Genentech acquires Xolair partner Tanox
Genentech has agreed to acquire its Xolair co-marketer, the Houston-based biotech firm Tanox, in a deal worth $919 million.
The deal is the first-ever acquisition agreement in Genentech’s 30-year history and just the latest example of the rash of biotech purchases made by pharma companies and large biotechs in recent weeks.
Over $16 billion has been spent on such agreements in the past two months, The Wall Street Journal reported.
“It looks like the party is going to continue for a while, when even Genentech steps up,” Geoffrey Porges, and analyst with Sanford C. Bernstein & Co. told The Journal.
Genentech worked with Tanox and Novartis to develop the allergic asthma drug Xolair.
As a result of the deal, Genentech will hold on to Tanox’s share of Xolair-related royalties, and other payments – approximately 8%-12% of Xolair’s net sales. US sales of Xolair totaled $107 million in the third quarter.
Tanox also has several promising drug candidates in development, including an AIDS drug designed to prevent HIV from entering cells. However, the deal primarily aims to improve Genentech’s return on sales of Xolair, Genentech CFO David Ebersman said.