EXHIBIT 99.5
(VIROLOGIC LOGO) (ACLARA LOGO)
CONTACTS: Karen Wilson, CFO, ViroLogic
FOR IMMEDIATE RELEASE (650) 624-4164
JUNE 1, 2004 kwilson@virologic.com
Alfred Merriweather, CFO,
ACLARA
(650) 210-1200
invrel@aclara.com
VIROLOGIC AND ACLARA BIOSCIENCES ANNOUNCE MERGER
-- Creates Leader in Personalized Medicine Focused on Oncology and Infectious
Diseases --
-- Conference call to review details at 10:00 a.m. EDT today --
SOUTH SAN FRANCISCO AND MOUNTAIN VIEW, CALIF., June 1, 2004 -- ViroLogic,
Inc., (Nasdaq: VLGC) and ACLARA BioSciences, Inc. (Nasdaq: ACLA) today
announced that they have entered into a definitive merger agreement to create
an industry-leading company to develop and commercialize advanced molecular
diagnostics for personalized medicine focused on oncology and infectious
diseases.
The combined company will leverage ViroLogic's commercial laboratory, patient
testing and pharmaceutical drug development business, and innovative technology
with ACLARA's proprietary molecular assay platform known as the eTag(TM) System.
With the benefit of technological and operational synergies and substantial
financial resources, the combined company will seek to rapidly exploit the large
emerging market opportunity for molecular testing for cancer and other serious
diseases.
Under the terms of the agreement, each outstanding share of ACLARA common stock
will be exchanged for 1.7 shares of ViroLogic common stock and 1.7 contingent
value rights (CVR). The common stock portion of the consideration equals $4.78
per share of ACLARA based on
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ViroLogic's closing price of $2.81 on May 28. In addition to receiving shares of
ViroLogic, the CVR provides for a potential cash payment of up to $0.50 per CVR
(equivalent to $0.85 per ACLARA share) depending on the ViroLogic stock price
twelve months following completion of the merger. After the closing of the
merger, ViroLogic expects to have approximately $75 million in cash, cash
equivalents and marketable securities net of estimated transaction and
integration costs prior to the effect of any payment that may be made under the
CVRs.
LEVERAGING POWERFUL PLATFORMS TO ADDRESS LARGE AND FAST GROWING MARKET FOR
TARGETED CANCER THERAPY
Building on its pioneering and leading position in the HIV field, ViroLogic is
merging with ACLARA in order to deliver technology and services for
pharmaceutical companies developing cancer therapeutics along with delivering
patient testing products and services to aid doctors in the treatment of cancer
patients.
"This merger provides what we believe is the most powerful new technology
platform to address the exploding field of targeted therapeutics and molecular
diagnostics for cancer," said William D. Young, CEO and chairman of ViroLogic,
who will continue as CEO and chairman of the newly merged company. "This strong
combination of capabilities and substantial financial resources will enable us
to leverage our experience and infrastructure to bring the benefits of
personalized medicine to the acute need in oncology. We have delivered hundreds
of thousands of complex individual molecular evaluations to HIV patients in the
last five years and we plan to leverage that expertise to bring expanded
products and services to disease areas that affect at least 10 times as many
patients. There are more than 1 million new cancer patients in the United States
each year, representing a very significant patient care and market opportunity."
"Joining forces with ViroLogic, the industry innovator and leader that helped
make personalized medicine a reality in HIV for patients, healthcare providers
and pharmaceutical companies will accelerate our ability to do the same thing
for cancer," said Thomas Klopack, ACLARA's CEO. "We see the treatment of cancer
developing in a similar fashion to that of HIV with potentially more effective
combination regimens facilitated by molecular testing. ViroLogic's proven
business model is a perfect fit with our aspiration to commercialize our
molecular oncology testing technology. ViroLogic's growing revenue stream and
established relationships with major
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pharmaceutical companies, payors and leading national distributors make them
ideally suited to commercialize products and services derived from our
proprietary eTag Systems. Combining with ViroLogic at this time eliminates the
need for ACLARA to spend resources on building a commercial infrastructure and
will accelerate the time-to-market for eTag products and services."
ViroLogic has built a highly sophisticated and efficient commercial
infrastructure to support the industry's most comprehensive line of drug
resistance tests, including PhenoSense(TM) HIV, GeneSeq(TM) and its novel
combination assay, PhenoSenseGT(TM). These tests are used in the management of
individuals with HIV and the development of new antiviral drugs for HIV and
hepatitis. Since it launched PhenoSense HIV four years ago, the company has
steadily increased revenues year over year while optimizing operations. Since
the company was founded in 1995, there have been over 300 presentations at the
major HIV meetings and publications in leading peer-review journals by ViroLogic
scientists and their collaborators using the company's proprietary technology.
ACLARA has developed the proprietary eTag System, a protein-based technology
that can be easily formatted to test biopsy-sized samples of patient tumors.
