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TRIPATH BID A GOOD MOVE FOR BD, ANALYST SAYS

August 15, 2006

Becton Dickinson (BD) Aug. 14 said it was making a $350 million bid for TriPath Imaging, a maker of diagnostic tests based Burlington, N.C., in what is seen as a good move.

Molecular diagnostics is "one of the key growth drivers in the $2.3 billion global in vitro diagnostic market," said Lazard Capital Markets analyst Jeffrey Frelick in an Aug. 15 research note.

TriPath's promising group of molecular diagnostics for melanoma and cervical, breast and ovarian cancers "may lead to revenue contribution in only a year or so" for BD, Frelick added.

Furthermore, TriPath's liquid-based cytology business, "with consensus revenue estimates of more than $100 million this year, almost justifies the valuation alone, given the upper end of recent diagnostics acquisitions is [three times] sales," said Frelick. "Thus, we believe BD is getting a molecular diagnostic business for approximately $50 million."

BD and TriPath Imaging have collaborated in identifying biomarkers for various cancer diagnostics since 2001, BD said.