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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
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Washington,
D.C. 20549
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SCHEDULE
TO
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(RULE
14d-100)
Tender
Offer Statement Pursuant to Section 14(d)(1) or 13(e)(1)
of
the
Securities Exchange Act of 1934
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VENTANA
MEDICAL SYSTEMS, INC.
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(Name
of Subject Company)
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ROCKET
ACQUISITION CORPORATION
ROCHE
HOLDING LTD
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(Names
of Filing Persons – Offeror)
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COMMON
STOCK, PAR VALUE $0.001 PER SHARE
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(Title
of Class of Securities)
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92276H106
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(Cusip
Number of Class of Securities)
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Beat
Kraehenmann
Roche
Holding Ltd
Grenzacherstrasse
124
CH-4070
Basel
Switzerland
Telephone:
+41-61-688-1111
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(Name,
Address and Telephone Number of Person Authorized to Receive
Notices
and
Communications on Behalf of Filing Persons)
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Copies
to:
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Christopher
Mayer
Davis
Polk & Wardwell
450
Lexington Avenue
New
York, New York 10017
Telephone:
(212) 450-4000
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Check
the appropriate boxes below to designate any transactions to which
the
statement relates:
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Enhancing Roche's position as the world's leading fully-integrated personalised
healthcare company
Ventana Acquisition: Conference call to analysts & investors
26 June 2007
1
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This presentation contains certain forward-looking statements. These
forward-looking statements may be identified by words such as 'believes',
'expects', 'anticipates', 'projects', 'intends', 'should', 'seeks',
'estimates', 'future'or similar expressions or by discussion of, among other
things,strategy, goals, plans or intentions. Various factors may cause actual
results to differ materially in the future from those reflected in
forward-looking statements contained in this presentation, among
others:
1 pricing and product initiatives of competitors;
2 legislative and regulatory developments and economic conditions;
3 delay or inability in obtaining regulatory approvals or bringingproducts
to market;
4 fluctuations in currency exchange rates and general financial market conditions;
5 uncertainties in the discovery, development or marketing of new products or new
uses of existing products, including without limitation negative results of
clinical trialsor research projects, unexpected side-effects of pipeline or marketed
products;
6 increased government pricing pressures; 7 interruptions in production
8 loss of or inability to obtain adequate protection for intellectual property rights;
9 litigation;
10 loss of key executives or other employees; and
11 adverse publicity and news coverage.
Any statements regarding earnings per share growth
is not a profit forecast and should not be interpreted to mean that Roche's
earnings or earnings per share for this year or any subsequentperiod will
necessarily match or exceed the historical published earnings or earnings per
share of Roche.
For marketed products discussed in this presentation, please
seefull prescribing information on our website - www.roche.com
All mentioned trademarks are legally protected
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Roche Group
Ventana Acquisition
Transaction Financials
3
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Roche Group
A leading global healthcare company
Roche Group Sales 2006
CHF 42bn
o World leader in oncology, transplantation and hepatitis
o World leader in in-vitro diagnostics
o World leader in Biotechnology
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Roche Group - Strategy
Differentiation through Personalised Healthcare
Life Sciences
In Vitro Diagnostics
Pharma
Increasing medical valueto patients& physicians
o Innovative and medically differentiated products/services
o Patient-tailored treatment that deliver tangible improvement to the health,
quality of life and
life expectancy of patients
o Leading in the development & commercialisation of targeted drugs&
companion diagnostic tests
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Roche Group - Personalised Healthcare
Key component of good drug development and cost-effective, safe treatment
Drug discovery
Improve drug target selectionGain early indicationof response profile
faster development, targeted drug
Patient stratification
Increase risk/ benefit ratio:
Include patients more likely to respond
Exclude those not likely to benefit
safer, more efficacious trials and drugs
Companion diagnostics
New testing opportunities:
Early detection/ screening
Patient selection
Monitoring treatment/ relapse
defined market on launch, efficient use of therapies
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Roche Group - Acquisition RationaleStrengthening the world's leading, fully-
integrated Personalised Healthcare company
Enter
