Igen shareholders to receive $47.25 in cash per share and one share of a new public company to be spun-off from Igen.
Igen spin-off company will be 100% owned by Igen shareholders and have ECL patents, historic Igen businesses, and approximately $155 million in working capital
Roche and Igen International Inc. jointly announced today that they have reached definitive agreements to resolve their long- running dispute on the rights to Igen's electrochemiluminescence (ECL) technology used by Roche's diagnostics division. The transaction, which has been approved by the Boards of Directors of Igen and Roche, will enable both companies to independently maximize the value of their respective technology assets.
Under the terms of the agreements, Roche will acquire Igen, thereby securing rights to the ECL-technology used in its Elecsys diagnostics product line. For each Igen share, Igen shareholders will receive $47.25 in cash and one share of a newly formed public company to be spun off from Igen. Igen has 26.7 million fully diluted outstanding shares. The new company, which will be 100% owned by Igen shareholders, will own the ECL-technology and have approximately $155 million in working capital provided primarily by Roche as part of the transaction, which is in addition to the $47.25 per share cash payment to Igen shareholders.
Through the acquisition of Igen, Roche will secure new non-exclusive, fully paid-up worldwide and perpetual rights which will permit Roche to continue to commercialize the ECL-technology in the human in-vitro diagnostics field and continue to sell and further develop its Elecsys products for centralized laboratories, hospital labs and blood banks. In addition, subject to certain limitations, Roche will be able to sell ECL-based immunochemistry systems into point of care sites and physicians offices. Improvements of the ECL technology developed by Roche will remain with Roche. As reported by Roche, Roche's ECL-based Lab Diagnostics business had sales in 2002 of approximately CHF 560 million (US $404 million) with a compound annual growth rate in local currencies of approximately 23% over the last three years.
Upon completion of the acquisition, the new company to be spun-off to Igen shareholders will immediately hold Igen's patents and the historic operations related to Igen's biodefense, life science, industrial and clinical testing businesses, as well as Igen's equity interest in the Meso Scale Diagnostics joint venture. The new company will be able to address the entire clinical diagnostic, blood bank and reference lab markets that were previously exclusively held by Roche. The new company will also receive rights to certain improvements relating to Roche's Elecsys product line and royalty-bearing licenses to PCR, a nucleic acid amplification technology, for use in most fields. The new company, which will be named prior to closing the transaction, will be managed by Igen's current management team and headquartered in Gaithersburg, Maryland. The company is expected to be listed on Nasdaq after completion of the acquisition and the spin-off.
As part of the agreement, Roche will immediately pay Igen $18.6 million in cash for compensatory damages as confirmed on July 9, 2003 by the U.S. Court of Appeals for the Fourth Circuit. Roche will also immediately pay to Igen the royalties owed to Igen for the quarter ended June 30, 2003. Effective immediately, there will be no further royalties owed to Igen, and Roche will pay a fixed fee of $5 million per month to Igen for the use of the ECL-technology until the transaction closes. As part of the transaction, the new company will make capital contributions of $37.5 million to Meso Scale Diagnostics.
The transaction is expected to close by calendar year-end, subject to the approval of Igen shareholders and receipt of necessary regulatory approvals and other limited closing conditions.