Novartis' appetite for deals is expected to grow in the near future, but the Swiss drug giant ($NVS) may no longer be interested in gobbling up diagnostic test provider Gen-Probe.
After speculation that Novartis' interest in Gen-Probe had waned, sources with knowledge of the deal told the Wall Street Journal that the drug company was no longer seeking a buyout of the San Diego-based diagnostic test maker. The news yesterday put a dent in Gen-Probe's stock price, which fell 2.47% to $62.41 per share.
Novartis drops out of the picture as a likely buyer of Gen-Probe--which makes diagnostic tests for HIV and other infectious diseases--after the drug maker's CEO Joe Jimenez revealed earlier this month that his company's first priority before seeking more deals is to pay down $22 billion in debt. Yet the pharma chief has been vocal about his interest in potential buyouts of diagnostic companies as the firm seeks new ways to grow its revenue stream.
Sources have said that the Gen-Probe deal might have become too rich for some of its potential suitors, with a price tag of more than $3 billion. And Life Technologies and Thermo Fisher Scientific were already scratched as suitors for Gen-Probe before Novartis lost interest. Yet the WSJ reported that Gen-Probe's sales process continues and another potential bidder could pop onto the radar.