Fast growing tissue-diagnostics market segment with attractive profitability
Leverage
Roche's distinctive capabilities and global position in Diagnostics
Position
Roche as the worldwide leader in Personalised Healthcare
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Roche Group
Ventana Acquisition
Transaction Financials
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Ventana Acquisition - Company OverviewChanging the practice of medicine in
tissue-based cancer diagnosis
Company facts
- Founded 1985, based in Tucson, Arizona
- 952 employees (year end
2006
o 2006 Financials
- Revenue '06: $ US 238 m
- Rev. CAGR '04-'06: ~20%
- Operating Margin: ~19 %
o Leader in tissue-based diagnostics
- Leadership in advanced staining segment
- Large installed base in pathology labs
- Strong U.S. presence
Source: Ventana Investor Presentation
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Ventana Acquisition - Product Portfolio*
Leadership in advanced staining
Histology Work-flow Tissue processing Primary staining
Description Tissue Preparation Tissue Structure
e.g. H&E Stains
Ventana's Products Symphony
Advanced staining Automated Image
analysis and storage
Molecular Target Image analysis & archive
(IHC/ISH/FISH/FITC)
e.g. Pathway Her2/neu
NexEs IHC BenchMark VIAS
XT/LT
Source: Ventana Homepage
* Not full display of Ventana's product portfolio
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Ventana Acquisition - New Market Potential
Histopathology; ~1 bn market, growing 10% p.a.*
Market size and growth Key growth drivers
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o High need for test automation and standardisation
o Increasing incidence of cancer
o Targeted cancer drugs requiring companion diagnostics
Source: Analyst reports, Roche Analysis
* Analysis of the histopathology market based on Analyst forecasts
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Roche and Ventana - Clear Market Leaders
Maximising each companies market strengths
Source: Analyst reports, Roche
* Analysis of the histopathology market based on Analyst forecasts
Analysis All growth rates in local currency
**Europe, Middle East and Africa (excl. Iberia)
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Ventana Acquisition - Providing Medical Value
Better diagnosis & therapy selection in oncology
Influence on medical
decisions by pathologists
Diagnostic Process
(e.g. Oncology)
Existing Roche Dx segment Existing Ventana segment
Emerging innovative Dx segment
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Ventana Acquisition - Complementary Technologies
Complete tissue-based diagnostics capabilities for customers
Ventana technology capabilities
Roche Diagnostics technology capabilities
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Ventana Acquisition - Companion Diagnostics
Strong oncology drug portfolio, combined with full diagnostics
capabilities uniquely positions Roche to lead in PHC
Roche Roche Capabilities Ventana Capabilities
Oncology Pipeline PCRElecsys/ Others Ventana Capabilities
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Ventana Acquisition - Roche Diagnostics
Maintain Ventana as a dedicated business within diagnostics
Life Science In Vitro Diagnostics
Ventana
Molecular Diagnostics
Professional Diagnostics
Diabetes Care
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Ventana Acquisition - Value Proposition
Combined strengths will enable new, differentiated
products and solutions for patients and providers
o Leadership in tissue-based diagnostics
o World-class capabilities in advanced staining (IHC/ ISH)
o Strong relationships with pathologists
o Leadership position in U.S.
o World-class molecular biology capabilities
o #1 Oncology pipeline
o 30+ years in lab automation, test development & system integration
o Global market position & reach
Differentiated
Products/ solutions
o Broadest diagnostic offering
o Fully integrated personalisedhealthcare provider
o Best platforms & capabilities to drive innovation in tissue-based
diagnostics
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Roche Group
Ventana Acquisition
Transaction Financials
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Transaction Financials - Overview
o $75 per share in cash for each outstanding share of Ventana
(fully diluted)
o Transaction valued at approximately $3 billion
Offer o Will commence a tender offer, after repeated attempts to
engage Ventana
management in discussions for a negotiated transaction
o Fully financed
o No significant regulatory impediments
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Implied o 44 % premiumto $51.95, Ventana's close on June 22, 2007
Premium o 55 % premium to $48.30, Ventana's 3-month average trading price
o 66 % premium to $45.05, Ventana's year-to-date average trading
price
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o Customary conditions including that:
Offer - A majority of Ventana's shares of common stock, on a fully
diluted
Conditions basis, are tendered into Roche's offer
- Ventana's Board takes all necessary actions to make its
shareholder rights plan inapplicable to Roche's offer
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Transaction Financials - Offer Price
Fair value for shareholders
Attractive premium to Ventana.s shareholders recognising
value created to-date and future potential of business
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Timing/ Next steps
o Promptly commence tender offer to purchase all of the outstanding common
stock of Ventana
o Commence regulatory process immediately
