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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
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Washington,
D.C. 20549
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SCHEDULE
TO
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(RULE
14d-100)
Tender
Offer Statement Pursuant to Section 14(d)(1) or 13(e)(1)
of
the
Securities Exchange Act of 1934
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VENTANA
MEDICAL SYSTEMS, INC.
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(Name
of Subject Company)
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ROCKET
ACQUISITION CORPORATION
ROCHE
HOLDING LTD
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(Names
of Filing Persons – Offeror)
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COMMON
STOCK, PAR VALUE $0.001 PER SHARE
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(Title
of Class of Securities)
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92276H106
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(Cusip
Number of Class of Securities)
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Beat
Kraehenmann
Roche
Holding Ltd
Grenzacherstrasse
124
CH-4070
Basel
Switzerland
Telephone:
+41-61-688-1111
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(Name,
Address and Telephone Number of Person Authorized to Receive
Notices
and
Communications on Behalf of Filing Persons)
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Copies
to:
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Christopher
Mayer
Davis
Polk & Wardwell
450
Lexington Avenue
New
York, New York 10017
Telephone:
(212) 450-4000
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Check
the appropriate boxes below to designate any transactions to which
the
statement relates:
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Check
the following box if the filing is a final amendment reporting the
results
of the tender offer. o
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Operator:
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Good
morning and good afternoon. This is the Chorus Call Conference Operator.
Welcome to the Conference Call on “Roche’s Tender Offer for
Ventana”.
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As
a
reminder, all participants are in listen-only mode and the Conference
is
being recorded. After the presentation, there will be an opportunity
for
you to ask questions. Should anyone need assistance during the Conference
Call, they may signal an Operator by pressing “*” and “0” on your
telephone.
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At
this time, you are joining to the Conference room with Dr. Erich
Hunziker,
Deputy Head of the Corporate Executive Committee and CFO. Please
go ahead
Sir.
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Erich
Hunziker:
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Thank
you very much. Good afternoon Ladies and Gentlemen. Thanks for joining
our
Conference Call to discuss our offer to acquire Ventana for US Dollars
75
per share in cash.
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Together
with Severin Schwan, CEO Division Roche Diagnostics, Robert
Yates, Head of Business Development Diagnostics, Steve (unintelligible),
Head, Corporate Business Development, Karl Mahler, Head of Investors
Relations and key members of our team, we look forward to give you
our
comments on this - this intended strategic
move.
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After
the presentation, we will be pleased to answer your questions. Bill
Burns,
the CEO, Roche Pharma, sends his regards and invited me to tell you
that
Roche Pharma is excited and very supportive of this important
transaction.
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The
presentation enhancing Roche’s position as the world - world’s leading
fully integrated Personalized Healthcare Company, which we released
last
night will form the background of our comments. We will always make
a
reference to the page number when commenting. So, let me start with
an
overview and lets turn to page 4.
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Roche
Group, a Leading Global Healthcare Company. This chart summarizes
our
position at the end of 2006 as a world leader in oncology, transplantation
and hepatitis on the Pharma side as well as our leadership position
in
In-Vitro Diagnostics and
Biotechnology.
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Page
5. Differentiation through Personalized Healthcare; Most of you know
that
our strategic growth map, Roche 2015 has clearly identified constant
innovation as the core competent and also the core challenge of all
our
activities.
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Medically
differentiated product and services as well as patient tailored treatment,
so called Personalized Healthcare are and will continue to be the
key
drivers of our thinking and action.
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Page
7. Strengthening our position as a leading, full-integrated, Personalized
Healthcare Company by making Ventana a member of the Roche Group,
we can
close the gap in the field of the fast growing Tissue Diagnostics
market
with attractive prof-
profitability.
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And
with this, I handover to Severin Schwan, CEO Roche
Diagnostics.
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Severin
Schwan:
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Thank
you Erich. Ladies and Gentlemen, I’m excited to give you more explanation
on the Ventana acquisition and the potential it offers to both Ventana
and
Roche.
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If
we turn to page 9, you can see that Ventana is a leader in the
Tissue-Based Diagnostics, which is particularly important in the
field of
oncology. As for the financials, we have seen a very good growth
over the
last years and healthy operating
margin.
