Biosite Explores Merger with Inverness, Says Beckman Deal Still in Effect
In what could turn into a bidding war, Biosite said this week it will talk with Inverness Medical Innovation about its bid to acquire Biosite, further threatening to scuttle Beckman Coulter’s earlier offer for the company.
Last week Inverness announced an unsolicited bid of $90 per share for each of Biosite’s outstanding common stocks, a $5 per share improvement on a bid made March 25 by Beckman for Biosite. Beckman’s offer of $85 per share would total $1.55 billion.
This week, Biosite said its board has determined that Inverness’ bid is likely to lead to a better offer than Beckman’s, and as a result, Biosite officials will discuss with Inverness the possibility of the two companies merging.
“The Biosite board, together with its financial and legal advisors, will continue to evaluate all aspects of the acquisition proposal from Inverness,” Biosite said in a statement. The company, however, also said that “while the Inverness acquisition proposal is reasonably likely to lead to a superior proposal,” there is no guarantee that that will ultimately happen.
Scott Garrett, Beckman’s president and CEO, responded to Biosite’s decision by saying Inverness’ offer, though attractive on face value, is rife with financial risks.
“The fact that Inverness has not proposed a tender offer, which could be concluded relatively quickly, speaks volumes about the firmness of its financing. Inverness’ financing ‘commitments’ contain remarkably broad conditions and contingencies,” Garrett said in a statement.
In a statement made earlier this week, Inverness President, Chairman and CEO Ron Zwanzinger said the company has “arranged the necessary financing commitments” to carry out its proposed merger with Biosite.
Reacting to the Inverness proposal, Standard & Poors Ratings Service this week placed Inverness on CreditWatch with negative implications. The agency’s rating on Inverness is a non-investment grade of “B+.”
Biosite said that it is still seriously considering Beckman’s bid, and the merger agreement between the two companies remains in effect.
Biosite’s stock has soared about 69 percent since Beckman’s bid was announced.
Ciphergen on its Last Leg?
Ciphergen Biosystems and its auditor said that the company may have trouble keeping its doors open.
This week, the company said that an independent auditor, PriceWaterHouseCoopers, gave the company a “going concern” qualification to Ciphergen’s annual report, filed last week with the US Securities and Exchange Commission, meaning PWC has questions about the company’s ability to stay afloat.
In its annual report, Ciphergen said that it may have to raise funds this year “through the issuance of equity or debt securities, or a combination thereof, in the public or private markets in order to continue operations.”
While it is standard procedure for companies in their quarterly and annual earnings filings to issue warnings about adverse market conditions and other factors that may hinder their ability to do business, the warning in Ciphergen’s annual report, along with PWC’s assessment of the company, was notable for its frank, public assessment of Ciphergen’s clear and present woes.
In its filing, Ciphergen said that if additional funding is not found, it may have to delay development or commercialization of some of its products, or license out the rights to commercial products to third parties.
Its lead product in development is an ovarian cancer triage test. It also is developing tests that detect peripheral arterial disease and thrombotic thrombocytopenic purpura.
In 2006, Ciphergen posted a loss of more than $22 million on revenues of $18.2 million, according to its filing. As of Dec. 31, it had 36 full-time employees.
Blue Stream Outfits Lab with Agilent’s Proteomics Tools
Agilent said this week Blue Stream Laboratories has equipped its laboratory with Agilent proteomics instruments. Included are Agilent’s HPLC chip technology, its 6340 ion trap mass spectrometer, and the 6210 time-of-flight MS.
Blue Stream, based in Boston, is a contract research organization and testing laboratory. It specializes in recombinant glycoprotein, peptide, and small-molecule product characterization, lot release, and stability programs for pharmaceutical and biopharmaceutical product development.