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Roche to Acquire 454 for $155M, Plans to Use Sequencer for IVD Applications

NEW YORK (GenomeWeb News) — Roche Diagnostics today said it plans to acquire 454 Life Sciences from CuraGen for $155 million in cash and stock.
Under the deal, Roche will put up $140 million in cash and as much as $14.9 million in outstanding stock options to acquire the subsidiary, which is now seeing early sales of its next-generation sequencers. 
Roche, which has been 454’s exclusive distributor since 2005, said the acquisition will solidify its access to future 454 sequencers and enable it to use the tools for in vitro diagnostic applications. The original marketing alliance forbade Roche from selling the sequencers for "regulated diagnostics" uses.
Roche said 454 and its 167 employees will remain at its headquarters in Branford, Conn.
Roche Diagnostics CEO Severin Schwan called the companies’ marketing and distribution agreement “very successful,” and said this deal “is part of our strategy to strengthen our position as a major player in the sequencing market.”
CuraGen said $25 million will be placed in escrow for 15 months, and “expects to receive about $85 million before fees and expenses.”
The deal is expected to close in the second quarter.
The acquisition comes around eight months after CuraGen disclosed it had begun weighing “strategic options” for the 454 business, which included divesting the unit, spinning it out as a public company, and other ideas.
It did not provide additional information about this new strategy, but interviews with industry insiders over the ensuing weeks painted a clearer picture.
Today, CuraGen CEO Frank Armstrong said the sale will allow the company to “gain liquidity on our investment” and to focus on pushing its oncology products toward the market.

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