Gen-Probe to Acquire Prodesse, Leader in Molecular Testing for Respiratory Infectious Diseases, for $60 Million in Cash Plus Pot
October 06 2009 - 4:01PM
PR Newswire (US)
- Gen-Probe Sales Force to Promote Prodesse's FDA-Cleared, Highly
Sensitive Assay for Influenza - - Transaction Expected to Provide
Immediate Boost to Gen-Probe's Non-GAAP Earnings and Revenue Growth
Rate - SAN DIEGO, Oct. 6 /PRNewswire-FirstCall/ -- Gen-Probe
Incorporated (NASDAQ:GPRO) announced today that it has signed a
definitive agreement to acquire Prodesse, Inc., a privately held
leader in molecular testing for influenza and other infectious
diseases, for approximately $60 million in cash. Gen-Probe's
purchase price could increase to up to $85 million if Prodesse
achieves certain financial and regulatory milestones in 2010 and
2011. "We believe acquiring Prodesse supports our strategic focus
on commercializing differentiated molecular tests for infectious
diseases," said Carl Hull, Gen-Probe's president and chief
executive officer. "The acquisition is expected to boost our
near-term earnings and revenue growth by providing additional
leading-edge assays for our experienced sales force to promote to
our global customer base." In connection with the acquisition,
Gen-Probe and Prodesse have signed an agreement under which
Gen-Probe's sales representatives in the United States, Canada and
Europe will begin co-promoting Prodesse's products in mid-October.
"Our acquisition by Gen-Probe validates the significant progress we
have made in developing and commercializing molecular assays that
help doctors and laboratories diagnose respiratory and other
infectious diseases more accurately than traditional methods," said
Tom Shannon, Prodesse's president and chief executive officer. "We
believe we can prepare for and accelerate our next stage of growth
by leveraging the resources and expertise of one of the most
established and highly respected molecular diagnostics companies in
the world." Both companies' boards of directors have unanimously
approved the transaction, and the Prodesse shareholder votes
necessary to approve the transaction have already been obtained.
The transaction is expected to close within a month, subject to
customary conditions. About Prodesse Prodesse develops molecular
diagnostic reagents for a variety of infectious disease
applications. Prodesse sells three FDA 510(k) cleared products in
the United States, and two additional CE-marked products in Europe.
The company's products can be used in conjunction with various
nucleic acid extraction and real-time PCR (polymerase chain
reaction) platforms, including Cepheid's SmartCycler® II System.
Prodesse's ProFlu+(TM) test was cleared by the U.S. Food and Drug
Administration (FDA) in January 2008 for the detection and
discrimination of Influenza A Virus, Influenza B Virus and
Respiratory Syncytial Virus. It is the only commercially available,
FDA-cleared molecular test for these respiratory viruses that uses
real-time PCR technology. Test results can be obtained in as little
as three hours using the assay - a significant improvement over
culture-based methods. During a public health emergency, this speed
to result and the high sensitivity of molecular tests can make
important contributions to effective infection control efforts.
Prodesse also sells FDA-approved, real-time PCR assays for the
clinical diagnosis of Clostridium difficile (C. diff), a bacteria
that is the most serious cause of antibiotic-associated diarrhea,
and human metapneumovirus, a common cause of lower respiratory
infection in children. Financial Detail Gen-Probe expects to
finance the transaction with cash currently on its balance sheet.
Gen-Probe expects to record, under U.S. GAAP, charges for
non-recurring cash and non-cash acquisition-related costs following
the close of the transaction. The magnitude of these charges will
not be determined, under the rules of purchase accounting, until an
independent, third party valuation has been completed to allocate
the purchase price over the assets and liabilities acquired. The
Company has therefore not provided GAAP financial guidance
regarding the transaction in this news release. In addition,
transaction-related professional fees will be expensed as incurred,
under the rules of SFAS 141R. Excluding the charges discussed
above, and on a non-GAAP basis, Gen-Probe's initial expectation is
that the acquisition will add approximately $0.05 to the Company's
2010 earnings per share (EPS), based on approximately $15 million
in total revenues. Cooley Godward Kronish is serving as legal
counsel to Gen-Probe on this transaction. XMS Capital Partners and
Leerink Swann are serving as financial advisers to Prodesse, and
Michael Best & Friedrich, LLP is serving as legal counsel.
