Roche to buy Canada's Arius Research for C$191 million

TORONTO (Reuters) - Roche Holding AG (ROG.VX) said on Wednesday it plans to buy Canada's Arius Research Inc ARI.TO for C$191 million ($189.3 million), strengthening the international health-care company's portfolio of cancer treatments.

Arius shares rose more than 13 percent after the news and were up 28 Canadian cents at C$2.41 on the Toronto Stock Exchange on Wednesday morning.

The Swiss-based company said it would pay C$2.44 a share for Arius, a 14.5 percent premium over its closing price of C$2.13 on Tuesday. Roche will also acquire all of the outstanding warrants of Arius.

Shareholders and warrant holders representing 54.3 percent of the outstanding shares and 72.3 percent of outstanding warrants have already agreed to support the transaction.

A deal had been expected since mid-May when Arius said it had been approached by a third party. It will give Roche access to Arius's FunctionFirst technology, which is used to select and identify antibodies.

Roche said it would initially use the technology to concentrate on the areas of oncology and inflammatory diseases where it has targeted therapeutic applications.

"Companies developing anti-cancer antibody-based drugs have seen considerable attention from large pharma companies seeking to augment their pipeline of cancer-directed antibodies rather than develop them themselves," said Douglas Loe, an analyst at Versant Partners.

"It was one of the few cancer antibody companies that had not been partnered or acquired."

The acquisition, which is expected to close in the third quarter, is subject to shareholder and warrant holder approval as well as Canadian court approval.