Biotech Day In Review: Agilent Buys Stratagene For $245.5 Million

Late last week, Agilent Technologies (A) agreed to pay $245.5 million for Stratagene, a 29% premium to its closing price on Thursday.

Stratagene markets reagents for life-science research and instruments, employing 400 people world-wide. In 2006, Strategene had revenue of $95.6 million. Stratagene climbed $2.20 to $10.71, an increase of 26%, leaving the company very near the take-out price of $10.94. Agilent was 35 cents higher at $35.06.

Johnson & Johnson (JNJ) paid $300 million to buy Dabao Cosmetics Co., the largest cosmetics company in China (see story). In 2006, Dabao produced $5.3 million in profit on revenue of $86.7 million, so J&J is paying about 57 times last year’s earnings. The purchase will give J&J entry into the Chinese market for its Neutrogena line of cosmetics. Johnson & Johnson rose 8 cents to $61.63.

Johnson & Johnson said the FDA has recommended stronger warnings for the risk of hallucinations in children who use the bladder drug Ditropan. The label already carries cautions for insomnia, nervousness, confusion and other central nervous system risks. The FDA staff thinks more explicit warnings are warranted. On Wednesday, an FDA panel will review the use of Ditropan and several other drugs in children.

Benda Pharma of China (BPMA.OB) will buy a 57.57% stake in Shenzhen SiBiono GeneTech Co, which has a gene therapy product approved for cancer. Gendicine is the only gene therapy product that is approved anywhere in the world. Benda bought its stake from two selling shareholders for $7.7 million. Benda also awarded 2.1 million restricted shares in return for consultancy services. If the shares do not have a value of $3.60 each after 15 months, Benda must pay an additional $7.7 million. To pay for the acquisition, Benda placed $7.4 million of units with institutional investors. Benda climbed 10 cents to $1.65.

Ariad (ARIA) said that feedback from the FDA indicates it will switch the proposed patient population for its Phase III trial of AP23573, an oral mTOR inhibitor, back to metastatic sarcoma. This will push back initiation of the trial to Q3, about a three-month delay. The news sent Ariad lower; it dropped 62 cents to $4.32.

The Merck (MRK) drug Arcoxia faces an uphill battle when it faces an FDA advisory panel later this week. The COX-2 arthritis drug, similar to the now-withdrawn Vioxx, is in use in many parts of the world, but it awaits an FDA decision. Two prominent cardiologists expressed concerns about the cardiovascular side effects of Arcoxia, which is what doomed Vioxx. Arcoxia had global sales of $265 million last year. Merck was up 11 cents at $45.65.

Caliper Life Sciences (CALP) will provide in vivo profiling experiments for Pfizer (PFE). Under the one-year contract, Caliper will study the effects of acute or chronic drug dosing in mice to look for new uses of compounds in development. Caliper was down 4 cents at $5.72.

The FDA approved use of HepaGam B, a product from Cangene Corporation that helps prevent the recurrence of hepatitis B in patients following liver transplantation. HepaGam B has a purified antibody that is specific for the hepatitis B virus.

Biotech slipped slightly in a day that saw most indexes little changed. The Amex Biotechnology Index was off .28%, while the S&P 500 was .06% higher and Nasdaq was lower by .09%.

Disclosure: none.

Comments

[jturano7423]

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JT