Importantly, this includes formalin-fixed paraffin-embedded tissue, the industry
standard for storing patient samples. Many different molecular markers in these
patient tissues can be quantified simultaneously, such as signaling proteins,
protein complexes and activated receptors. The eTag System is particularly well
suited for targeting the new molecular-based drugs being introduced for cancer.
This will allow drug companies and doctors to assess a patient's likelihood of
responding to a given therapy thereby facilitating more precise and effective
utilization of available therapeutic options. ACLARA has a growing list of
collaborations with academic institutions studying cancer and inflammation
disorders.
VIROLOGIC REAFFIRMS REVENUE GUIDANCE
ViroLogic is affirming full-year 2004 revenue guidance, before the inclusion of
ACLARA's revenues, of $42 million to $47 million, an increase of more than 25%
over 2003 revenues. Operating results for the merged business are expected to
benefit from the elimination of duplicate facilities and overhead costs and the
streamlining of laboratory, clinical and commercial infrastructure.
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BOARD AND ORGANIZATIONAL STRUCTURE
ViroLogic's board of directors will be expanded to include Tom Baruch and John
Mendlein, current members of ACLARA's board. Tom Klopack is expected to continue
in a consulting capacity with the Company after the transaction. The new company
will have approximately 250 employees following the close of the transaction.
All operations for the combined company will be headquartered in South San
Francisco, Calif., the current headquarters of ViroLogic. Operations at ACLARA's
Mountain View facilities are expected to be transitioned to South San Francisco
after completion of the merger.
TAX-FREE REORGANIZATION AND CONTINGENT VALUE RIGHTS (CVR) TERMS
The board of directors of both ViroLogic and ACLARA approved the definitive
merger agreement. The transaction, which is structured as a "tax-free"
reorganization, with respect to the shares of ViroLogic to be issued in the
transaction for federal income tax purposes, is subject to the approval of the
stockholders of both ViroLogic and ACLARA, as well as regulatory approvals and
satisfaction of other closing conditions. The directors and executive officers
of both ViroLogic and ACLARA have agreed to vote the shares owned by them in
favor of the merger. The transaction is expected to close by the fourth quarter
of 2004.
The maximum payment under the CVR would be $0.50 per CVR (equivalent to $0.85
per ACLARA share) if ViroLogic's stock price trades below an average price of
$2.40 per share during the 15 trading days immediately preceding the one-year
anniversary of the closing of the merger, declining ratably to $0.00 per CVR if
ViroLogic's stock averages $2.90 per share or higher during such time. The CVR
is expected to be registered on a national stock exchange. The stockholders of
ViroLogic will hold approximately 52% of the total shares of the new company and
stockholders of ACLARA will hold approximately 48% following the merger,
assuming conversion of ViroLogic's preferred stock, and exercise of all
ViroLogic warrants and ViroLogic and ACLARA stock options. Upon closing, the new
company will have approximately 115 million shares of common stock outstanding.
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Lazard Freres & Co. LLC acted as financial advisor to ViroLogic, and Cooley
Godward LLP provided legal counsel. Lehman Brothers Inc. acted as financial
advisor to ACLARA, and Latham & Watkins LLP provided legal counsel.
CONFERENCE CALL DETAILS
The companies will host a conference call today, June 1, 2004, at 10:00 a.m.
Eastern Time. To access the live call, please dial 1-888-482-0024 (U.S.) or
617-801-9702 (international). The conference ID is 60950490. Live audio of the
conference call will be simultaneously broadcast over the Internet and will be
available to members of the news media, investors and the general public. Access
to live and archived audio of the conference call will be available by following
the appropriate links at www.virologic.com and clicking on the Investor
Relations link, or by going to www.aclara.com and clicking on the Conference
Calls link in the Investor Relations section. Following the live broadcast, a
telephone replay will also be available at 1-888-286-8010 (U.S.) or 617-801-6888
(international), passcode 67550795, until midnight Eastern Time on Friday, June
11, 2004.
The information provided on the teleconference is only accurate at the time of
the conference call, and ViroLogic and ACLARA will take no responsibility for
providing updated information except as required by law.
ABOUT VIROLOGIC
ViroLogic is a biotechnology company advancing individualized medicine by
discovering, developing and marketing innovative products to guide and improve
treatment of serious infectious diseases such as AIDS and hepatitis. The
Company's products are designed to help doctors optimize treatment regimens for
their patients that lead to better outcomes and reduced costs. The Company's
technology is also being used by numerous biopharmaceutical companies to develop
new and improved antiviral therapeutics and vaccines targeted at emerging
drug-resistant viruses. More information about the Company and its technology
can be found on its web site at www.virologic.com.
