The deal has been implemented to improve the development of the drug Xolair a treatment for allergic asthma. Genentech and Tanox have been working together in collaboration with Novartis since 1996 to manufacture the product.
Upon the closing of the acquisition, Genentech said it intends to improve its financial results for Xolair by eliminating the royalty it currently pays to Tanox. Genentech will also obtain Novartis’ profit share and royalty payments and will acquire Tanox’s product pipeline.
“This acquisition will help us improve our profitability from Xolair,” said Arthur Levinson, CEO of Genentech. “We are also excited by molecules in the Tanox pipeline being developed to potentially treat diseases including asthma, HIV, and age-related macular degeneration,” Levinson added.
Genentech and Tanox said they would be reviewing current operations and possible opportunities at Genentech for Tanox’s employees in the coming months. The deal is expected to be completed by the end of the first quarter of 2007.