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Roche to acquire BioVeris to expand its leading ECL immunochemistry business into new market segments


Roche to pay US dollars 21.5 per share - total transaction value of ca. 600 million US dollars

Roche and BioVeris Corporation announced today that they have signed a definitive merger agreement under which Roche will acquire 100% ownership in BioVeris for 21.5 US dollars per share in cash or a total of approximately 600 million US dollars. This acquisition will allow Roche Diagnostics to expand its immunochemistry business from the human diagnostics field into new market segments such as life science research, life science development, patient self-testing, veterinary testing, drug discovery, drug development and clinical trials. The market for clinical trials is growing at approximately 10% per annum, and with these new fields an additional market of close to 400 million Swiss francs opens up for Roche. Today, Roche is a leader in immunochemistry, driven by its highly successful Elecsys immunochemistry product line, the fastest growing portfolio of Roche Diagnostics’ lab diagnostics business. By acquiring BioVeris, Roche will own the complete patent estate of the electrochemiluminescence (ECL) technology deployed in the Elecsys product line which gives Roche Diagnostics the opportunity to fully exploit the entire immunochemistry market.

Severin Schwan, CEO Division Roche Diagnostics, said: ‘ECL is a highly innovative technology. In comparison with other detection technologies ECL offers distinct advantages such as enhanced sensitivity, short incubation times and broad measuring ranges. This acquisition ensures that Roche will be able to provide unrestricted access to all customers and therefore represents a significant growth opportunity for our immunochemistry business.’

Samuel J. Wohlstadter, Chairman and CEO of BioVeris, said: ‘We are pleased that this transaction will deliver substantial value to BioVeris shareholders. Given the history between the parties and the scope of Roche’s existing diagnostics business, Roche is the natural buyer for BioVeris. We look forward to working with our colleagues at Roche to facilitate a timely close and orderly integration.’
The boards of directors of BioVeris and Roche have each unanimously approved the terms of the merger agreement, and the board of directors of BioVeris has recommended that its shareholders approve the transaction. Samuel J. Wohlstadter, Chairman and Chief Executive Officer of BioVeris, has entered into a voting agreement with Roche pursuant to which he has agreed to vote all of his shares, representing approximately 20% of the shares of BioVeris entitled to vote, in favour of the transaction. The transaction is subject to the approval of BioVeris’s shareholders, receipt of certain regulatory approvals and other customary closing conditions. Subject to satisfaction of these conditions, it is expected that the transaction will be closed during the third quarter of 2007.

In connection with Roche’s acquisition of BioVeris, BioVeris will sell to two newly formed entities established by Samuel J. Wohlstadter certain assets related to its vaccine research and the development of certain instruments intended for point-of-care use. The sale of these assets to affiliates of Samuel J. Wohlstadter has been approved by a special committee of the independent directors of the board of BioVeris.

Lehman Brothers is serving as financial advisor to BioVeris and also provided a fairness opinion. Houlihan Lokey Howard & Zukin is serving as financial advisor to the Special Committee of independent directors of BioVeris’s board and provided a fairness opinion regarding the sale of certain BioVeris assets to Samuel J. Wohlstadter. Skadden, Arps, Slate, Meagher & Flom LLP is serving as BioVeris’s legal counsel. Davis Polk & Wardwell and Foley & Lardner LLP are serving as Roche’s legal counsel.

About Roche’s Immunochemistry business
At 5.7 billion US, Immunochemistry is the largest lab diagnostic segment and growing at more than double clinical chemistry. In 2006, Roche’s immunochemistry business grew by 13%, significantly outpacing the market. Up till now Roche’s strategy has been to focus on leveraging the value of the Elecsys immunochemistry technology in the human diagnostics market. However an increasing number of Roche’s in-vitro diagnostics customers are expanding their business into the area of clinical trials. The market for clinical trials of close to 400 million Swiss francs is growing at approximately 10% per annum, driven by both the increasing number of clinical trials and the larger numbers of patients enrolled in these trials. The acquisition of BioVeris will allow Roche Diagnostics to participate in this growing market segment.


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