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UPDATE: Exelixis to Acquire Genomica for its Cash

SAN FRANCISCO, Nov. 19 - Exelixis has agreed to acquire Genomica for a stock-for-stock transaction valued at $110 million, the companies announced on Monday.


The agreement, approved by both companies' boards of directors, calls for South San Francisco, Calif.-based Exelixis to put in an offer for 100 percent of Genomica's outstanding common stock on or about Nov. 27, according to the companies.


The deal is scheduled to close during the first quarter of 2002


Exelixis CEO George Scangos said although his company intends to use Genomica's software for its internal drug development activities, he stressed that he does not plan to continue commercial sales of the firm's products and said that he is more interested in Genomica's assets, which as of Sept. 30 comprised $110.8 million in cash, cash equivalents, and investments.


"We do not intend to get into the software business," said Scangos in a conference call to discuss the acquisition. "We believe that Genomica's substantial cash and investments will significantly enhance our ability to move our drug-discovery programs forward, and that their software will be an important tool to manage human data during the clinical development of our compounds."


Scangos said only "a few" of Genomica's remaining 50 employees are expected to join Exelixis. These employees would support Genomica's existing customers, that include AstraZeneca, GlaxoSmithKline, Aventis, and the National Cancer Institute. Subscriptions for the bulk of these customers expire in the summer of 2002, said Genomica CEO Teresa Ayers.


A spokesman for Exelixis, a genomics-based drug-discovery company with a focus on comparative genomics, said none of Genomica's management team or board members would be joining Exelixis.


Genomica, based in Boulder, Colo., has alliances with Applied Biosystems and Celera Genomics, which are expected to continue after the merger, according to the Exelixis spokesman.


In early October, the company announced a drastic restructuring plan that included the layoff of 100 of its 150 employees.

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