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Excerpt from our Wall Street Breakfast, a one-page summary of this morning's key market-moving and stock-moving stories:

Genentech Plans to Buy Tanox for About $919 Million [Reuters]

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 Tanox Chart 10 11 06royalty 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 DangerousBarron's Looks at Wall Street's Most Respected Companies. Conference call transcripts: Genentech Q3 2006
Potentially impacted stocks and ETFs: Genentech Inc. (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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Source: Genetech to Acquire Xolair Co-developer Tanox for $919 Million