Ventana hits back at Roche's 'inadequate' offer

The unsolicited offer by Roche for histopathology instrument and reagent manufacturer Ventana marked Roche's desire to push the use of diagnostic tissue tests for predicting patient response to anticancer therapies that would have given the pharmaceutical giant a competitive edge in the oncology market.

This fact was not lost on Ventana's chairman, Jack Schuler, who replied to Roche's aggressive open letter in kind, writing: "Roche is attempting to obtain for itself unique strategic value and synergies that we believe would accrue to the broader pharmaceutical industry and Ventana's stockholders over the near and long term."

Roche's letter of intent to buy was surprisingly frank and combative in nature, and Ventana's response is equally strongly worded and highlights Ventana's "serious concern that, to some significant extent, your interest in our company may be based upon confidential information shared with you or your affiliates".

Ventana's board of directors unanimously determined the $75 per share bid was "inadequate in multiple respects and contrary to the best interests of Ventana's stockholders" and advised them not to tender their shares to Roche.

Indeed, in Ventana's open response the company's CEO, Christopher Gleeson, writes: "Roche's offer does not come close to adequately compensating Ventana stockholders for the accelerating momentum of our business… and the Company's growing menu of differentiated, high-value diagnostics that are expected to deliver on the promise of personalised medicine."

Roche has been very active of late, licensing a Phase I arthritis drug from Toyama Chemical for $370m to bolster its already strong drug development pipeline as well as the acquisitions of antibody specialist THP and vaccine technology expert BioVeris.

In addition, the Swiss firm has acquired microarray expert NimbleGen and next-generation gene sequencer manufacturer 454 Life Sciences to add to its strengths in diagnostics.

The acquisition of Ventana would put Roche in a considerable position of strength in the diagnostics market, however Ventana believes that the 45 per cent premium on the share price does not compare favourably to the 143 per cent premium paid for its competitor Vision Systems by Danaher.

Since the offer, Ventana's shares have been trading at over $80 a share and Landsbanki Kepler analyst, Denise Anderson believes that if Ventana provides information to support a higher valuation Roche would be willing to consider negotiations.

She continued by telling LabTechnologist that Ventana would be a nice addition to Roche's portfolio, but not at any price.

According to Anderson: "the hostile communication tone leaves questions about clear next steps especially keeping in mind the 'poison pill' and the fact that no other bidders have come forward."