o Offer will be subject to customary conditions:
- Tender of a majority of Ventana's shares of common stock, on a fully
diluted basis
- Ventana's Board takes all necessary actions to make its shareholder
rights plan inapplicable to Roche's offer
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Transaction Financials - Summary
Deploying capital for the right strategic purposes
1 Offer of $75 cash per share, representing an attractive value to Ventana's
stockholders
2 Roche committed to maintain operations in Tucson, Arizona and further
invest in the business
3 Deal accretive to operating profit/ EBIT within next 2-3 years and to Core
EPS within 4 years. Marginal dilution (<1 %) to Core EPS prior to this
4 Strategic flexibility of the Roche group not significantly affected
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Additional information THE TENDER OFFER DESCRIBED IN THIS PRESENTATION HAS NOT YET COMMENCED, AND THIS PRESENTATION IS NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION OF AN OFFER TO SELL VENTANA'S COMMON STOCK. THE SOLICITATION AND OFFER TO BUY VENTANA'S COMMON STOCK WILL ONLY BE MADE PURSUANT TO AN OFFER TO PURCHASE AND RELATED MATERIALS THAT ROCHE INTENDS TO FILE PROMPTLY. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THESE MATERIALS CAREFULLY WHEN THEY BECOME AVAILABLE SINCE THEY WILL CONTAIN IMPORTANT INFORMATION, INCLUDING THE TERMS AND CONDITIONS OF THE OFFER. THE OFFER TO PURCHASE AND RELATED MATERIALS WILL BE FILED BY ROCHE WITH THE SECURITIES AND EXCHANGE COMMISSION (SEC), AND INVESTORS AND SECURITY HOLDERS MAY OBTAIN A FREE COPY OF THESE MATERIALS (WHEN AVAILABLE) AND OTHER DOCUMENTS FILED BY ROCHE WITH THE SEC AT THE WEBSITE MAINTAINED BY THE SEC AT WWW.SEC.GOV. THE OFFER TO PURCHASE AND RELATED MATERIALS MAY ALSO BE OBTAINED (WHEN AVAILABLE) FOR FREE BY CONTACTING MACKENZIE PARTNERS, THE INFORMATION AGENT, FOR THE TENDER OFFER AT (212) 929-5500 OR (800) 322-2885 (TOLL-FREE). |
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We Innovate Healthcare
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Glossary (1/2)
Term What We Mean
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Primary Staining To see the tissue under a microscope, the sections are
stained with one or more pigments. This is done to give
contrast to the tissue being examined, as without
staining it is very difficult to see differences in cell
morphology. Hematoxylin and eosin (H&E) are the most
commonly used stains in histology and histopathology
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Immunohistochemistry IHC refers to the process of localising proteins in
(IHC) cells of a tissue section exploiting the principle of
antibodies binding specifically to antigens in
biological tissues. Immunohistochemical staining is
widely used in the diagnosis of cancer. Specific
molecular markers are characteristic of particular
cancer types
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In Situ Hybridisation ISH is a type of hybridisation that uses a labelled
(ISH) complementary DNA or RNA strand (i.e., probe) to
localise a specific DNA or RNA sequence in a portion or
section of tissue (in situ). DNA ISH can be used to
determine the structure of chromosomes
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FISH Is a specific form of ISH using fluorescent probes which
bind only to those parts of the chromosome with which
they show a high degree of sequence similarity
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CISH Chromogenic ISH is a lower cost alternative to FISH, as
it uses conventional enzyme (peroxidase) reactions to
detect the probes that bind to the target sequence.
Because this technique does not require a fluorescent
microscope to analyze the binding pattern, it is easier
to perform and lower cost
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Glossary (2/2)
Term What We Mean
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Stratifying Marker A biomarker used to differentiate patient populations
according to drug response
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Prognostic Marker A biomarker used to predict survival i.e. in tumor
staging, where the degree of progression of cancer has
been shown to predict survival
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Stratifying Dx/ A diagnostic used to stratify a clinical patient
Companion Dx population with the purpose of delivering clinical
utility
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Anatomical Branch of pathology that is concerned with the diagnosis
Pathology of disease based on the gross and microscopic
examination of cells and tissues
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Histopathology Is a field of anatomical pathology which specializes in
the histologic study of diseased tissue. It used for
accurate diagnosis of cancer and other disease
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Cytopathology Is a field of anatomical pathology which studies and
diagnoses diseases on the cellular level. The most
common use of cytopathology is the Pap smear, used to
detect cervical cancer at an early treatable stage
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Flow Cytometry Technique for counting, examining and sorting
microscopic particles suspended in a stream of fluid. It
allows simultaneous multiparametric analysis of the
physical and/or chemical characteristics of single
cells. It is the main technology used today to diagnose
the different types of leukemia and lymphoma
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