Affymetrix Signs Agreement to Acquire ParAllele BioScience
May 31 2005 - 5:29PM
PR Newswire (US)
Affymetrix Signs Agreement to Acquire ParAllele BioScience SANTA
CLARA, Calif., May 31 /PRNewswire-FirstCall/ -- Affymetrix Inc.
(NASDAQ:AFFX) announced today that it has entered into a definitive
agreement to acquire ParAllele BioScience Inc., a privately held,
South San Francisco- based company that provides assay technology
for comprehensive genetic studies. Initially applied to genotyping,
these highly flexible assays have the potential to be used in a
broad variety of microarray applications. When used with Affymetrix
GeneChip(R) technology, ParAllele's proprietary assay effectively
gives researchers a powerful "molecular microscope" for examining
the entire genome. Together these technologies offer scientists the
ability to perform detailed analysis from several to tens of
thousands of different sites in the genome, giving them the freedom
to design virtually any experiment they want. This acquisition
builds on a successful two-year collaboration between Affymetrix
and ParAllele that has enabled scientists to access more genomic
information, in less time, and for less money, than ever before. By
acquiring ParAllele, Affymetrix expects to strengthen its assay
R&D capabilities, accelerate its development and
commercialization of new products, and drive sales by opening new
market opportunities. "Together, Affymetrix and ParAllele have
enabled new areas of science by offering products to explore the
whole genome, as well as specific regions of interest," said
Stephen P.A. Fodor, Ph.D., Founder, Chairman and Chief Executive
Officer of Affymetrix. "The potential for ParAllele's technology
goes far beyond genotyping. We will combine both companies'
technologies to accelerate discovery and product development in a
wide variety of areas, from basic research to the clinic." "This is
an exciting step for ParAllele. Affymetrix has been a vital
collaborative partner in helping bring our proprietary technology
to market," said Tom Willis, Ph.D., Chief Scientific Officer and
co-founder of ParAllele. "As one company, our customers will be
able to take advantage of the most complete view of the genome
possible with an expanded portfolio of integrated solutions." A key
component of ParAllele's technology is its proprietary Molecular
Inversion Probe (MIP) assay. The MIP design allows up to tens of
thousands of reactions to be multiplexed in a single tube with a
high degree of accuracy and specificity. When combined with an
Affymetrix GeneChip universal tag array, MIP technology provides
scientists with unprecedented access to any area of the genome.
This proven technology has been used successfully in the
International Human Haplotype Mapping (HapMap) Project. Affymetrix
is paying approximately $120 million to acquire ParAllele, subject
to certain adjustments, including changes in ParAllele's working
capital prior to closing. The merger consideration is intended to
be paid in Affymetrix stock. The transaction is expected to close
in the third quarter of 2005, subject to customary closing
conditions and regulatory approvals. As a result of the
transaction, for fiscal 2005, Affymetrix expects to incur a
merger-related charge for in-process research and development of
approximately $15 million as well as operational charges in the
range of $4 million to $7 million. These operational charges
include non-cash amortization of about $2 million. The company
expects this transaction to be financially neutral to its operating
results in 2006 and accretive to net income in 2007. Affymetrix
will provide its financial guidance for the third quarter and
fiscal year 2005 during the second quarter earnings call which is
scheduled for July 21, 2005 at 2:00 p.m. PT. Affymetrix will
provide dial-in information for this call by July 16, 2005.
