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BRISTOL-MYERS SQUIBB DIVESTING GENETIC SYSTEMS TO SANOFI

Executive Summary

BRISTOL-MYERS SQUIBB DIVESTING GENETIC SYSTEMS TO SANOFI "for an undisclosed amount of cash," Bristol-Myers Squibb announced April 19. Bristol-Myers acquired Seattle-based Genetic Systems and the biotech firm's holding in the Oncogen joint venture with Syntex for about $300 mil. in stock just weeks after Lilly's successful bid for Hybritech in the fall of 1985. Bristol-Myers later worked out an agreement with Syntex -- the third partner in the Oncogen joint venture -- to acquire all of the cancer R&D venture in early 1986. Sanofi is acquiring only the diagnostics portion of the biotech subsidiary. Genetic Systems' leading product is an in vitro test for AIDS. Sanofi has been a regular presence in the mergers and acquisition rumour mill since the French company's unsuccessful bid for A.H. Robins in late 1987. Genetic System will give Sanofi a much-desired foothold in the U.S. on which to build a U.S. presence. Bristol-Myers Squibb has already set up Oncogen as an internal research subsidiary and spliced into it "all non-diagnostic research activities that were part of Genetic Systems." A Bristol-Myers Squibb press release notes that Oncogen "will remain an important part of the newly restructured Bristol-Myers Squibb Pharmaceutical Research Institute." An Oncogen-developed AIDS vaccine is currently in clinical trials and the research subsidiary is also involved "in a variety of other projects, including development of monoclonal antibodies and growth factors for use in cancer treatment," Bristol-Myers Squibb noted." Genetic Systems was founded in 1980 to commercialize monoclonal antibody technology. The company was taken public in 1983 by then-Chairman Robert Nowinski and venture capitalists Isaac and David Blech. Nowinski, who had stayed with Genetic Systems after the merger with Bristol-Myers, resigned last September to pursue business interests in the Seattle area, according to Bristol-Myers Squibb. Another former Genetic Systems exec, George Todaro, MD, currently heads Oncogen and is a member of the operating committee of the Bristol-Myers Squibb Pharmaceutical Research Institute ("The Pink Sheet" March 26, T&G-9).
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