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Now
let me on page 10, lead you through the histology workflow on a high
lever
because you can see many of the benefits of combining the Roche and
- and
Ventana capabilities on that slide. Now, actually typically, the
tissue
would first be prepared, if you take the tissue its moist, it has
to be
fixrated, it has to be sliced and put on - on - on a slide, before
then
the pathology - pathologist would look at the tissue, at the structure,
the morphology of the tissue under the
microscope.
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To
better see the structure he will do a primary staining, for example,
with
eosin and then for a certain subset of samples he will do a much
more
detailed analysis, which is called advanced staining and what he
actually
do in the advanced staining is that you look at molecular targets
that is
RNA, DNA or proteins in the tissue. The two technologies, which are
applied (at the moment is the Immunohistochemistry and in situ
hybridization).
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Now,
afterwards, the sample is - can be further analyzed by - by automated
image pattern recognition and digitally stored. Now, what you can
see from
this workflow is really two things.
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First
of all, this is still a fairly complex, semi-manual process and we
think
that we can add value here from the Roche side by bringing in the
skills
and work flow management in IT which should further drive automation
in
this segment.
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And
secondly, perhaps even more important, you can see that in the advanced
staining, molecular biology plays a major role in this process and
we feel
that with our distinct capabilities in molecular bio- biology across
the
Roche Group, not only in Pharma, but also in Diagnostics, if I think
about
the genomics and applied science and our leadership in molecular
diagnostics, our leading position in immunology, we think that we
can
really combine our capabilities here and I will come back to this
in more
detail.
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If
we turn to page 11, histopathology is the segment of about 1 billion
US
Dollars and we estimate this to grow double digit as we go forward,
on the
one hand because there is a high need for test automation and
standardization in this field. The recent increasing incidence of
cancer
and as Erich has pointed out, targeted cancer drugs are increasingly
requiring companion diagnostics.
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If
you turn to page 12, you can see that Ventana is the clear market
leader
in the advanced staining segment and has a particularly strong position
in
the US and that complements very well with Roche who is the market
leader
in In-Vitro Diagnostics on a worldwide basis, and is particularly
strong
outside of the US that we then can combine our two
organizations.
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Let
me now turn to page 13 and elaborate in a bit more detail on - on
the
oncology process. I have already referred to the capabilities of
Roche in
molecular biology, but if it comes to oncology, we offer a wide range
of
tumor markers, in particular for screening and therapy monitoring,
and
those tests are typically are serum
based.
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However,
for the therapy selection what you need is Tissue-Based tests to
achieve
the necessary sensitivity and specificity to really then tailor the
therapy. Herceptin is a good example of such a
test.
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Now
those Tissue-Based tests are either designed to find the marker in
situ,
that is in the tissue itself by immunohistochemistry or in situ
hybridization or the marker is extracted from the tissue for a further
analysis before the therapy is
applied.
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And
you can see on slide 14, how the two companies fit better, their
technology capabilities provide a comprehensive solution for the
pathologist where Ventana on the one hand can apply their capabilities
on
tests which are done directly on the tissue, and Roche can apply
its
different technologies to analyze the tissue after extraction such
as
molecular diagnostics or
immunology.
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If
we then turn to page 15, you can see how the two companies together
are
then able to provide a comprehensive in-house solution for our pharma
division to better develop targeted medicines and you can see here
listed
in a high level format the various projects which we have ongoing
in the
oncology pipeline in Roche in late development and in early
development.
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If
you turn to page 16, you can see that the plan to keep Ventana as
a
separate business unit headquartered in Tucson, Arizona. We believe
that
Ventana has an excellent team and we want to build on the momentum
and the
success this team has achieved.
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So
in summary on page 17, we are convinced that the two companies together
are very well positioned to further drive a more personalized and
targeted
Healthcare approach. With this I hand it over to
Erich.
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Erich
Hunziker:
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Thank
you Severin. Let’s turn to chart 19: The Transaction
Financials.
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This
chart summarizes all the information we gave you last night. The
US Dollar
75 per share in cash for each outstanding share of Ventana after
transaction valued at around US Dollar 3
billion.
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We
will comment a tender offer after rete- repeated attempts to engage
Ventana management in discussions for a negotiated
offer.
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As
our Chairman and CEO, Franz Humer has repeated today several times,
we are
still open for a negotiated solution. The offer is fully financed
and we
see no significant regulatory
impeachments.
