¿ pre-existing collaborations or deals will be impacted by the acquisition.
In August, Vysis registered to sell 4 million shares in a public offering, 3 million of which were to be sold by BP plc. Vysis was seeking to raise $26 million for general corporate purposes, working capital and acquisitions of technology and intellectual property.