Investor Conference Call Affymetrix' management team will host a
conference call on May 31 at 2:00 p.m. PT to discuss this
announcement. A live webcast of the conference call can be accessed
by visiting the Investor Relations section of the company's website
at http://www.affymetrix.com/. In addition, investors and other
interested parties can listen by dialing domestic: 888-396-2369,
international: 617-847-8710. The passcode for both is 59311756. A
replay of the conference call will be available starting on June 1,
2005 at 5:00 p.m. PT until June 8, 2005 at the following numbers:
domestic: 888-286-8010, international: 617-801-6888; passcode for
both: 88962518. About Affymetrix Affymetrix scientists invented the
world's first microarray in 1989 and began selling the first
commercial microarray in 1994. Since then, Affymetrix GeneChip(R)
technology has become the industry standard in molecular biology
research. Affymetrix technology is used by the world's top
pharmaceutical, diagnostic and biotechnology companies as well as
leading academic, government and not-for-profit research
institutes. More than 1,200 systems have been shipped around the
world and more than 3,000 peer-reviewed papers have been published
using the technology. Affymetrix' patented photolithographic
manufacturing process provides the most information capacity
available today on an array, enabling researchers to use a
whole-genome approach to analyze the relationship between genetics
and health. Headquartered in Santa Clara, Calif., Affymetrix has
subsidiaries in Europe and Asia in addition to manufacturing
facilities in Sacramento, Calif. and Bedford, Mass. The company has
about 900 employees worldwide. For more information about
Affymetrix, please visit the company's website at
http://www.affymetrix.com/. About ParAllele BioScience: ParAllele
BioScience is accelerating healthcare breakthroughs by providing
comprehensive genetic discovery solutions to the life science
research, pharmaceutical and diagnostic sectors. The company's
products and services utilize a unique approach that leverages
novel biochemical processes rather than complex instrumentation to
discover and analyze minute variations in the human genome. The
understanding of how subtle genetic variations contribute to
disease risk, prognosis and drug response will lead to new and more
effective drugs, predictive diagnosis, and the ability to better
tailor therapies to individual patients. To date, ParAllele has
established research collaborations with multiple large
pharmaceutical companies and prestigious academic and government
institutions. Headquartered in South San Francisco, California,
ParAllele BioScience was founded by a team of leading researchers
from the Stanford Genome Technology Center and Uppsala University.
The company's investors include Abingworth Management, Index
Ventures, Mohr Davidow Ventures and Versant Ventures. For more
information about ParAllele, please visit the company's website at
http://www.parallelebio.com/. All statements in this press release
that are not historical are "forward-looking statements" within the
meaning of Section 21E of the Securities Exchange Act as amended,
including statements regarding Affymetrix' "expectations,"
"beliefs," "hopes," "intentions," "strategies," or the like. Such
statements, including Affymetrix' expectation that the transaction
is expected to close in the third quarter of 2005, Affymetrix'
financial expectations and Affymetrix' expectations that the
transaction will accelerate product development and
commercialization and drive microarray sales, are subject to risks
and uncertainties that could cause actual results to differ
materially for Affymetrix from those projected. These risks and
uncertainties include, but are not limited to: (i) the possibility
that the companies may be unable to obtain regulatory approvals
required for the merger; (ii) the inability of Affymetrix to
successfully integrate ParAllele's business into its existing
business in a timely and non-disruptive manner; (iii) the inability
of Affymetrix to achieve expected synergies from the transaction,
including revenue synergies; (iv) difficulty in retaining
ParAllele's employees following the transaction; (v) unexpected
costs and charges associated with the acquisition, including the
write-off of intangible assets; (vi) the possibility of an adverse
impact to Affymetrix' and ParAllele's businesses as a result of
uncertainty surrounding the acquisition; and (vii) other risks
described in Affymetrix' Form 10-K for the year ended December 31,
2004 and other SEC reports, including its Quarterly Reports on Form
10-Q for subsequent quarterly periods. Affymetrix expressly
disclaims any obligation or undertaking to release publicly any
updates or revisions to any forward- looking statements contained
herein to reflect any change in Affymetrix' expectations with
regard thereto or any change in events, conditions, or
circumstances on which any such statements are based. Important
Information For ParAllele Investors And Shareholders Affymetrix
will file a registration statement on Form S-4 containing a
prospectus with the SEC in connection with its proposed acquisition
of ParAllele. Affymetrix urges ParAllele's investors and
shareholders to read these documents when they become available and
any other relevant documents filed with the SEC because they will
contain important information. Investors and shareholders will be
able to obtain these documents free of charge at the website
maintained by the SEC at http://www.sec.gov/. In addition,
documents filed with the SEC by Affymetrix are available free of
charge by contacting Affymetrix, Inc., 3380 Central Expressway,
Santa Clara, California 95051, Attention: Investor Relations,
phone: 408-731-5000. NOTE: Affymetrix, the Affymetrix logo, and
GeneChip are registered trademarks owned or used by Affymetrix Inc.
DATASOURCE: Affymetrix, Inc. CONTACT: investors, Doug Farrell, Vice
President, Investor Relations, +1-408-731-5285, or media, Wes
Conard, Director, Public Relations, +1-408-731-5791, both of
Affymetrix, Inc. Web site: http://www.affymetrix.com/
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