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We
offer a substantial and attractive premium for a world-class Company,
as
you can see on this and the next chart with all the various - various
premiums y- you can need looking
back.
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The
offer conditions include that:
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A.
(And) Majority of Ventana share of common stock on a fully diluted
basis
are tendered into Roche’s offers.
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And
B. That Ventana’s Board takes all necessary action to makes its
shareholder rights plan inappl- (ap)plicable to Roche’s
offer.
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Turning
to page 21: Timing Next Steps.
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We
have a clear plan to move ahead. We will proptly - promptly comment
the
tender offer to purchase all of the outstanding common stock of
Ventana.
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We
will comment the regulatory process immediately and the offer will
be
subject to the customary conditions I just mentioned when I discussed
the
last chart.
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Page
22: Transaction Financials, The
Summary.
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As
discussed, Roche offers US Dollar 75 in cash per share representing
an
attractive value to Ventana’s stockholder. Roche is committed to maintain
as Severin has just indicated, the headquarter and operations in
Tucson,
Arizona and to further invest into the business, and here I clearly
wanna
stress that we are not selling this deal by cost senergin -
synergies.
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Ventana
has built up an excellent team and we consider this core for the
future
success. Of course, the integration into a leading Hi-tech Healthcare
Company will have excellent implications for
Ventana.
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As
Severin pointed out, Ventana is strong in the US; Roche has a clear
record
of success to also be a leader in markets outside the
US.
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At
very conservative synergy assumptions, the deal will be accretive
to
operating profit IBI- EBIT within the next 2 to 3 years and to Core
EPS
within 4 years.
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The
dilution to Core EPS prior to this will be marginal and the intended
transaction is very significant, but it does not affect Roche’s ability to
further - to make further strategic moves to strengthen our position
as a
leading Hi-tech Healthcare Company.
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Before
we com- conclude and come to your questions, you may ask yourself
why
Roche see a certain urgency for this deal. Lead- Leaving Ventana’s
successful team unchanged and giving them the support of a global
company
could be very crucial in a time when key competitors in this market
are
still aligning their efforts after just having been taken
over.
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We
are of course prepared for long discussions, but a quick negotiated
solution would have clear benefits for everybody involved, and with
this
we are ready to answer your
questions.
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Q&A
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Operator:
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Excuse
me, this is the Chorus Call Conference Operator. We will now begin
the
“Question & Answer” Session.
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Anyone
who wishes to ask a question may press * and 1 on their touchtone
telephone. If you change your mind and wish to remove yourself from
the
question queue, then you may press * and
2.
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Anyone
who wishes to ask a question may press * and 1 at this
time.
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Operator:
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The
first question is from Mr. John Murphy, Goldman Sachs. Please go
ahead
Sir.
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John
Murphy:
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Yes,
good afternoon Gentlemen. Could you talk a little bit more about
in an
ideal situation, what the structure of the diagnostics business would
look
like?
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I
mean, you mentioned the word integration, you talked about synergies,
but
can you maybe compare and contrast if for example with how your
pharmaceutical relationship exists today with Genentech and
Chugai?
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Severin
Schwan:
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Okay.
This is Severin.
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Now
in diagnostics, we are currently organized around four business areas:
Applied Science, Molecular Diagnostics, Professional Diagnostics
and
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Diabetes
Care and we intend to keep Ventana as a separate dedicated business
unit.
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So,
we are not planning to integrate the functions across the other business
areas, but - but work on the synergies in a more elaborative
way.
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I
mean, if you talk about the synergies I do not see any synergies
here on
the cost side, but it is very much driven by the synergies we have
on the
R&D side, by the development of targeted medicines and then on the
commercialization, if we bring those products to the market on a
worldwide
basis.
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John
Murphy:
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Okay.
Thanks very much.
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Erich
Hunziker:
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Thanks.
And can we have the next question,
please?
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Operator:
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The
next question is from Mr. Peter Lawson, Weisel Partners. Please go
ahead
Sir.
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Peter
Lawson:
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Hi.
I counted four acquisitions in the last four months by Roche, what’s been
driving that aggressive spree of
acquisitions?
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Erich
Hunziker:
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Well
Roche I think has always had a strategy of taking targeted acquisitions
to
compliment the existing field and if you look at - at the acquisitions
over the recent months in - in the diagnostics field it’s 454 Life
Sciences, NimbleGen or BioVeris, then each of these acquisitions
has been
very, very targeted and represent the building blocks to organically
develop our existing business.
