NEW YORK, Oct. 14 - Bayer will shutter Visible Genetics' Cambridge, UK, facility and lay off all of its 30 employees as the German pharma giant takes it first steps after formally absorbing VGI this morning, a Bayer spokesman told GenomeWeb.
"Bayer will consolidate VGI's facility in Cambridge into Bayer's diagnostics division locations in the United States," the spokesman, Kit Newton, said. VGI's Cambridge offices were the company's main R&D facility and its European headquarters. Bayer expects to complete the transition over the next 30 days, and plans to sublet the property at that time, said Newton.
As GenomeWeb reported this morning, Bayer today said it has closed its acquisition of Visible Genetics, and in the process gave itself a broader foothold in the infectious disease-diagnostics market. Through the acquisition, originally announced in July, Bayer's diagnostics division gains VGI's OpenGene DNA-sequencing systems and Trugene HIV genotyping assay line, the only genetic viral-resistance test available for HIV in the US.
Terms of the deal call for Bayer to spend around $61.4 million for Toronto-based VGI by scooping up all of the company's outstanding shares for $1.50 apiece, and by buying all of its Series A preferred shares at par plus accrued dividends.
Beside the Cambridge closing, Newton reiterated his remarks from earlier this morning that Bayer has not yet determined the fate of VGI's remaining 320 employees, or the company's operating companies in France, Spain, Italy, Portugal, and Israel. Bayer and VGI have "integration teams who will determine the best melding, and we would hope to have all of these decisions made by the end of the year," Newton told GenomeWeb.
The acquisition marks the end of a journey undertaken by the Canadian company last spring when it abruptly put itself up for sale. "While VGI is committed to acting in the best interest of its shareholders, the timing and outcome of this process is uncertain," the company said in a statement on May 30.
The decision to sell was made following strategic-planning talks that took place during the winter, according to VGI spokesman Bruno Maruzzo. "Recently one of the options we started considering was an acquisition or a sale," he told GenomeWeb in an interview in May.
A statement made more than a year ago by CEO Richard Daly, who will stay at the firm for six more months as a consultant, was more blunt: "The future of our company lies in the clinical market, not the research market. Research customers using the company's sequencing products order less frequently than clinical customers, and selling to both markets would require separate marketing and distribution networks," said Daly. "The two don't have much in common."