(Adds CFO interview, analyst comments, byline, updates stock)
By Debra Sherman
CHICAGO, Sept 5 (Reuters) - Ventana Medical Systems Inc. VMSI.O, the subject of a hostile tender offer from Swiss drug maker Roche Holding AG ROG.VX, said on Wednesday it acquired Spring BioScience Corp. for $28.9 million in cash, a deal Ventana expects to boost its 2008 and 2009 earnings.
The acquisition of Spring BioScience, which develops and supplies monoclonal antibodies derived from rabbits, is yet another in the field of medical diagnostics as the sector continues to consolidate despite a credit crunch.
Privately held Spring BioScience will expand Ventana’s footprint in the emerging area of so-called personalized medicine, whereby treatments are tailored to the individual patient based upon genetic makeup.
Ventana makes diagnostic equipment used in the fast-growing oncology and infectious disease specialties.
In a telephone interview, Ventana Chief Financial Officer Larry Mehren said management began talks with Spring BioScience about a year ago, after it was outbid trying to buy another company that develops antibodies.
“We’re very discipline, and we didn’t want to overpay, so we started looking around for another antibody company to purchase ... that was long before Roche (launched its bid),” Mehren said.
He said the deal will boost earnings, adding that Ventana has the financial wherewithal to pursue more acquisitions.
Ventana forecast 2008 earnings of $1.91 to $2.01 per share on revenue of $377 million to $392 million. Its previous outlook was for profit of $1.86 to $1.96 per share on revenue of $370 million to $385 million.
The company also raised its forecast for 2009, calling for earnings of $2.71 to $2.85 per share on revenue of $480 million to $500 million. Ventana had previously said it expected profit of $2.62 to $2.76 per share on revenue of $470 million to $490 million.
“We plan to grow organically and inorganically, as appropriate,” he said.
He declined to discuss the Roche offer, but noted that just 13,430 shares had been tendered as of Aug. 21, which was the deadline of an extension by Roche. Roche needs some 18 million shares to acquire the company.
Ventana’s board of directors unanimously rejected the Roche offer, calling the price inadequate. Last month, Roche extended the expiration of its $3 billion hostile tender offer to buy Ventana until Sept. 20.
“They’ve got a long way to go,” Mehren said.
Alex Morozov, an analyst with Morningstar, said he didn’t believe the acquisition of Spring BioScience would help or hurt Roche’s prospects.
“I think what Ventana is signaling here is that it continues to operate its business as usual. They’re saying, ‘Please ignore this Roche offer. We are an independent company.’”
Ventana shares dipped 42 cents to $81.76 in afternoon Nasdaq trade. They have traded between $36.77 and $88 during the past 52 weeks, hitting their high earlier this summer, when Roche launched the offer.
((Additional reporting by Tenzin Pema in Bangalore))
(Editing by Lisa Von Ahn/Jeffrey Benkoe; Reuters Messaging: email@example.com; debra. firstname.lastname@example.org, 1-312-408-8134)) Keywords: VENTANA OUTLOOK/
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