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I
think there is no change in strategy, that has always been the Roche
strategy and you can be assured that in parallel we are constantly
also
making deals on the Pharma side, but most of them (unintelligible)
may be
licensing deals or corporation deals, we were just releasing actually
one
of them yesterday.
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So,
it’s not that we have switched as a Group just focus on one of the
divisions, but it happened (there) to be that in one of the divisions
it
was more the acquisition, maybe this is also
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reflected
- reflecting the climate in the diagnostic field (mere) more than
actually
in the Pharma field where still traditional partnership or licensing
deals
can be done to actually bring innovation into our
Group.
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Peter
Lawson:
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That,
do you think that diagnostic group is done for acquisitions, you
have to
kind of consolidate these, or do you think there’s other things you need
to add?
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Erich
Hunziker:
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Well,
I mean, science never stands still, there will always be new technologies
arising in this field. This is a fast moving dynamic environment,
and as
such, we will keep our eyes open and screen the market, and if another
opportunity should arise we will seize
it.
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Peter
Lawson:
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Okay.
Thank you so much.
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Erich
Hunziker:
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You’re
welcome. Can we have the next question
please?
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Operator:
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The
next question is from Ms. Liz Mitchell
Mainfirst. Please go ahead
Madam.
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Liz
Mitchell:
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Hello,
this is Liz Mitchell, pro- probably (out to hear). I had a couple
of
questions.
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First
of all, why is it that you’re not enhancing to EBIT? In year 1, it’s a
profitable company, at least you are paying a lot of - a very high
finance
fees to your banks.
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Secondly,
could you talk a little bit about Ventana’s pipeline, I know you have a
graph of the areas they could be working on that - that - that tether
in
with Roche, this is your graph number
15.
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But
could you talk a litte- a little bit more about this - these
early development programs and which - which one we maybe could see
first?
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Severin
Schwan:
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Okay.
(If I had to say) I can take the second question on - on the
pipeline.
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First
of all, this is the Ventana acquisition; of course we would inherit
the
current portfolio of Ventana, which is a substantial business in
itself
and which is a business, which is profitable, and - and highly
growing.
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As
to slide number 15, in fact what we do here is that we already have
programs running on these various - various products in the Roche
Oncology
pipeline.
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In
fact, for every single Pharma product, which is sent into the pipeline,
the Biomarker research and the development of potentially companion
diagnostics is a standard part of the development
process.
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The
- the - the hurdle which we have to overcome, if it comes to tissue
based
testing is that we do not have the platform out there in the market
and we
do not yet have the - the same strong internal position. That is
where
Ventana’s capabilities come into the
game.
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But
I think that the - the answer to your question is that in fact for
every
single product which goes through the Roche pipeline, we look for
potential Biomarkers and if there is a good scientific hypothesis
then we
work on this, and we want to work on this in a very broad sense leveraging
all available technologies.
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Erich
Hunziker:
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And
you see now we’re coming into your EBIT
question.
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Of
course, Ventana as an independent company is very profitable, has
at least
operating profit situation like Roche Diagnostics but in such an
acquisition accounting of course you have to give the cash we put
into
this deal, and we don’t need any bank financing and so you may know or not
know that Roche has very significant net cash
position.
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So,
we will just finance this by our own cash, but of course, you have
to give
this cash you use for the deal a certain value and - and to - and
it
will…
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Liz
Mitchell:
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EBIT
is the full interest cost?
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Erich
Hunziker:
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Sorry.
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Liz
Mitchell:
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EBIT
is the full interest cost?
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Erich
Hunziker:
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Okay.
Amortization of intangibles will be the counter balance which actually
will - will work against it and we are not clear in a sense of course,
we
have assumptions in our model, how much of this acquisition will
be
intangibles and how much will be goodwill and you have to have a
line for
the amortization of - of actually the
intangibles.
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Liz
Mitchell:
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Can
you give me some help on how much that will
be?
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Erich
Hunziker:
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No.
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Liz
Mitchell:
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Okay.
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Erich
Hunziker:
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Not
at this moment, sorry.
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Liz
Mitchell:
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Can
I ask another very quick question, sorry to be a big time but on
slide 12
you give the amount of share of Ventana in advanced
staining.
