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Genentech completes Tanox acquisition

Genentech says the waiting period under the Hart-Scott-Rodino Act has expired allowing it to complete its acquisition of Tanox, approved by Tanox shareholders back in January 2007

Genentech has revealed that the waiting period under the Hart-Scott-Rodino Act has expired allowing it to complete its acquisition of Tanox, approved by Tanox shareholders back in January 2007.

Under the terms of the agreement announced in November 2006, Tanox stockholders are entitled to receive USD 20.00 in cash per share of common stock held at closing, for a total cash value of approximately USD 919m. The funds are being provided from Genentech's cash chest.

Shares of Tanox common stock are no longer being traded on the NASDAQ Global Market, as a result of the deal completion.

Since 1996, Genentech, Tanox and Novartis have collaborated on the development and commercialisation of the asthma drug, Xolair (omalizumab). Now the Tanox purchase is complete, Genentech will no longer pay royalties on sales of the drug to Tanox and also obtains Novartis' profit share and royalty payments.

Xolair racked up sales of USD 120m in Q2 FY07, compared with USD 105m in Q2 FY06. The drug label now contains a new alert, drawing attention to anaphylaxis as a potential side effect. The company was ordered by the FDA in February 2007 to add the strongest warning possible, following anaphylaxis reports associated with the drug.

David Ebersman, executive vice-president and CFO at Genentech, said: "We are pleased with the closing of this important transaction which will provide us with improved profitability on Xolair. We will continue to work with our collaborator Novartis to advance potential new indications and formulations of Xolair."

2nd August 2007

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