Stonebridge Technology Associates Advises Taconic Farms, Inc. on Purchase of Controlling Interest in Artemis Pharmaceuticals GmbH

November 20, 2007 - Stonebridge Technology Associates announced today that it acted as exclusive financial advisor to Taconic Farms, Inc. (“Taconic”), a leading provider of research animal models and laboratory services, in its purchase of a controlling interest in Artemis Pharmaceuticals GmbH (“Artemis”) from Exelixis, Inc. (NASD: EXEL).

Client Background

Hudson, N.Y.-based Taconic is one of the world’s premier suppliers of rodent animal models for research and laboratory purposes, and provides a full range of related services to the biomedical research community. Founded in 1952 and originally focused on traditional animal models, the Company’s current offerings include not only a full catalog of animal models, including over 50 transgenic lines; but also contract breeding services; animal testing and surgical services; transgenic products and services, including genotyping and cryopreservation; GMP production of murine-based bio-products; and distribution, licensing, and research study programs. From its roots in the Hudson River Valley, the Company has steadily expanded its footprint over the years, and now serves customers worldwide from seven breeding facilities and three laboratories across the U.S. and Europe with a staff of over 800. Throughout its history, Taconic has been committed to ensuring superb quality, reliable availability, and technically innovative solutions in support of its customers’ in vivo research programs in the pharmaceutical, biotechnology, and academic sectors.

Transaction Rationale

Founded in 1998 and owned by Exelixis since 2001, Cologne, Germany-based Artemis Pharmaceuticals is a leading provider of genetically engineered mice models (GEMMs). Artemis’ products are based on a proprietary platform of novel animal model generation techniques, including advanced targeting, injection, and gene switching technologies. Through this platform, Artemis is able to offer the research community rapid generation of genetically-modified research models designed for their specific research purposes, reducing clinical study timeframes and costs and improving research outcomes. In 2005, Taconic and Artemis had established a strategic relationship aimed at furthering access to Artemis’ technology in the research community by combining Artemis’ GEMMs model generation capability with Taconic’s industry-leading marketing and distribution capabilities. In the culmination of this successful partnership, the greater integration of the two companies was achieved by Taconic’s purchase of an 80% stake in Artemis, allowing the synergies realized in the initial alliance to be greatly enhanced. Exelixis also retained a meaningful minority share in the transaction. Through the acquisition of Artemis, Taconic is now uniquely positioned to offer the worldwide research community a comprehensive animal model solution, encompassing genetically-modified model generation, breeding, testing, and delivery services. The transaction also significantly strengthens Taconic’s presence in Europe, and is consistent with the Company’s long-standing commitment to growth through technical innovation and appropriate strategic partnerships. The new venture will operate as TaconicArtemis GmbH. 

Stonebridge Role

During the past several years, Stonebridge has maintained an advisory relationship with Taconic, a family-owned, privately held entity. Over this period, Stonebridge has provided a variety of transactional and strategic advisory services to Taconic, and thus was uniquely positioned to assist Taconic as the Company began contemplating a potential acquisition of Artemis. In the course of the transaction, Stonebridge provided assistance in the valuation of Artemis, transaction structure, and the management of a complex acquisition process involving multiple advisory teams dealing with cross-border legal, financial, and diligence issues. 

About Stonebridge Technology Associates

Stonebridge Technology Associates, a division of Stonebridge Associates, LLC, specializes in providing merger and acquisition advisory and capital raising services to healthcare, medical device and service, software, hardware, Internet, and other technology product and service companies. Stonebridge Associates, LLC is a FINRA-registered investment banking firm that provides creative solutions to middle market and emerging growth companies in mergers and acquisitions, private placements of debt and equity securities, fairness opinions, and other strategic and financial advisory assignments. To learn more about Stonebridge, please visit our website at www.stonebrtech.com.