EMERYVILLE, Calif. (AP) - Chiron Corp. will buy Cetus Corp. in a $660 million deal intended to create a health-care biotechnology giant with diverse products for fighting cancer and other diseases, the companies said Monday.
The merger between the prosperous Chiron and struggling Cetus is expected to be completed by the end of the year.
Cetus will first sell the rights to its valuable GeneAmp polymerase chain reaction technology to Hoffman-La Roche Inc. and F. Hoffmann-LaRoche Ltd. for $300 million and royalties. That technology is used to detect viruses, cancer cells and genetically transmitted diseases.
Cetus also will cut its staff and focus on drugs to fight cancer.
The two Emeryville-based companies and their corporate partners have 22 products in human clinical trials and 16 products in earlier stages of development.
People are also reading…
Under the agreement, Chiron will exchange 0.3 shares of its stock for each share of Cetus stock. The transaction, based on Friday's closing price of $60.75 a share for Chiron stock, is valued at about $660 million, the companies said. Chiron also will assume about $145.5 million of Cetus' outstanding debt.
Chiron, founded 10 years ago, achieved profitability last year with its pioneering diagnostic test for the hepatitis C virus. It also developed the technology for the first genetically engineered vaccine, for hepatitis B.
Cetus has been hurt by the government's rejection last year of its anti-cancer product interleukin-2. However, the drug is expected to receive approval and reach the market next year.