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Could
you tell me is that a share of new sales you know, like of the -
the
synergy or your source of that share of orders, was that share of
installed base and could you c- give also a little comment on what
the
installed base of Ventana is, you know, like how strong they are
in terms
of proportion of labs, with one of these
machines?
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Erich
Hunziker:
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I
wouldn’t comment on the inste- installed base of - of instruments of
Ventana but the shares, which you see on slide 12 reflect the - the
market
2006.
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Liz
Mitchell:
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So,
that’s new sales new orders, okay, thank you very
much.
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Severin
Schwan:
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So,
that’s some value here.
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Erich
Hunziker:
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You
are welcome; can we have the next question
please?
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Operator:
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The
next question is from Ms. Joe Walton, Lehman Brothers. Please go
ahead
Madam.
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Joe
Walton:
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Good
afternoon, good morning.
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I
apologize I miss the beginning of this call. So, you may have answered
or
you may have dealt with this
before.
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Have
you ever had a commercial relationship with Ventana? How long have
you
been trying to negotiate a purchase and I’m not entirely clear what it -
y- what the nub of what you require is? Is it their intellectual
property
and so you are just late or haven’t had this technology or is it their
installed base?
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The
fact that they have these machines there means that, you know,
realistically, even if you did work yourself, it would be very difficult
to get to the same position because doctors have all or hospitals
have
already taken these units.
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And
I notice that DAKO has broadly speaking the same market share in
advanced
staining as Ventana. Is there anything that is better about Ventana
then
DAKO, they seem to have roughly equivalent sales in this key
technology?
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Erich
Hunziker:
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So,
maybe I can take the history of - of our contacts. This is all documented
show and you can load it down in the press release, you have every
single
step and I am not going to repeat, but we have tried for about for
5
months to engage into a friendly
process.
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And
as I said at the end of our presentation, we see a certain urgency
to move
ahead with this transaction because it can be a competitive adv-
competitive advantage and I am sure Severin, you can take the whole
issues
of rest of the question.
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Severin
Schwan:
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So,
what are we actually interested in about your question? I think Ventana
gives Roche a number of - of - of benefits and I would like to emphasize
the one on the development of new tests where we as a diagnostics
can then
provides a better and much more comprehensive portfolio of technologies
to
- to Pharma.
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Now,
also what - what we have seen is that it is an advantage if you can
provide this comprehensive range of technologies to develop the product
in
- and to do this at a very early stage of - of the development process,
which tends to be easier if you have all these capabilities
in-house.
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Of
course, Ventana for us also means that we get access to the markets,
to
the installed base out there, and it is an attractive segment we
can
eventually participate in.
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As
to your question with DAKO, it is true DAKO has also a very strong
position; it’s the second player in this market with a stronger position
actually outside of the US.
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We
believe that Ventana has a particular strong position also in the
instrumentation and I have outlined earlier how important automation
is
for the pathologists because today this is still a very manual or
semi
manual process and we believe Ventana has particular strengths here
and
they have gained market share over the past
years.
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Erich
Hunziker:
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Does
this - does this answer your question,
Joe?
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Joe
Walton:
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Yes,
you – you’ve not tried or you’ve not in the past done any joint ventures
with them, you don’t have any interesting commercial relationship with
them?
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Erich
Hunziker:
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We
don’t have joint ventures with them, but we have been working together
with Ventana, also with DAKO and for reference there is also a
collaboration between Ventana and Genentech and that will
continue.
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Joe
Walton:
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Thank
you.
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Erich
Hunziker:
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Thanks
and can we have the next question
please?
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Operator:
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The
next question is from Mr. Mark Paulson, Deutsche Bank. Please go
ahead
Sir.
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Mark
Paulson:
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Yeah,
thanks very much, just a follow up to Joe’s
question.
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So,
if my understanding is correct, i- it’s really to try and gai- gain so
faster access to technologies, which is the reason why you’ve bought, or
you are looking to try to acquire Ventana rather than partnering
with
them.
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Just
trying (unintelligible) to get a little bit of more color in terms
of the
reason why you are acquiring rather than
partnering?
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Secondly,
in terms of, could you describe the targets beyond
HER 1, HER 2 HER 3, I guess HER 2
HER 3 ratio could be seen as interesting and how you could gain
competitive advantages in these additional
targets?
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And
then lastly, could you give me some flavor as to how far away we
are from
using tissue-based diagnostics in areas outside
oncology?
