Genentech Agrees to Acquire Tanox for $919 Million

South San Francisco, CA (Nov. 9)-Genentech, Inc. (www.gene.com) has agreed to acquire Tanox, Inc. (Houston, TX, www.tanox.com) for $20 per share, a total cash value of roughly $919 million. Tanox is a biotechnology company specializing in the discovery and development of biotherapeutics based on monoclonal antibody technology.

Genentech and Tanox have been working together in collaboration with Novartis (Basel, Switzerland, www.novartis.com)  since 1996 to develop and commercialize “Xolair,” a recombinant DNA-derived humanized IgG1k monoclonal antibody that selectively binds to human immunoglobulin E (IgE).  The drug was approved by the US Food and Drug Administration in 2003.

Upon the closing of the deal, Genentech will eliminate the royalty on Xolair it currently pays to Tanox and will obtain Novartis' profit share and royalty payments to Tanox. Genentech also will acquire Tanox's product pipeline. The deal is expected to close in the first quarter of 2007.

Genentech and Tanox also will be reviewing current operations and possible opportunities at Genentech for Tanox's employees in the coming months.

Tanox's primary manufacturing facility is located in San Diego, California. The facility includes two 2750-L bioreactors, one 500-L bioreactor, a process-development laboratory, and validated quality-control equipment. The company also has manufacturing operations at its headquarters in Houston, including one 1500-L bioreactor.