HOUSTON (CNI)--Biotech firms Aurora Biosciences and PanVera announced Friday they had agreed to merge in an all-stock transaction worth $86m that would expand Aurora's drug discovery capabilities and strengthen its product pipeline.
Under terms of the deal, Aurora will acquire all of PanVera's outstanding common shares in a tax-free transaction that will be accounted for using the pooling-of-interests method.
PanVera stockholders will receive approximately 1.34 shares of Aurora common for each share of PanVera common.
Shares of Aurora Biosciences were trading up 50 cent/share to $45.81 at midday.
Stuart Collinson, Aurora's chairman, said the acquisition of PanVera is strategically important for Aurora in several ways including substantially broadening and extending the company's ability to provide innovative solutions for protein drug targets.
He added: "This combination will establish a strong sales and marketing infrastructure to commercialise our proprietary bioassay technologies. PanVera's expertise in protein expression and purification will provide protein drug targets that are an important component of the Big Biology program, Aurora's target-based drug discovery initiative.
Aurora said it believes that PanVera's future revenue growth rate will be at least in line with Aurora's future growth rate, based on Wall Street forecasts for Aurora's revenues. Aurora expects the transaction to be accretive in 2001.
Aurora Biosciences of San Diego, California designs, develops and commercialises advanced drug discovery technologies, services and systems to accelerate the discovery of new medicines.
Based in Madison, Wisconsin, PanVera is a biotechnology company engaged in manufacturing and marketing protein drug targets and drug screening assays for high throughput screening.