Published June 2001

Merck to buy Rosetta;
no changes planned
at area facilities

By Kathy Day
Herald Economy Writer

BOTHELL — Pharmaceutical giant Merck & Co. Inc. will acquire Rosetta Inpharmatics for about $620 million in stock, the company’s executives reported in mid-May.

Rosetta, with facilities in Bothell and Kirkland, is at the forefront of “bioinformatics,” a word for the marriage of biology and information technology. Merck officials said they hope the deal will help them develop new drugs more quickly.

No changes are planned at either facility, since Rosetta will function as an independent unit of Merck Research Laboratories (MRL), said Rosetta spokeswoman Mary Drummond.

The deal is classified as a tax-free reorganization, with each Rosetta share being converted to 0.2352 shares of Merck stock.

Anthony Ford-Hutchinson, Executive Vice President of Merck’s research arm, said in a news release that the acquisition gives the company added strength, particularly in the area of genomics — the study of genes.

Bringing Rosetta into the Merck fold, he said, “will be a tremendous asset in helping Merck more efficiently analyze gene data and intelligently select drug targets.”

Rosetta’s technology — a combination of hardware and software — enables scientists to extract as much information as they can from human genes and targets within cells.

“We get a view inside the cell and figure out what is really happening,” said Matthew Marton, who heads the Bothell lab.

Stephen Friend, Chairman and CEO of Rosetta, will become President of the new Merck unit and Vice President of Basic Research for MRL. He said the move should allow Rosetta to advance beyond providing tools for research and begin work on drug discovery.

In an interview earlier this year, Friend, who founded the company four years ago with some of the key members of the Fred Hutchinson Research Center, said he is “driven by a searing lack of being able to provide solutions” to medical problems.

A physician trained as a pediatric oncologist, Friend said the situation was particularly troubling when he worked with children who have cancer.

Rosetta was one of only a handful of biotech companies to venture into the public financing arena in 2000, when it raised $100.8 million in its initial offering.

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