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Severin
Schwan:
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Okay,
now just to - to reemphasize again, it is not just simply the access
of
the technology, the real value is then that we can leverage the different
capabilities across the entire Roche Group in Pharma with a deeper
understanding of the disease pathways, their biotechnology know-how,
its
(unintelligible) molecular biology understanding on the diagnostic
side,
also in genomics and in proteomics that we hopefully can make more
out of
this technology.
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I
think that is what makes it so attractive for both Companies Ventana
and
Roche, that we are not simply collecting technologies here and we
have
access to the technology.
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|
The
whole benefit is that we make something more out of bringing it to
together and as such provide a good diagnostic service for Pharma
to
develop targeted medicine.
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And
that is equally true for parameters, which - which you mentioned
in terms
of Herceptin and that - that will - that will also apply for other
parameters and targets. We have been working on already in-house
and where
we will then match the capabilities we get with Ventana. I think
your
third question was on…?
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Mark
Paulson:
|
Tissue
based outside oncology?
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Severin
Schwan:
|
Yeah,
from a disease point of view, it is clearly that the
area their tissue based testing is most important because with oncology
and - and if you have solid tumors then it - it is very likely from
a
scientific point of view that you have more sensitivity and more
spefe-
specificity by testing directly in the tissue and that is very specific
to
oncology.
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|
So,
I see that the - the - the main benefit of tissue based testing in
particular in this area.
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Mark
Paulson:
|
Thank
you. Could you describe to just help me a little bit further as well?
I
guess one of the advantages is speed to gaining knowledge than
intellectual property around a particular test and linking into a
pharmaceutical, could
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|
you
describe how that would differ between just partnering with a company
like
Ventana or - and actually acquiring the company? How much easy
it is to
generate IPM protection around particular technologies, targets
and then
therapeutics?
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Severin
Schwan:
|
Right.
I mean it is - it is just easier to - to combine and make something
out of
it if you have the things in-house, then if you have to manage those
technologies, those capabilities in a - in a looser way. So, we -
we
believe that by - by leveraging the synergies within diagnostics
and
leveraging the capabilities across the Group, we - we can make something
more out of it than simply partnering with a third party
Company.
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Erich
Hunziker:
|
And
you see there is a clear difference with regard to intellectual property.
We all agree that the earlier you start, the exchange of ideas between
Pharma’s research and Diagnostics, the better you have a chance to
actually come in parallel with the development of companion Diagnostics
or
the interaction, but at this stage in the research discussions, may
be not
even all of the intellectual property is already
protected.
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Mark
Carter:
|
Sure
okay, thank you, Gentlemen.
|
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Erich
Hunziker:
|
You
are welcome. Can we have the next question
please?
|
|
Operator:
|
The
next question is from Mr. Karl Cox, Vontobel. Please go ahead
Sir.
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|
Karl
Cox:
|
Good
afternoon Gentlemen. Thanks for taking my question. I just wondered
whether you see any potential for top-line synergies in the near
to
medium-term, and if so, have you included that into your breakeven
analysis?
|
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|
And
secondly, on the potential integration costs, apart from amortization
charges, do you expect any inventory step up
costs?
|
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Severin
Schwan:
|
Now,
on the - on the top-line it is really about bringing out better solution
for the customers, new better (texts) and -
and medicines, rather than having synergies with the existing
portfolios.
|
|
|
What
you also have to see is that even though it’s all In-Vitro Diagnostics,
the customer segments are slightly different, and the Tissue-Based
testing
is very much geared towards the pathologists and as such there are
certainly synergies in the sense that we can use our standing, our
brands
and our infrastructure outside of the US, but I see most of the synergy
by
actually developing better medicines as we develop the - the Pharma
pipeline and - and the diagnostic
tests.
|
|
|
In
terms of the integration costs, we - we intend to keep Ventana as
a
dedicated separate Business Unit and there is no intention to move
location or to - to - to change the set up. So I - I wouldn’t expect major
costs on that side. On the contrary, we will take investments and
further
grow this business in particular outside of the
US.
|
|
Erich
Hunziker:
|
May
be there is also an opportunity to address all the people who are
listening in from Ventana. I think it’s worth for you to go back into the
history of Roche’s acquisition over the last 20 years and you will see
whichever group was integrated actually into the Roche Group has
actually
prospered.