About Gen-Probe Gen-Probe Incorporated is a global leader in the
development, manufacture and marketing of rapid, accurate and
cost-effective nucleic acid tests (NATs) that are used primarily to
diagnose human diseases and screen donated human blood. Gen-Probe
has approximately 25 years of NAT expertise, and received the 2004
National Medal of Technology, America's highest honor for
technological innovation, for developing NAT assays for blood
screening. Gen-Probe is headquartered in San Diego and employs
approximately 1,200 people. For more information, go to
http://www.gen-probe.com/. About Non-GAAP Financial Measures In
this news release, non-GAAP EPS excludes non-cash charges such as
transaction-related intangible amortization expense, as well as
transaction expenses. Gen-Probe's management does not itself, nor
does it suggest that investors should, consider non-GAAP financial
measures in isolation from, or as a substitute for, financial
information prepared and presented in accordance with GAAP.
Gen-Probe's management believes that non-GAAP financial measures
provide meaningful supplemental information regarding the Company's
performance by excluding certain expenses that may not be
indicative of core business results. Gen-Probe believes that both
management and investors benefit from referring to non-GAAP
financial measures in assessing Gen-Probe's performance and when
planning, forecasting and analyzing future periods. Non-GAAP
financial measures also facilitate management's internal
comparisons to Gen-Probe's historical performance and our
competitors' operating results. Gen-Probe's management believes
that non-GAAP financial measures provide Gen-Probe investors
meaningful supplemental information regarding the expected
financial results of the acquisition. Caution Regarding
Forward-Looking Statements Any statements in this news release
relating to Gen-Probe's expectations, beliefs, plans, objectives,
assumptions or future events or performance are not historical
facts and are forward-looking statements. These statements are
often, but not always, made through the use of words or phrases
such as believe, will, expect, anticipate, estimate, intend, plan
and would. For example, statements concerning the closing of the
transaction, the expected benefits of the proposed acquisition and
expected financial results are all forward-looking statements.
Forward-looking statements are not guarantees of performance. They
involve known and unknown risks, uncertainties and assumptions that
may cause actual results, levels of activity, performance or
achievements to differ materially from those expressed or implied.
Some of these risks, uncertainties and assumptions include but are
not limited to: (i) the risks that the closing conditions of the
acquisition may not be satisfied, that closing will not occur, or
that the closing conditions may take longer to satisfy than
anticipated, (ii) the risk that Gen-Probe will not successfully
integrate Prodesse or achieve expected strategic or financial
benefits, (iii) facts relating to Prodesse that may affect timing,
or strategic and other benefits of the proposed acquisition, are
unknown to Gen-Probe, and (iv) the risk that Gen-Probe may not
achieve its expected growth, revenue, earnings or other financial
targets that are assumed in its accretion analysis. The foregoing
list sets forth some, but not all, of the factors that could affect
Gen-Probe's ability to achieve results described in any
forward-looking statements. For additional information about risks
and uncertainties Gen-Probe faces and a discussion of its financial
statements and footnotes, see documents filed with the SEC,
including the most recent annual report on Form 10-K and all
subsequent periodic reports. Gen-Probe assumes no obligation and
expressly disclaims any duty to update forward-looking statements
to reflect events or circumstances after the date of this news
release or to reflect the occurrence of subsequent events. Contact:
Michael Watts Vice president, investor relations and corporate
communications 858-410-8673 DATASOURCE: Gen-Probe Incorporated
CONTACT: Michael Watts, Vice president, investor relations and
corporate communications of Gen-Probe Incorporated, +1-858-410-8673
Web Site: http://www.gen-probe.com/
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