Qiagen to Buy Digene for $1.6B; Merger Links US-Europe Molecular Dx Strategy
Qiagen announced plans over the weekend to purchase diagnostics firm Digene in a cash and stock deal valued at around $1.6 billion.
Under the terms of the agreement, Digene shareholders will receive either $61.25 in cash for each share of Digene stock they hold or 3.545 shares of Qiagen's stock.
The $61.25 per share offer reflects a 37 percent premium for Digene’s stock, which closed at $44.77 on the last trading day before the deal was announced.
The total consideration will consist of 55 percent cash and 45 percent Qiagen stock.
The combined company is expected to have over $800 million in overall revenues in 2008, with $350 million coming from molecular diagnostics.
Once the deal is finalized, Digene, based in Gaithersburg, Md., will operate as a subsidiary of Qiagen, which is headquartered in Venlo, the Netherlands. Qiagen's shareholders will own roughly 78 percent of the combined company, while Digene's shareholders will own around 22 percent.
Digene's core product is a human papillomavirus test that screens for high-risk strains of HPV that have been linked to cervical cancer. The test has been approved by the US Food and Drug Administration and has received European CE-mark approval.
However, Digene is currently embroiled in a lawsuit regarding its key HPV diagnostic with competitor Third Wave. Digene sued Third Wave in January claiming that it has infringed one or more claims of US Patent No. 5,643,715, entitled “Human Papillomavirus Type 52 DNA Sequences and Methods for Employing the Same.” The patent belongs to Georgetown University, but Digene holds exclusive licensing rights.
Third Wave countersued Digene in March criticizing that by controlling 99 percent of the HPV diagnostic market Digene was “abus[ing] its monopoly power to thwart competition.”
Pending the resolution of the lawsuit, the deal will give Digene an immediate presence in Europe, which could be a lucrative market for the HPV test, and will strengthen Qiagen's molecular diagnostics assay portfolio.
Qiagen CEO Peer Schatz said in a statement that the deal "creates significant value for our shareholders and instantaneous market and technology leadership" in the molecular diagnostics market.
By connecting the two companies' virology and oncology molecular diagnostics programs, Schatz said that the deal "provides us with many ways to drive top-line and bottom-line growth, such as access to new channels with existing and new products and combined technology, resources and infrastructure to provide greater operating strengths."
Schatz also said Qiagen does not expect any layoffs as a result of the merger.
Genomics Will Be a Focus of New $700M VC Initiative in California
A California private equity group plans to invest as much as $700 million in new healthcare initiatives that will include funding for predictive genomics, as well as other high-tech health-care programs such as telemedicine and chronic care improvement, the fund, Health Evolution Partners, said this week.
The state's Public Employees Retirement System will commit $500 million to the fund, with its emphasis on “direct investment, private-equity investments and strategic investments,” and as much as $200 million for “investments in health and other initiatives,” Health Evolution said.
The investments will come through a private-equity fund aimed at pumping money into “promising health care ventures that challenge traditional models,” and intends to help companies press their innovations toward commercialization.
Health Evolution, based in San Francisco, said its central goal is to “commercialize those innovations that enable a shift to information-rich, defect-free and cost-effective health services.”
Genentech Reports Phase III Adjuvant Herceptin Trial Results at ASCO
Genentech this week reported that the addition of Herceptin (trastuzumab) significantly improved overall survival in women with HER2 positive, node-positive breast cancer at three-year follow up when compared to patients receiving standard adjuvant treatment alone.
The data, reported at the American Society of Clinical Oncology’s annual meeting in Chicago, was from updated results of a joint analysis of two Phase III clinical trials studying Herceptin for the adjuvant treatment of HER2-positive breast cancer.
“Herceptin (with chemotherapy) is the first and only HER2-targeted therapy to demonstrate an overall survival benefit in adjuvant breast cancer, based on these study results, and in first-line metastatic HER2-positive breast cancer,” Genentech said in a release.
The two randomized, controlled Phase III studies evaluated nearly 4,000 patients with HER2-positive breast cancer receiving four cycles of doxorubicin and cyclophosphamide followed by paclitaxel, either every three weeks or weekly for 12 weeks, or the same regimen plus 52 weeks of Herceptin.
