Genentech to buy Tanox for $919M in cash
The mergers and acquisitions continue unabated. Genentech is to buy Tanox for almost $1 billion in cash! Tanox is Genentech partner on Xolair (omalizumab) an asthma drug.
Genentech to buy Tanox for $919M in cash
Both of these companies have been working with Novartis for 10 years (since 1996). This will allow Genentech to no long pay royalties to Tanox and also allows it to obtain Novartis’s royalty payments to Tanox.
THis is similar to the Eli lilly purchase of Icos. In that case Lilly felt it was better to purchase Icos than to continue paying royalties on Cialis. This is one of the dangers for a small company that partners with a larger company. If the drug becomes a major seller then it may be easier for the large company to gobble up the smaller one than to continue paying royalties.
Disclosure: I own a few shares of Genentech.
Technorati Tags: Genentech, Novartis, omalizumab, pharma M&A, pharmaceutical deals, Tanox, Xolair
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