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NEWS OF THE WEEK
BUSINESS
May 7, 2001
Volume 79, Number 19
CENEAR 79 19 pp. 12
ISSN 0009-2347

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VERTEX TO BUY TECHNOLOGY FIRM
Aurora Biosciences acquisition will help create integrated drug developer

ANN THAYER

Vertex Pharmaceuticals will acquire Aurora Biosciences, San Diego, in a stock deal valued at $592 million. The deal will combine Aurora's early-stage target and drug identification technologies with Vertex's drug discovery and development capabilities.

"Our businesses are remarkably complementary," Vertex Chairman and CEO Joshua Boger says, "and we see this as the basis for growth." He believes the acquisition will accelerate discovery efforts, expand research into new gene families, and extend its base of commercial partnerships.

For Aurora, the linkage will extend its reach further down the drug development value chain. Aurora's focus, primarily as a technology developer, has been on collaborative R&D. Its assay development work and ultra-high-throughput screening platform have been licensed or sold to more than 20 leading drug producers.

The new company will have several hundred drug targets, 12 drug candidates, and more than 25 external alliances, including relationships with 11 of the world's top 12 pharmaceutical firms. Its goal by 2005 is to have 10 new chemical entities in development each year, providing the opportunity for two to three new drug candidates annually from 2005 through 2010.

Vertex is paying $24.34 per share, a 44% premium on Aurora's recent stock price, but still is getting a good deal. Just nine months ago, Aurora's stock was trading near $100 per share and then started a steady decline as investors became disenchanted with technology stocks. Current low stock prices for biotechnology companies and a difficult capital market are contributing to the buzz that deals such as this one are marking the beginning of a consolidation trend.

THE NEW VERTEX AT A GLANCE
Headquarters: Cambridge, Mass.
Revenues: $142 milliona
Net Loss: $34.3 millionb
Employees: 825
Business: Assay development, screening, and cell biology capabilities for analyzing gene targets; small-moleculedrug discovery based on chemogenomics platform; one marketed product, an HIV inhibitor, Agenerase
a Includes revenues from Vertex of $78 million and from Aurora of $64 million. b Includes $40 million loss by Vertex and $5.7 million net earnings from Aurora Biosciences. NOTE: Figures are for 2000, except for employees, which is as of March 2001.



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