PARIS ¿ Genset SA on March 15 exercised its put option to issue $10 million worth of stock to Abbott Laboratories. Abbott is to purchase 54,763 ordinary shares in the Paris-based genomics company at a price of Euro188.33 per share, equivalent to $60.87 per ADS at an exchange rate of $0.9696 per euro.
The terms of the put option are set out in the September 1997 subscription agreement between the two companies. Genset originally had two years in which to exercise it, but that was subsequently extended by a year to September 2000. It provides for Abbott Park, Ill.-based Abbott to pay a price equal to the average closing price per share on the Paris Nouveau Marchi on the 20 trading days preceding the exercise date.
That is a long period in the life of a biotechnology share on the extremely volatile French market these days, however. Following in the footsteps of the Nasdaq, there was a sharp fall in biotech share prices on the Nouveau Marchi on March 15, when Genset closed 16.3 percent down at Euro126, having already shed 18.6 percent the day before. The following day, March 16, it dropped another 7.9 percent to Euro116. Less than two weeks before, on March 3, Genset shares were trading at Euro238, which was more than four times the level they were at in early January (Euro54.50 on January 5, for example).
Genset¿s Director of Legal Affairs, Jonathan Burnham, told BioWorld International that March 15 ¿was absolutely the best day in Genset¿s history for exercising this option.¿ He noted that Abbott already had bought $10 million of Genset stock in September 1997, ¿when the price was around 300 francs (Euro45.70),¿ so averaging out the two moves, it got a pretty good deal.
Abbott¿s initial purchase of Genset stock and the granting of a put option to Genset for a second followed the conclusion of a pharmacogenomics research collaboration agreement between the two companies in July 1997. Three weeks ago, they entered into a second research collaboration for the discovery of genes associated with bipolar disorder and Type II diabetes (see BioWorld International, March 5, 2000, p. 6).
On March 14, Genset said it had named former Abbott executive Dr. Andre Pernet to its board of directors. Pernet retired from Abbott in February 1999, after spending his entire 26-year career with the company. He had been divisional vice president in charge of worldwide pharmaceuticals development at Abbott since 1992, and in 1994 was elected corporate officer and vice president, pharmaceutical products research and development. Since retiring, he has served on the advisory boards of several pharmaceutical and biotechnology companies.