CRXL Crucell NV ADS, Each Representing One Ordinary Share (MM)

Crucell NV (CRXL.AE) will update Johnson & Johnson (JNJ) on contamination issues at the Dutch biotechnology firm's factory in South Korea before the U.S. health-care products giant decides whether to declare its offer for the target unconditional.

"The impact of the contamination issue isn't completely clear as of yet, but we will look at it again later," Rene Beukema, General Counsel & Corporate Secretary at Crucell said Friday.

Speaking at an extraordinary meeting of Crucell shareholders, Beukema said that no concrete conditions had been set to determine whether or not the Korean situation constitutes a material adverse effect.

J&J Wednesday formally launched its EUR1.75 billion takeover offer for Crucell after both parties reached an agreement in principle on the U.S. company's EUR24.75-a-share cash offer for the portion of the Dutch vaccine maker it doesn't already own in October. J&J holds about 17.9% of Crucell shares, and its bid is for the shares outstanding.

Wednesday's agreement was reached despite news in late October that Crucell would abandon its full-year earnings targets after suspending operations at its Shingal facility in South Korea and temporarily halting shipments of two vaccines because of sterility issues at the plant.

J&J said last week that it might change the terms of the deal if problems at Crucell's manufacturing plant in South Korea prove worse than thought.

Crucell currently operates a plant in Shingal and is in the process of building a second plant in Incheon.

"We expect the Incheon facility to start shipments in the second halve of 2011," Beukema said.

After Crucell and J&J announced the intended offer back in September, Crucell's second-largest shareholder Van Herk Groep BV, which holds a stake of just over 10%, said the offer was too low, a view echoed by other shareholders.

"We'll decide in February if we'll tender our stake," Gertjan van der Baan, director at Van Herk said Friday, adding: "You'll never know what will happen in the meantime."

Crucell's management and supervisory board Friday told shareholders that J&J's offer is in the best interest of all stakeholders, and that a standalone scenario for the biotech would pose various risks going forward.

They also stressed J&J's financial clout, saying the group has necessary cash to expand Crucell's research & development budget.

"All alternative scenarios results in a value below J&J's offer," chairman of the supervisory board, Jan Pieter Oosterveld said.

- By Ben Zwirs and Robin van Daalen; Dow Jones Newswires; +31 20 571 52 01; ben.zwirs@dowjones.com

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