Genentech Buys Tanox for $919 Million

Genentech (South San Francisco, CA, www.gene.com) announced on November 9 that it will acquire Tanox, Inc. (Houston, TX, www.tanox.com), a biotechnology company specializing in the discovery and development of biotherapeutics based on monoclonal antibody technology. Genentech will pay $20 a share for Tanox’s stock, for a total cash value of approximately $919 million.

Genentech and Tanox have been working together since 1996, in collaboration with Novartis, to develop and commercialize “Xolair,” an anti-IgE monoclonal antibody approved by FDA in 2003 to treat allergic asthma. By acquiring Tanox, Genentech will improve its financial results by eliminating the royalty it currently pays to Tanox and by obtaining Novartis’s profit share and royalty payments to Tanox.