The results from the study showed that the addition of Herceptin to standard adjuvant therapy reduced breast cancer recurrence by 52 percent in women with HER2-positive, node-positive breast cancer, compared to patients who received standard adjuvant therapy without trastuzumab.
After four years of follow up, 85.9 percent of women treated with Herceptin plus chemotherapy were disease free versus 73.1 percent of women treated with chemotherapy alone. “Notably, despite some patients crossing over to the Herceptin-containing arm, the additional follow-up data presented [at ASCO] showed an improvement in overall survival,” Genentech said.
The studies showed that 92.6 percent of women treated with Herceptin plus chemotherapy were still alive at four years of follow-up, while 89.4 percent of women were alive after the same period when treated with chemotherapy alone.
“This updated survival analysis showed a statistically significant 35 percent reduction in the risk of death (based on a hazard ratio of 0.65, p-value = 0.0007), which is equivalent to a 54 percent improvement in overall survival,” the company said in a statement.
AutoGenomics TB Genetic Drug Resistance Test In Process of Being Validated
AutoGenomics announced last week that its Infinity MTB DR genetic test, which identifies the presence of multidrug-resistant TB by detecting the resistance gene in the mycobacteria, is currently being validated.
MDR-TB, or multidrug-resistant TB, is a disease caused by a Mycobacterium tuberculosis strain that is resistant to isoniazid and rifampicin, which are two main first-line TB drugs. XDR-TB, or extensive drug resistant, tuberculosis is the form of TB resistant to three or more drugs.
“The ability to rapidly verify an active MTB infection and determine its resistance to first-line antibiotics is essential to isolating and eventually managing both the patient and individuals who may have been exposed,” said Phyllis Della-Latta, director of Columbia University’s Clinical Microbiology Laboratory where the AutoGenomics test is currently being validated.
Genomic Health Taps Medical Solutions to Distribute Oncotype DX in UK
Genomic Health said last week it has hired Medical Solutions to exclusively distribute its Oncotype DX breast cancer assay in the UK.
Chu Chang, vice president of business development at Genomic Health, said the agreement with the UK diagnostics and healthcare company is part of Genomic Health's strategy to broaden access to test patients outside of the US.
The Oncotype test predicts the likelihood of breast cancer recurrence in women with newly diagnosed, early-stage invasive breast cancer. It also predicts the chance that chemotherapy will benefit “a large portion” of patients with early-stage breast cancer, the company said.
Genomic Health said it has service and supply agreements for the Oncotype in Israel and Japan. In the US the test is performed by CLIA-certified labs.
NHGRI to Sequence Genomes of 1,000 Individuals as It 'Explores Medical Role' of DNA Sequencing
The National Human Genome Research Institute plans to launch a massive study to sequence the genomes of 1,000 individuals with a common disease and chart their progress over time, Pharmacogenomics Reporter sister publication GenomeWeb Daily News reported last week.
According to the NHGRI, the trans-NIH program, called ClinSeq, has a broader aim of helping the researchers explore the medical role for genome sequencing.
The two year study will use 14 Applied Biosystems 3730 sequencers to initially screen 1,000 individuals with symptoms of coronary heart disease for between 200 and 400 genes linked to the condition. The patients will later be screened for other genetic variations.
According to one NHGRI official, the dearth of DNA samples has slowed research into the genetic underpinnings of diseases. The NHGRI hopes the study, which will be led by Les Biesecker, Human Development section chief at the NHGRI, will also shed light on ways to effectively perform clinical sequencing projects, which in turn could improve pharmacogenomics.
The NHGRI said the initial phases of the study, which involves collecting and sequencing patient samples, will last two years. The subjects will be aged between 45 and 65 and located in and around the Baltimore, Md., and Washington, DC, regions, according to the NHGRI. The sequencing will be conducted at the NHGRI’s sequencing facility in Rockville, Md.
The data will be anonymized and available on the internet for researchers.
ClinSeq will involve researchers from the National Heart, Lung, and Blood Institute; the NIH Clinical Center; the National Intramural Sequencing Center; the NIH Heart Center; and the National Institute of Biomedical Imaging and Bioengineering, the NHGRI said on its Web site.
Additional information about the study can be found here.