Novartis Acquires Genoptix For Cash And Gains Hematolgy and Oncology Diagnostic Service Enahancements To It's Healthcare Offerings.

Novartis, a privately held company, announced about its agreement to acquire Genoptix, Inc. (NASDAQ: GXDX) in all cash offer of  USD 25.00 per share for all outstanding shares of common stock of Genoptix, (Genoptix shares gained +5.10 dollars to a share value of $24.86 this morning, and as of this writing, it is still climbing.)The acquisition will enhanced Novartis's capability to improve health outcomes for patients by advancing the ability to define and monitor individualized treatment programs.as Genoptix laboratory service offerings provide strategic fit with the current portfolio of companion diagnostic programs within Novartis Molecular Diagnostics unit.

Press Release

Basel, January 24, 2011 - Novartis announced today that it has entered into a definitive agreement for the acquisition of Genoptix, Inc. (NASDAQ: GXDX), a specialized laboratory providing personalized diagnostic services to community-based hematologists and oncologists. The acquisition will enhance Novartis's tools and services that aim to improve health outcomes for patients by advancing the ability to define and monitor individualized treatment programs.

Under the terms of the agreement, Novartis will commence a tender offer for all outstanding shares of common stock of Genoptix at USD 25.00 per share in cash. This represents a total equity value of USD 470 million and an enterprise value of USD 330 million. The Novartis offer represents a premium of 39% over Genoptix's unaffected share price of USD 17.98 on December 13, 2010. It also implies a 27% premium over the closing price of USD 19.76 on January 21, 2011.

"The acquisition of the Genoptix medical laboratory will serve as a strong foundation for our individualized treatment programs," said Joseph Jimenez, CEO of Novartis. "Genoptix is an innovative company with a talented team of people who share our commitment to transforming the way medicine is practiced. By integrating Genoptix within Novartis, we can greatly enhance the value we add to patients, clinicians, payors and society."

Founded in 1999 and based in Carlsbad, California, Genoptix is a publicly traded, profitable laboratory that specializes in diagnosing cancers in bone marrow, blood and lymph nodes. In 2009, Genoptix had sales of USD 184 million, and for the first nine months of 2010, its reported revenue totaled USD 148 million.

Genoptix employs approximately 500 people and will become part of Novartis Molecular Diagnostics (MDx), a unit within the Novartis Pharmaceuticals Division. The acquisition will support and expedite the development of companion diagnostic programs, especially in oncology.

Novartis plans to maintain the existing operations and continue delivering Genoptix's portfolio of personalized diagnostics services to community-based hematologists/oncologists across the US.

The Genoptix Board of Directors has unanimously approved the transaction and agreed to recommend that Genoptix stockholders tender their shares. The transaction is conditional upon the tender of at least a majority of the shares of Genoptix in the tender offer, receipt of regulatory approvals and other customary closing conditions. The transaction is expected to close within the first half of 2011.

Novartis Discontinues Investigational Lung Cancer Drug Vadimezan (ASA404) Development.

Novartis announced that it has halted late-stage development of a new drug for lung cancer, Vadimezan (ASA404) citing Interim results from Phase III trial showed that the drug failed to meet primary endpoint of extending survival for the second-line treatment of non-small cell lung cancer.
Novartis had licensed the drug also known as vadimezan from Britain's Antisoma PLC in 2007.

Following is the press release from Novartis;

Basel, November 11, 2010 - Novartis announced today that the clinical trial program for the investigational cancer treatment ASA404 (vadimezan) will be discontinued and resources will be reallocated to other compounds in the oncology pipeline. The decision was made after interim results from a Phase III trial showed that ASA404 would not likely meet the primary endpoint of significantly extending overall survival when used in combination with chemotherapy for the second-line treatment of patients with advanced non-small cell lung cancer (NSCLC).

The study, called ATTRACT-2 (Antivascular Targeted Therapy: Researching ASA404 in Cancer Treatment), included patients with advanced (stage IIIb/IV) NSCLC of squamous or nonsquamous histology who experienced disease progression on or following an initial chemotherapy regimen. The trial has been stopped early based on a recommendation from an independent data monitoring committee. Investigators involved in the study and regulatory agencies have been notified of the decision to stop the trial. Novartis does not plan to proceed with regulatory filings based on these data.

An intangible asset impairment charge of approximately USD 120 million will be taken in the fourth quarter of 2010 in the Novartis Pharmaceuticals division.

About ASA404
ASA404 (vadimezan) is a tumor-vascular disrupting agent (tumor-VDA). Novartis signed an exclusive licensing agreement with Antisoma plc for the worldwide rights to ASA404 in April 2007. In March 2010, ASA404 also failed to meet the primary endpoint in the ATTRACT-1 trial, which evaluated ASA404 in combination with paclitaxel and carboplatin as first-line treatment for advanced (stage IIIb/IV) NSCLC of squamous or nonsquamous histology. 

Novartis