Novartis AG is no longer actively pursuing U.S. medical diagnostic-testing company Gen-Probe Inc., meaning Gen-Probe could end its sales process without a buyer, people familiar with the matter said.
Novartis appeared to be the only potential suitor left after other bidders, including Life Technologies Corp. and Thermo Fisher Scientific Inc., dropped out of the race for Gen-Probe last month, these people said.
That meant Novartis, the Swiss health-care giant, was less motivated as a potential buyer because it didn't face competition for Gen-Probe, which is based in San Diego and sells tests for AIDS and other sexually transmitted diseases, these people added.
Novartis, which has a partnership with Gen-Probe, was seen as keen on keeping Gen-Probe out of others' hands, the people familiar with the matter said. Another bidder may emerge and the sales process is ongoing, other people familiar with the matter said.
A Gen-Probe spokesman declined to comment.
In a phone interview Tuesday, Novartis chief executive Joe Jimenez declined to comment on whether Novartis had shown interest in Gen-Probe. Referring to acquisitions in general, he said: "We're going to remain disciplined acquirers. We've got to make sure we're not overpaying for assets."
"We've got a significant amount of debt. While we want bolt-ons that will boost our scale and presence" in Novartis' areas of business, "we're going to be sure we're disciplined in ensuring that value will be created for Novartis shareholders," Mr. Jimenez said.
Gen-Probe shares had run up substantially since news of the auction surfaced this spring, and its stock peaked above $86 per share in mid-May. The shares traded at $70 before news of the auction process leaked in April.
But since The Wall Street Journal reported in June that Novartis was the only bidder left for Gen-Probe, the shares have fallen and were trading Tuesday monring at $64.03 per share, giving it a market capitalization of about $3.1 billion.
Spokespeople for Novartis and the other, past bidders either declined to comment or couldn't immediately be reached.
People close to the auction process have said Gen-Probe was seeking a price in the mid-80s per share or higher, but a number of bidders balked at such a valuation. It is unlikely that any of those bidders will reemerge unless the asking price falls to a number they find attractive, the people familiar said.
Medical diagnostic companies have recently been popular targets for health-care companies looking for new avenues of growth. Thermo Fisher in May agreed to buy closely held allergy-testing company Phadia AB for $3.5 billion. Danaher Corp. earlier agreed to buy Beckman Coulter, another medical-testing outfit, for $5.8 billion.
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