SYDNEY - Management of Biotech International Ltd. plans to “unlock the potential“ of diagnostic and imaging technology held by Agen Ltd. after gaining control of the company in a A$17.8 million stock market takeover bid last week.

By late last week, with acceptances still coming in, Perth-based Biotech had gained 90 percent of the stock of Agen, based in Brisbane, with its bid of A$0.25 a share, after Agen's board was unable to attract a better offer.

Despite a brave face earlier in the bid and a rejection of Biotech's unsolicited offer for the company, Agen directors sent a letter to their shareholders last week advising them to sell out, as the company's share price was likely to fall after the offer. The directors also declared that they intended to sell their own shares.

Chairman William Stubbs said the board contacted many parties potentially interested in Agen, but despite those efforts and an independent assessment of the company, which valued Agen shares at between A$0.28 and A$0.39 each, it appeared “unlikely“ a better offer would be made.

The success of the bid merges two small Australian biotech companies into a larger organization.

Biotech manufactures and sells high-temperature enzymes used in PCR technology and DNA sequencing under license from Hoffman-La Roche Ltd., of Basel, Switzerland.

Agen Ltd. also has pharmaceutical operations, which include making blood clot testing kits, and recently said it intended to develop an injectable version of the antibody used to diagnose blood clots. The antibody would be combined with other products to mark or treat blood clots. (See BioWorld International, March 25, 1998, p. 1.)

Biotech managing director Sabila Sassine said the companies had pharmaceutical operations in Brisbane which could be merged, and that he believed the Biotech management could help “unlock the potential“ of the diagnostic and imaging technology held by Agen.

He said Agen's management would be left in place, but there would be a strategic review of its operations, especially focused on the company's technology.

“They are sitting on some good technology; we will work on plans to take it forward,“ he said.

Sassine also said there would be no other acquisitions for the foreseeable future, while Biotech management concentrates on “bedding down“ this merger. In any case, the Agen merger will use up most of the cash reserves gained through Biotech's earlier merger with another, non-biotech company, Resources and Industries Ltd.

When the bid for Agen was launched in March, Sassine commented that merging Agen and Biotech would create a company with much more financial muscle than the two companies operating separately. *