ABOUT ACLARA
Founded in 1995, ACLARA is a biotechnology company working to provide physicians
and
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researchers products and services to make personalized medicine a reality
through its protein-based assay technology - the eTag(TM) System. ACLARA is
dedicated to unlocking the power of pathway biology to accelerate the
development of next-generation targeted therapeutics, recognizing the most
appropriate patients for approved therapies and identifying the highly-specific,
protein-based biomarkers that will enable physicians to create truly
personalized treatment regimens for patients suffering from cancer and other
life-threatening disorders.
ACLARA is commercializing its proprietary eTag System to enhance and accelerate
drug discovery research and the preclinical and clinical development of targeted
therapeutics. ACLARA's technology may also enable the development of
highly-specific, protein-based diagnostics capable of providing physicians with
a powerful tool for creating personalized treatment regimens for patients
suffering from serious and difficult-to-treat cancers. For more information on
ACLARA please visit the Company's web site at www.aclara.com.
ADDITIONAL INFORMATION
ViroLogic, Inc. intends to file with the Securities and Exchange Commission a
registration statement on Form S-4 that will include a joint proxy
statement/prospectus of ViroLogic and ACLARA and other relevant documents in
connection with the proposed transaction. Investors and security holders are
advised to read the joint proxy statement/prospectus regarding the proposed
merger when it becomes available, because it will contain important information.
Investors and security holders may obtain a free copy of the joint proxy
statement/prospectus, when available, and other documents filed by ViroLogic and
ACLARA at the Securities and Exchange Commission's web site at www.sec.gov. The
joint proxy statement/prospectus and such other documents may also be obtained,
when available, from ViroLogic by directing such request to ViroLogic, Inc., 345
Oyster Point Blvd; South San Francisco, California 94080, Attention: Investor
Relations. The joint proxy statement/prospectus and such other documents may
also be obtained, when available, from ACLARA by directing such request to
ACLARA BioSciences, Inc., 1288 Pear Avenue, California 94043, Attention:
Investor Relations. ViroLogic, ACLARA and their respective executive officers
and directors may be deemed to be participants in the solicitation of proxies
from stockholders of ViroLogic and ACLARA with respect to the transactions
contemplated by the merger agreement. A description of any interests that
ViroLogic's or ACLARA's directors and executive officers have in the proposed
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merger will be available in the joint proxy statement/prospectus. Information
regarding ViroLogic officers and directors is included in ViroLogic's 10-K/A
filed with the Securities and Exchange Commission on April 23, 2004. Information
regarding ACLARA's officers and directors is included in ACLARA's 10-K/A filed
with the Securities and Exchange Commission on April 29, 2004. These materials
are available free of charge at the Securities and Exchange Commission's web
site at http://www.sec.gov and from ViroLogic and ACLARA.
FORWARD LOOKING STATEMENTS
Certain statements in this press release are forward-looking, including
statements relating to revenue growth, expectations of testing products and
actions designed to continue the growth of patient testing revenue, anticipation
of cash resources upon the completion of the merger, the ability of the combined
companies to create a leader in molecular diagnostics for personalized medicine
in oncology and infectious disease, the size of the oncology testing opportunity
and the approval of new targeted therapeutics requiring individual patient
testing, and the timing of completion and the likelihood of stockholder approval
of the merger. These forward-looking statements are subject to risks and
uncertainties and other factors, which may cause actual results to differ
materially from the anticipated results or other expectations expressed in such
forward-looking statements. These risks and uncertainties include, but are not
limited to: risks related to the inability to obtain, or meet conditions imposed
for, governmental and other approvals of the merger, including approval by
stockholders of the companies; the risk that the ViroLogic and ACLARA businesses
will not be integrated successfully; risks related to any uncertainty
surrounding the merger, and the costs related to the merger; the risks that the
Companies' products may not perform in the same manner as indicated in this
press release; whether the combined company successfully conducts clinical
trials and successfully introduces new products; risks related to the
commercialization of ACLARA's eTag assay system; risks related to the
implementation of ViroLogic's distribution agreement with Quest; whether others
introduce competitive products; the risk that the combined company's products
for patient testing may not continue to be accepted or that increased demand
from drug development partners may not develop as anticipated; the risk that
gross margins may not increase as expected; the risk that the combined company
may not continue to realize anticipated benefits from its cost-cutting measures;
the timing of pharmaceutical company clinical trials; whether payors will
authorize reimbursement for its
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products; whether the FDA or any other agency will decide to regulate the
combined company's products or services; whether the combined company will
encounter problems or delays in automating its processes; whether intellectual
property underlying ViroLogic's PhenoSense technology and ACLARA's eTag System
is adequate; the ultimate validity and enforceability of the companies' patent
applications and patents; the possible infringement of the intellectual property
of others and whether licenses to third party technology will be available; and
whether the combined company is able to build brand loyalty and expand revenues.
For a discussion of other factors that may cause ViroLogic's and ACLARA's actual
events to differ from those projected, please refer to each Company's most
recent annual reports on Form 10-K and quarterly reports on Form 10-Q, as well
as other subsequent filings with the Securities and Exchange Commission.
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