SAN DIEGO, Oct. 22 Gen-Probe (Nasdaq: GPRO) announced today that the Company has completed its acquisition of Prodesse, Inc., a leader in molecular testing for influenza and other infectious diseases, for approximately $60 million in cash.
Gen-Probe's purchase price could increase to up to $85 million if Prodesse achieves certain financial and regulatory milestones in 2010 and 2011.
"We are delighted to complete this acquisition ahead of schedule and welcome Prodesse's employees to Gen-Probe," said Carl Hull, Gen-Probe's president and chief operating officer. "Prodesse has had great success introducing clinically differentiated assays for infectious diseases, including influenza, and we believe our global commercial infrastructure will both facilitate and accelerate their next stage of growth."
Gen-Probe financed the transaction with cash on its balance sheet.
The Company expects to record, under US GAAP, charges for non-recurring cash and non-cash costs related to the acquisition. The magnitude of these charges will not be determined, under the rules of purchase accounting, until an independent, third party valuation has been completed to allocate the purchase price to the assets and liabilities acquired. The Company has therefore not yet provided GAAP financial guidance regarding the transaction. In addition, transaction-related professional fees will be expensed as incurred, under the rules of SFAS 141R.
Excluding the charges discussed above, and on a non-GAAP basis, Gen-Probe expects the acquisition to add approximately $0.05 to the Company's 2010 earnings per share (EPS), based on approximately $15 million in total revenues. Gen-Probe expects to update its 2009 financial guidance to include the effects of the acquisition in its third quarter earnings release on October 29.
Prodesse develops molecular diagnostic reagents for a variety of infectious disease applications. Prodesse sells three FDA 510(k) cleared products in the United States, and two additional CE-marked products in Europe. The company's products can be used in conjunction with various nucleic acid extraction and real-time PCR (polymerase chain reaction) platforms, including Cepheid's SmartCyclerŽ II System.
Prodesse's ProFlu+(TM) test was cleared by the U.S. Food and Drug Administration (FDA) in January 2008 for the detection and discrimination of Influenza A Virus, Influenza B Virus and Respiratory Syncytial Virus. It is the only commercially available, FDA-cleared molecular test for these respiratory viruses that uses real-time PCR technology. Test results can be obtained in as little as three hours using the assay - a significant improvement over culture-based methods. During a public health emergency, this speed to result and the high sensitivity of molecular tests can make important contributions to effective infection control efforts.
Prodesse also sells FDA-approved, real-time PCR assays for the clinical diagnosis of Clostridium difficile (C. diff), a bacteria that is the most serious cause of antibiotic-associated diarrhea, and human metapneumovirus, a common cause of lower respiratory infection in children.
Gen-Probe Incorporated is a global leader in the development, manufacture and marketing of rapid, accurate and cost-effective nucleic acid tests (NATs) that are used primarily to diagnose human diseases and screen donated human blood. Gen-Probe has more than 25 years of NAT expertise, and received the 2004 National Medal of Technology, America's highest honor for technological innovation, for developing NAT assays for blood screening. Gen-Probe is headquartered in San Diego and employs approximately 1,200 people. For more information, go to www.gen-probe.com.
About Non-GAAP Financial Measures
This announcement contains certain financial measures that are not calculated in accordance with GAAP, including non-GAAP EPS. Non-GAAP EPS excludes all non-cash charges such as intangible amortization and stock compensation expense, as well as transaction expenses. Gen-Probe's management believes these U.S. non-GAAP financial measures provide investors meaningful supplemental information regarding the expected financial results of the acquisition.
Caution Regarding Forward-Looking Statements
Any statements in this news release relating to Gen-Probe's expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and are forward-looking statements. These statements are often, but not always, made through the use of words or phrases such as believe, will, expect, anticipate, estimate, intend, plan and would. For example, statements concerning the expected benefits of the acquisition and expected financial results are all forward-looking statements. Forward-looking statements are not guarantees of performance. They involve known and unknown risks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to differ materially from those expressed or implied. Some of these risks, uncertainties and assumptions include but are not limited to: (i) the risk that Gen-Probe will not successfully integrate Prodesse or achieve expected strategic or financial benefits, (ii) the risk that facts relating to Prodesse that may affect strategic and other benefits of the acquisition may be unknown to Gen-Probe, and (iii) the risk that Gen-Probe may not achieve its expected 2009 or 2010 growth, revenue, earnings or other financial targets that are assumed in its accretion analysis. The foregoing list sets forth some, but not all, of the factors that could affect the Company's ability to achieve results described in any forward-looking statements. For additional information about risks and uncertainties Gen-Probe faces and a discussion of its financial statements and footnotes, see documents filed with the SEC, including the most recent annual report on Form 10-K and all subsequent periodic reports. Gen-Probe assumes no obligation and expressly disclaims any duty to update forward-looking statements to reflect events or circumstances after the date of this news release or to reflect the occurrence of subsequent events.
Contact: Michael Watts Vice president, investor relations and corporate communications 858-410-8673
SOURCE Gen-Probe Incorporated