Excerpt from our Wall Street Breakfast, a one-page summary of this morning's key market-moving and stock-moving stories:
Summary: Genentech Inc., the world's #2 biotech company, said it plans to buy Tanox Inc. for about $919M ($20/share) in an effort to boost income through a jointly-developed anti-asthma treatment. Tanox shares jumped 43% in the post-market; Genentech shares were unaffected. As a result of the deal, Genentech will no longer need to pay royalties to Tanox in the sale of Xolair asthma treatment, as well as profiting from receiving Tanox royalty payments from Novartis AG, another Xolair partner. Genentech is holding a webcast at 8:30am to discuss the transaction.
Related links: Press release, webcast. Additional coverage: TheStreet.com. Commentary: Biotech Investing is Volatile, Unpredictable and Dangerous • Barron's Looks at Wall Street's Most Respected Companies. Conference call transcripts: Genentech Q3 2006
Potentially impacted stocks and ETFs: Genentech Inc. (Private:DNA), Tanox Inc. (TNOX), Novartis AG (NYSE:NVS). Genentech's main competitor is Amgen Inc. (NASDAQ:AMGN) • ETFs: Biotech HOLDRs (NYSEARCA:BBH) has a 38% holding in DNA.
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