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Agilent Acquires Synthetic Nucleic Acids Maker; Looks to Triple Revenue in India in Next Few Years

With an eye on its future in the molecular diagnostics market, Agilent Technologies said this week that it has acquired SynPro, a privately held manufacturer of synthetic nucleic acids based in Boulder, Colo.

The acquisition provides Agilent with access to a new market — nucleic acids synthesis — with potential applications in drug development and possibly molecular diagnostics. For the time being, Agilent is housing the acquired business in its recently formed New Business Group so it can evaluate its fit with the rest of the firm's Life Sciences and Chemical Analysis (LSCA) business.

In addition to the acquisition, Agilent broke ground last week on a new 10-acre campus in India, a market in which the company hopes to triple its revenue in the next two to three years.

SynPro Acquisition

Agilent said that it had acquired SynPro, a manufacturer of short synthetic DNA and RNA molecules, for an undisclosed sum. SynPro was established in December 2005 and owns a contract manufacturing facility for supplying active pharmaceutical ingredients and related services.

"The reason why we're keeping this in the New Business Group is that the whole idea of growing our instrument platform business into adjacent spaces like diagnostics is one way to explore that market opportunity — take a small step and learn a lot more before we get further into it."

Agilent has made SynPro part of its New Business Group, an entity formed early this year to evaluate technologies and businesses that could build on the firm's current products.

"The point of the New Business Group is that we can go and explore things that are really adjacent to the existing businesses rather than being part of their core today, and explore them, understand the business model, and understand if it's something that we really do want to make a bigger commitment to without distracting the [overall] business from its current focus and business goals," said John Eaton, vice president of corporate development at Agilent, in an interview this week.

Agilent is not disclosing SynPro's sales, but the firm estimated that the size of the RNA and DNA synthesis market is currently around $700 million, with anticipated growth in the range of 10 to 20 percent per year. Eaton told BioCommerce Week that there "isn't an easy way" to split out how much of that market is RNA synthesis and how much is DNA synthesis.

Nucleic acid synthesis is a new business area for Agilent, according to Eaton, but makes sense as a complementary piece of the firm's portfolio. "Basically, we're a measurement company, and certainly as we start looking at adjacencies to our existing instrument business, the use of things like what SynPro makes — for example, in … diagnostics — is a natural adjacency," he said. "If you think about diagnostics, diagnostics to us is a measurement problem."

Agilent currently sells a cholesterol test for use on its 2100 bioanalyzer, a microfluidics platform for biomolecular testing. The platform, which was developed to analyze DNA, RNA, proteins, and cells, is at the base of Agilent's plans for the molecular diagnostics market.

"That's one reason why we're interested" in SynPro, said Eaton. "The reason why we're keeping this in the New Business Group is that the whole idea of growing our instrument platform business into adjacent spaces like diagnostics is one way to explore that market opportunity — take a small step and learn a lot more before we get further into it."

Eaton said of SynPro's business, "If this is successful, [and] for example, this leads us into the diagnostics space, then that will probably go into our LSCA" unit.

Among potential competitors in the nucleic acids synthesis space are BCW Index firms Qiagen and Fisher, through its Dharmacon unit, Germany's MWG Biotech, and a handful of firms synthesizing siRNA, including Applied Biosystems' Ambion unit.

"There aren't too many" competitors in the RNA synthesis market, Eaton said. "There are two or three other companies like this. It's a fairly nascent space, because it's only now that — as people start moving into clinical trials [there is] a market for DNA and RNA in this sort of format.

"It's not a well-formed market, even," said Eaton. "That's part of why we want to run this through the New Business Group. It's a learning vehicle, an experimental vehicle, it's incubating a new business. We are trying to partly create a market as well as create a business."

As part of the acquisition, Agilent has hired 22 SynPro employees.

Targeting Growth in India

In a separate announcement last week, Agilent said that it would invest $25 million in India over the next two years. CEO Bill Sullivan made the announcement at a groundbreaking ceremony for a 10-acre business campus near Manesar, Haryana, which Agilent hopes to complete building by 2008.

Agilent's plans reflect a growing trend among large multi-platform tool vendors, which, like many other kinds of companies, believe emerging markets in Asia, especially India and China, will help them grow revenue. (For more on other BCW Index firms' plans in the region, see BioCommerce Week 4/5/2006)

Agilent's India operations generated $100 million in 2005, which represented a 30-percent improvement over 2004, and Sullivan said he expects revenue generated in India to triple in two to three years.

An Agilent spokesperson told BioCommerce Week that the campus will include 200,000 square feet of building space. "People who work there are going to be involved in R&D, engineering support, and financial services," she said.

The firm already has sales and service operations set up in India. "We've really focused on the test and measurement market there," said the spokesperson. It is unclear how much of an effect the expansion will have on Agilent's LSCA business in India.

Agilent also plans to hire an additional 800 staffers, mostly in R&D, at its facility in Gurgaon, located outside New Delhi, Sullivan told reporters in India. The facility currently employs around 200 R&D staffers.

In May 2005, Agilent established a training center in Shanghai with the intent of increasing the technical capabilities of the company's customer support teams (see BioCommerce Week 5/19/2005). The Shanghai Training Center is located adjacent to the manufacturing and R&D centers the company set up in that city three years ago.

Agilent currently employs roughly 1,100 workers in China, according to the company spokesperson.

— Edward Winnick ([email protected])

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