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GlaxoSmithKline Sells Off Nearly 4.7 Million Affymetrix Shares to Close Long Investment Relation

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GlaxoSmithKline last week quietly sold 4.7 million shares of its Affymetrix stock in after-hours trading, liquidating an investment that goes back to the early 1990s when Affymetrix was being spun out of its parent company, Affymax.

Doug Farrell, Affymetrix’s vice president of investor relations, told BioArray News that Glaxo’s sale of its last large chunk of stock would, over time, reduce volatility in the stock. Three years ago, Glaxo started selling off what was at one time a 60-percent share of Affymetrix.

This sale of the pharma giant’s last large stake in the Santa Clara, Calif., microarray giant added up to perhaps as much as $110 million based on the prices at which the stock sold. According to SEC documents, Glaxo recorded a sale of 500,000 shares on March 19 at an average price of $27.98 per share, and another 4.2 million on March 20, at an average price of $26.01 a share.

“The market absorbed it all within the first two hours,” said Farrell.

Glaxo sold as Affy’s stock was nearing its 52-week high of $29.93, and triggered some tiny shivers through a marketplace that seemed to absorb the large blocks of shares without as much as a burp of indigestion. JPMorgan downgraded the stock, a move triggered more by technical trading mechanics than by material reasons. The stock moved slightly lower the rest of the week and into this week.

Glaxo acquired its stake in Affymetrix in 1995 when Glaxo Holdings agreed to pay $533 million for Affymax, which held a 65 percent stake in Affymetrix.

In August 2001, GlaxoSmith-Kline sold Affymax to Patricof & Co. Ventures, recording the deal as a sale of $4.3 million in net assets, while taking a charge against its 2001 earnings of about $435 million.

Affymetrix was founded in 1991 and was incorporated in 1992 as a subsidiary of Affymax N.V. of Amsterdam, Netherlands.

The company raised $21 million in Series A funds in 1993. The company went public in 1996, raising $92.3 million in gross proceeds, one of the year’s richest offerings. The IPO reduced Glaxo’s ownership stake to 34 percent.

Glaxo’s last sale, in May, reduced the company’s Affymetrix holdings to 8.7 percent as it collected some $75 million for selling 3 million shares at $25.

While this relationship may be over, there are still family reunions. Affymetrix spinoff Perlegen did its first commercial engagement with Glaxo, a research engagement to examine some 1 million SNPs. John Young, a Perlegen board member, was on Glaxo’s board.

— MOK

 

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