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Invitrogen Believed Close to Acquiring Panvera

NEW YORK, Dec. 19 - Invitrogen is believed to be close to acquiring Panvera and will likely announce the deal early next week, GenomeWeb has learned.


A person close to Panvera, a maker of recombinant proteins and fluorescence-polarization assays, said Invitrogen has been "checking out" the company since at least mid-November, visiting its Madison, Wis., facility and chatting with employees. The source added that Invitrogen and Vertex Pharmaceuticals, Panvera's parent company, had planned to announce a deal yesterday, but lawyers had asked for more time.


Communicating to GenomeWeb on the condition of anonymity, the source explained that the all-cash purchase would also include a part of Aurora Bioscience--the company that bought Panvera in March 2001 before being nabbed itself one month later by Vertex.


The source said in an e-mail message that Invitrogen will buy Aurora's reagent technologies, but that Vertex intends to sell Aurora's instrumentation arm to another company.


Reached by telephone yesterday, Mike Wokasch, president of Panvera, referred a reporter to Vertex. A Vertex spokesman said the company does not comment on M&A rumors; Ian Smith, believed to be a key Vertex player in the acquisition talks, is on vacation. Officials from Invitrogen did not return multiple calls seeking comment.


However, given the opportunity to deny that the acquisition exists, at least three Panvera staffers reached by telephone this morning said they could not comment on the deal because it has not been made public yet.


From Invitrogen's perspective, Panvera's technology would make a nice fit within the big tool provider, according to some industry analysts. "It makes all the sense in the world to me," said John Sullivan, a Boston-based analyst with Stephens. "What Invitrogen wants to do is continue to leverage one of their best assets--their distribution channel.


Michael Martorelli, an analyst with South African-based Investec, agreed, saying he would not be surprised if Invitrogen "bought assays or platforms or chemistry services."


Aurora Bioscience acquired Panvera in March 2001 for about $36 million. One month later Vertex bagged Aurora in the hopes of expanding drug discovery in G-protein coupled receptor and ion channel genes.


Getting Panvera off its books also makes sense to Vertex. The pharma company's earnings have suffered since buying Aurora/Panvera. In fact, Vertex griped that its increased net loss in the third quarter "was mainly the result of ... reduced revenue from Panvera. ..."


Additionally, Panvera's discovery-tools and -services business contributed significantly to the drop in total receipts for the three-month period ended Sept. 30, which fell to $34.3 million from $40.4 million one year ago. Broken down, revenue from royalties and R&D collaborations was $21.4 million in the third quarter 2002 compared with $20.5 million one year ago, while revenue from the Panvera subsidiary fell to $12.9 million from $19.9 million during the same year-over-year period.


[In its third-quarter earning statement released Nov. 4, Vertex said "Panvera revenues were affected by the redirection of technologies and resources from the former Aurora business to Vertex's pharmaceutical business, and the timing of completion of certain contractual obligations. The obligations have recently been satisfied, and Panvera will record the revenue related to the contract in the fourth quarter."]


"From a 30,000 foot view, [Invitrogen buying Panvera] makes sense," said Martorelli. "Invitrogen is committed to growing as a tools company. ..."


Ken Howard in San Francisco contributed to this report.

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