Ebb & Flow

When Artemis was launched in 1997 as a German sister company toExelixis,there was some question as to whether it made sense to have two related companies in the animal model space - other than as financing vehicles. That question has now been answered, as the companies announced last week that EXEL will absorb the 85% of Artemis it does not already own in a stock acquisition that values the remaining portion at $25.3 million and gives Artemis an overall valuation of $29.7 million. EXEL added $0.17 last week to $12.15.

While Artemis harbored hopes of becoming an independently listed European company on a pan-European exchange, CEO Peter Stadler had told BioCentury at the company's founding that a merger three years down the line might make a lot of sense (see BioCentury, Dec. 8, 1997).

"It is something that has been planned for some time," said Patrick Weber, CEO of International Biomedicine Partners, a shareholder in both companies who supported the merger. He argued the combined company will be better positioned to serve its pharma clients with a broad range of discovery services. The deal combines EXEL's comparative genomics and model system genetics platforms with Artemis' vertebrate model genetic systems.

Glen Sato, CFO and vice president of legal affairs at EXEL, said the deal was not done because Artemis was running low on cash. The German company had $6 million in cash, enough to get it well into 2002, he said.

Nevertheless, Sato acknowledged that Artemis was at a point where its technology infrastructure would require a "different level of investment, and that Exelixis' access to the markets had a big influence" on the decision to merge.

Artemis spent about $4.7 million last year, thanks in part to "favorable government support" in the form of

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