Exelixis to Buy Software Shop Genomica

The all-stock deal would give the biotech company software it can use for drug development.
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Biotech firm


(EXEL) - Get Report

said late Monday that it is acquiring troubled genomics software firm


(GNOM) - Get Report

in an all-stock deal valued at about $110 million.

The deal is not all that noteworthy except for the fire-sale price, which reflects the tough times for companies that have tried to parlay the excitement about the human genome into a viable business model. Genomica, which sells software to analyze genes, went public in March but never really made a dent in the market. Last month the company announced a major restructuring, including layoffs, due to slowing sales.

Exelixis, which is trying to use genetic information to develop its own drugs, is essentially buying Genomica for a little less than the cash Genomica has on hand -- $110.8 million as of Sept. 30.

The biotech firm did not offer specifics of the transaction, but it seems to be valuing Genomica at $4.49 a share, based on the $110 million deal value and the 24.5 million shares, fully diluted, which Genomica has outstanding.

The purchase price represents a premium of nearly 33% over Genomica's shares, which closed higher Monday, up 20 cents, or 6.3%, at $3.38. For its third quarter, Genomica reported losing $5.9 million, or 26 cents a share, on revenue of $385,000.

Exelixis CEO George Scangos said the company will use the Genomica software for internal use to further accelerate its own drug development programs. Most of the approximately 50 employees still working at Genomica will probably not join the combined company, Scangos added.

Exelixis shares closed Monday up 24 cents, or 1.6%, at $15.24.