|
|
|
If
you look at how (unintelligible) has grown up, if you look at how
Genentech has developed. So I think this company has a culture of
respecting winners and to get them actually to support to actually
become
better. So, can we have the next question
please?
|
|
Operator:
|
The
next question is from Mr. Les Levy, ICAP. Please go ahead
Sir.
|
|
Les
Levy:
|
Yes
hi, how are you? I was curious about the - the terms of the deal
itself;
it is a hostile tender offer. So, you are going to have to basically
negate their shareholder rise plan, they are going to
effectuate a poison pill. Their
officers and directors also have over 21% of the shares
outstanding.
|
|
|
How
do you envision this deal is really going forward without their approval
and acquiescence in this
transaction?
|
|
Erich
Hunziker:
|
Okay.
I mean, that’s an obvious question and as you have seen and as you have
heard, there are two ways for this. Of course, we are not running
into
anything without being very clearly informed, I mean you have seen
who are
our legal and our financial advisors and I think we have a top crew
consulting us and you can be assured that for both ways there - the
- the
- what we call their friendly negotiated deal, but also their long
discussions deal as I’ve mentioned.
|
|
|
We
have clear roadmaps, clear plans to develop together with our advisors,
but I also beg your respect that I’m not going to speculate here in public
now how we are tackling things, specially we are
also very careful and we are looking forward to Ventana’s board meeting,
and we will of course listen very carefully to what conclusions Ventana’s
Board will come and we’ll respect their answer, and then decide actually
what is the best action and best way to go
forward.
|
|
|
Can
we have the next question please?
|
|
Operator:
|
The
next question is from Mr. Bruce Cranna. Leerink Swann Please go ahead
Sir.
|
|
Bruce
Cranna:
|
Hi,
good morning. I guess the first question is do you, does Roche own
any
Ventana shares at present?
|
|
Erich
Hunziker:
|
I
hand this question to the project
leader.
|
|
(Moderator):
|
Yes.
We - we have purchased a small amount of shares against standing
out
shareholders, but it is an insignificant
amount.
|
|
Bruce
Cranna:
|
And
- and (just so I ‘m clear), the advantage of Ventana over
DAKO or I guess for that matter Vision Systems which
was on the block if you will recently, the advantage of Ventana as
you see
it is really geographic versus those - those other two
players?
|
|
Erich
Hunziker:
|
Severin,
do you want to take this.
|
|
Severin
Schwan:
|
Well
Ventana has indeed a strong position in the US and we feel it has
a very
strong portfolio of - of -
of products.
|
|
Bruce
Cranna:
|
So
you just see it as a superior asset in this
space?
|
|
Severin
Schwan:
|
Yes.
|
|
Bruce
Cranna:
|
And
lastly, this is a bit of a detail oriented question, but thinking
about
HPV and your intellectual property portfolio in HPV, do you think
if you
would acquire Ventana, that it would thereby render a Diging suit
against
Ventana, is academic, in other words, you - you have clear rights
to the
property that those two are disagreeing
over?
|
|
(Severin
Schwan):
|
I
wouldn’t comment on this question.
|
|
Bruce
Cranna:
|
Okay.
Thank you.
|
|
Erich
Hunziker:
|
You’re
welcome. Can we have the next question
please?
|
|
Operator:
|
The
next question is from Ms. Angela Woodall, DIBC. Please go
ahead Madam.
|
|
Erich
Hunziker:
|
Hello?
|
|
Operator:
|
Ms.
Woodall, your line is open.
|
|
Angela
Woodall:
|
I
actually don’t have a question. I’m sorry about
that.
|
|
Erich
Hunziker:
|
That’s
fine. Okay, can we have the next question
please?
|
|
Operator:
|
The
next question is from Mr. John Wood, Banc of America Securities.
