Compiled from media reports

The Tucson area's largest biotech employer, Ventana Medical Systems, has been purchased for $3.4 billion by Roche Holding AG, the Swiss pharmaceutical and diagnostics giant that had been angling to acquire Ventana since last June. As of Feb. 7, Roche had acquired 70.5 percent of Ventana shares, enough to close the deal. In January, Ventana's board of directors accepted an offer of $89.50 per share, nearly 20 percent higher than Roche's initial and repeatedly extended offer of $75 per share.

Roche has stated that Ventana will maintain its headquarters in Oro Valley, and may in fact expand at that site. Current CEO Christopher Gleeson will retain his position and join the board of Roche's diagnostics division. Severin Schwan, CEO of Roche's diagnostics division, indicated that Roche is interested in bolstering Ventana's research-and-development efforts and will use Roche's sales force to broaden the market for Ventana's diagnostic products.

"There is no doubt we want to invest in this business," Schwan said in the Arizona Republic. "We will provide additional resources. We will invest in research and development. We will invest in manufacturing."

Gleeson echoed Schwan's assurance of Ventana's future growth. "Roche has made it very clear that one of their most important objectives is to accelerate the value of our new products," he said in the Arizona Daily Star.

Just before Roche announced its initial takeover offer in June 2007, Ventana shares were trading at around $52. Despite the 45 percent premium in Roche's $75 per share bid, Ventana directors rejected it as too low, maintaining that the company's potential for growth made its sale value much higher. Roche ultimately extended the offer five times, but was unable to convince a significant number of shareholders to abandon Ventana's position, and shares consistently traded above the $75 level.

Roche maintained several times that $75 per share was a fair offer and it discussed an attempt to oust Ventana's board of directors as a means to end the impasse. Progress on the acquisition finally began to accelerate in November when Ventana agreed to open its books to Roche and was able to convince Roche that the Arizona firm had a higher value.

The sharing of company information "confirmed the positive business momentum of Ventana's business," Schwan said in the Daily Star. "It is reflective of a strategic fit."

The two firms appear to be well-matched for the merger. For example, one of Roche's most important products is the breast-cancer drug Herceptin. In January 2007, Ventana announced that it had received approval from the Food and Drug Administration for an antibody that can help assess whether breast-cancer patients are appropriate candidates for treatment with Herceptin.

"I am confident that Ventana's unique position at the forefront of the emerging field of companion diagnostics and its robust growth in both advanced staining and primary staining ideally complements the strong position of Roche in the field of diagnostics and oncology over the long term," Gleeson said.

Roche has invested heavily in its diagnostics division over the past several years, anticipating that the future of the pharmaceutical industry will include more precise matching of patients with drugs that will provide the greatest benefit. Last year, it spent over $1 billion to acquire three other diagnostics companies.

The purchase of Ventana comes on the heels of two other investments in southern Arizona biotech companies. In October, drug-maker Merck & Co. led a venture-capital investment of $10 million in High Throughput Genomics, a Tucson company that makes sample plates for chemical screening in genetic testing. And in November, another pharmaceutical giant, sanofi-aventis, broke ground on a $40-million facility, expanding their research and development operation in Oro Valley.

The Roche acquisition of Ventana "validates the quality of companies we have," said Nina Ossanna, chair of the Bioindustry Organization of Southern Arizona (BIO-SA), in the Daily Star.

Raymond Woolsey, president and CEO of the Critical Path Institute, a Tucson-based organization that works to make drug development faster, safer, and less expensive, said that Southern Arizona firms are drawing attention for their concentration on tailoring diagnostics, prognostics, and treatments to patients' unique genetic and proteomic profiles.

"This is big for Arizona," Woolsey said in the Republic. "Roche and a small number of large companies are seeing the light and realizing personalized medicine is what people want."

Founded in 1985 by Thomas Grogan, a University of Arizona pathologist, Ventana initially focused on equipment to automate tissue-sample staining and slide preparation to speed cancer diagnosis. Over time, the company added other diagnostic tools, including diagnostic reagents like the CB11 antibody used to gauge whether patients might respond to Herceptin. Dr. Grogan currently serves as Ventana's chief scientific officer and medical director.

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For more information:

"Roche in position to approve Ventana merger," Business Journal of Phoenix, 2/08/2008

"Swiss firm purchases Ventana for $3.4 bil," Arizona Republic, 1/23/2008

"Swiss drug giant buys Ventana Medical," Arizona Daily Star, 1/23/2008

"Roche's Higher Offer Wins Ventana After Seven Months," Bloomberg.com, 1/22/2008

Roche media release