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Exelixis Acquires Agritope, Expanding its Agribusiness Reach

NEW YORK, Sept. 8 -- Seeking to extend the use of its model organism and comparative genomics technologies, Exelixis (Nasdaq: EXEL) said Thursday it had agreed to acquire agricultural genomics company Agritope (Nasdaq: AGTO) in an all stock deal valued at $68 million.

Exelixis of San Francisco will offer between 0.28 and 0.35 of a share for each of the Portland, Ore.-based company's 4.5 million outstanding shares. The offer, which puts a $14 pricetag on Agritope's shares, represents a 114 percent premium on Thursday's closing price of $6 17/32.

On Friday Agitrope surged to close up $4 15/32, or more than 68 percent, at $11 a share.   Exelixis shares dropped $1 13/16, or 4 percent, to close at $44.

Agitrope shares will be converted to Exelixis common stock shares within a $40 to $50 collar, based on the average Exelixis closing price for the 20 days before the fifth business day prior to the completion of the transaction.

The acquisition of Agritope provides Exelixis with additional intellectual property in plant model systems and technologies, positioning it to attack the agricultural genomics market.

Exelixis has partnerships with Bayer, Bristol-Myers Squibb (NYSE: BMY), Dow Chemical's AgroSciences unit (NYSE: DOW), and Pharmacia (NYSE: PHA).

The company said it will continue to develop comparative genomics technologies for the pharmaceutical industry while increasing its agribusiness customer base.

“Our stated strategy is to build out our company in areas outside of pharmaceuticals with a focus on agricultural biotechnology,” said Exelixis president and CEO George Scangos in a statement.

“The economic opportunities that can be addressed through sophisticated plant engineering are substantial,” he said.

The companies expect the transaction to be completed by the end of the year, pending shareholder and regulatory approval.

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