Please go
ahead Sir.
|
|
John
Wood:
|
Thank
you. Is there a concern that Ventana’s status, as a captive of Roche would
harm its ability to enter into companion diagnostics partnerships
with
other pharmaceutical companies? I know they work
with Novartis and
M-clone already, and like we - we would like you
perspective on that?
|
|
Severin
Schwan:
|
No
I
do not see this at all. If you look at Roche Diagnostics also, we
today
offer our services to other Pharma companies, in fact even to other
players
|
|
|
in
the Diagnostics Industry and then the Life Science Industry. What
other
companies are looking for is the best service they can get, this
is what
they are interested in.
|
|
|
They
want the best product to have cutting edge research to develop their
product to help them. And we have seen that the lot of companies
has
approached Roche Diagnostics because we provide comprehensive solutions
that is what is distinct - what - what - what differs us from other
companies and that is what - what those partners in Pharma, also
outside
of - of Roche Pharma and in - in - in Life Science or Diagnostic
Industry
are looking for.
|
|
|
So,
in other words, I see it exactly the other way around, with portfolio
and
the capabilities we can integrate into the overall Roche diagnostics
portfolio. We do not only get a much stronger partner for our own
Pharma
operations, but we also get a much much stronger partner for other
Pharma
companies who we can provide our services with. I think that is the
decisive point that you can actually provide better services, better
products and that is what these partners are looking
for.
|
|
John
Wood:
|
Thank
you.
|
|
Erich
Hunziker:
|
You
are welcome. Can we have the next question,
please?
|
|
Operator:
|
The
next question is from Ms. Gabriella Mitchell, Putnam Investments.
Please
go ahead Madam.
|
|
Gabriella
Mitchell:
|
I’m
sorry. I have no question.
|
|
Erich
Hunziker:
|
Okay.
Can we have the next question,
please?
|
|
Operator:
|
We
have a follow-up question from Ms. Joe Walton, Lehman Brothers. Please
go
ahead Madam.
|
|
Joe
Walton:
|
Given
that you have a history of companies joining your family, and you
have
Genentech partly owned, you have
Chugai partly owned. Is this
an all or nothing transaction or would it be possible to end up with
- is
this family concept in diagnostics?
|
|
|
I
-
I believe you said earlier that one of the problems was, if you -
if you
are not really part of the family, you don’t want to share your inner most
|
|
|
secrets,
but you certainly seems to be able to do that with Genentech and
Chugai,
couldn’t you do that here?
|
|
|
I
would like - would like to give you the benefit of being able to
incentivise the Ventana people just to the success of Ventana rather
than
just give them straight cash?
|
|
Erich
Hunziker:
|
I
am
very pleased Joe that you really are such a good marketeer of our
culture
and our strategy and that’s of course exactly what we have offered them
about two months ago in a written form, but we cannot
comment.
|
|
|
The
only thing is that they have rejected this offer to have exactly
a
Genentech like structure and we - we have offered them to keep them
listed
and to give them ind- independence, but of course, we have also made
it
clear to become a member of the Roche Group, the condition is that
we
control at least 50.1 percentage points because then you control
the
intellectual property.
|
|
Severin
Schwan:
|
And
if may a- may add here that there has absolutely been an alternative
as
Erich pointed out, but I would also like to stress again also to
the
Ventana employees who are listening into this Call, that we have
in
diagnostics also a model that we even though we - we own 100% of
- of a
Company and even though it is not listed anymore, it has a very
decentralized style of leading those companies and I think the best
example for life Sciences that we kept the headquarters in the
US.
|
|
|
This
Company is led by the CEO and - and the former CEO who is also now
the CEO
after the acquisition and it’s - it is led in a very independent way and
the same actually is the case with our another recent acquisition
in the
field of research with NimbleGen where we apply exactly the same
model.
|
|
|
So
yes, Genentech and Chugai is one way to leave our rather decentralized
management approach, but we have shown in diagnostics that we can
also -
that we can also leave this model with a 100%
ownership.
|
|
Joe
Walton:
|
Thank
you.
|
|
Erich
Hunziker:
|
Okay,
so can we have the next question
please?
|
|
Operator:
|
Once
again to ask a question, please press “*” and “1” on your telephone, “*”
and “1”.
|
|
Erich
Hunziker:
|
So,
Okay.
|
|
Operator:
|
Mr.
Hunziker, there are no more questions at this
time.
|
|
Erich
Hunziker:
|
Okay.
Ladies and Gentlemen I thank you very much for the interest you have
shown
in this Conference Call and I hope that we were able to bring importance
in the strategic dimension of this important transaction across.
Thank you
very much and hope to talk to you at the half-year’s results.
Good-bye.
|
|
Operator:
|
Ladies
and Gentlemen the Conference Call is now concluded, and you may disconnect
your telephone. Thank you very much for joining, and have a pleasant
day.
Good by.
|
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-
END -
|