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The centaur and the whale
The Chiron Corporation acquires Cetus in a stock transaction worth $660 million. The biotech giants are next-door neighbors in Emeryville, California. As part of the deal, Hoffmann-La Roche agrees to pay $300 million plus royalties for Cetus’s polymerase chain reaction technology (PCR). Chiron’s Vice Chairman and CEO, Edward Penhoet, will serve as chief executive of the new entity. Cetus President Hollings Renton will take a place on the board and act as chief consultant for Chiron’s cancer drugs. The terms of the merger give Cetus shareholders one-third of the merged company and Chiron shareholders two-thirds. An acquisition became almost inevitable for Cetus when the company failed to obtain FDA approval for its cancer drug, Proleukin (a recombinant version of interleukin-2), after eight years of expenditures on the project.
While the merger marks the end of an era in Bay Area biotechnology, the research underway at Cetus will survive. All involved parties expect that Cetus’ drug candidates will be carried to the marketplace in Chiron’s capable hands. Cetus Chairman and CEO Ronald E. Cape somberly expresses the hope: “If I were to tell you that I stand here exhilarated, you’d know I wouldn’t be telling the truth. However, we couldn’t have found a better partner. We couldn’t have found a better home.”