NEW YORK (GenomeWeb) – Exiqon today reiterated its board of directors' support for Qiagen's proposed $100 million acquisition offer, saying that failure to close the deal poses risks to its short-term profitability and will necessitate an increased investment in its life sciences operations at the expense of its diagnostics segment.
In March, Qiagen announced that it had made an offer for Exiqon in an effort to expand its presence in the RNA analysis field. The offer was unanimously approved by Exiqon's board and had been accepted by shareholders representing about 81 percent of the company. Earlier this month, Qiagen extended the offer period to give the remaining Exiqon stockholders time to review the transaction.
If the deal does not get the necessary approval, "we need a new plan for the future stand-alone scenario that has the potential of generating longer-term shareholder value above the current offer," Exiqon Chairman Erik Walldén said in a statement. "Our industry is highly consolidated and size is increasingly becoming a competitive parameter. To more rapidly achieve size, we must accelerate revenue growth."
Doing so, he added, will require the company to focus on its life sciences operations, increasing investment in the research and development of proprietary products — including new ones for RNA sequencing — and in the commercialization of the newly developed XploreRNA sales channel.
To accommodate these planned investments, Exiqon said it would have to discontinue its diagnostics segment and only continue development of the most promising products in collaboration with partners.
If the Qiagen offer is rejected and Exiqon pursues this plan, "we may risk compromising our recently gained bottom line profitability," Walldén said. "However, increased investment is necessary to achieve higher growth, which is critically important for Exiqon to develop a business that is sustainable in the long term."