Roche to Acquire Igen for $1.26 Billion

Roche has been making large royalty payments to Igen for use of the technology. However, ownership of the patents and almost all of Igen's business are to be spun off in a new company to be 100% owned by current Igen shareholders. Roche is to provide the new company with $155 million in working capital and will pay a fixed fee of $5 million per month for use of the Origen technology pending completion of the transaction. In addition, Roche will pay Igen $18.6 million in cash for compensatory damages, as confirmed by a US Court of Appeals.

Thus Roche will be able to continue to sell and further develop its Elecsys products for centralized laboratories, hospital labs, and blood banks. In addition, Roche will be able to sell certain Origen-based immunochemistry systems into point-of-care sites and physicians' offices. Any improvements of the ECL technology developed by Roche will remain with Roche, but Igen will receive a license to those improvements as well as licenses to Roche's polymerase chain reaction (PCR) for use in most fields. In 2002, Roche's ECL-based diagnostics business had sales of about $404 million.

Igen develops and markets biologic detection systems based on its proprietary Origen technology for a wide range of applications. The new company, to be also based in Gaithersburg, will continue Igen's biodefense, life science, and industrial businesses and will be able to address the entire clinical diagnostic market previously exclusively held by Roche. The new company will be named prior to closing the transaction.

"We are very pleased with the result of these negotiations,” said Franz B. Humer, chairman and CEO of Roche. "Through this acquisition, we have been able to resolve this legally and contractually highly complex dispute in the best interest of both companies and their shareholders. I am convinced that we have achieved a clear win-win situation for all parties involved.”




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