Building on its portfolio of kinase and ion channel drug screening products, Invitrogen said last week that it will acquire cell-based assay company Sentigen Holding for around $25.9 million in cash.
The acquisition is Invitrogen’s first of this year, following an extremely busy year of M&A activity, and marks the firm’s entry into the G-protein coupled receptors (GPCR) tools market. The firm is betting that Sentigen's Tango assay system and division-arrested assay-ready cells will help it grow its own assay-development business by providing an additional way to screen G-protein coupled receptors and other “key” drug target classes.
The acquisition “really provides us an entry into the GPCR target class market,” said Nick Ecos, vice president and general manager of Invitrogen’s Discovery Sciences Business. “Our strength has been in other target classes, most notably kinases. We’re also in nuclear receptors and ion channel target classes.
“GPCRs have been studied for a long time, [and] there are a number of options out there that have been available to our customers for a long time,” said Ecos. “What we’ve been looking for is a technology that gets us into the GPCR target class with something that really adds value over what customers have available from other providers now. This really broadens our coverage into all major target classes. Our customers no longer have to drop us and pick up another provider if they move from one target class to another,” he said.
Sentigen’s Tango assay technology is applicable for GPCR targets and can also measure protein-protein interactions in living cells, according to Invitrogen. Sentigen subsidiary Cell & Molecular Technologies launched the Tango GPCR assay platform one year ago.
According to CMT, the Tango platform comprises a panel of 54 GPCR targets. Key features of the luciferase-based chemiluminescent assay platform include up to 1,700-fold signal-to-background ratios, high specificity, and broad applicability to novel targets, including orphan receptors, where the ligand of the receptor remains unknown and blends in with the background.
The Tango technology “enables a quantitative biology approach on orphan targets and other difficult GPCR targets of interest to researchers doing drug discovery,” Ecos told BioCommerce Week. “The Tango technology enables a … new kind of readout that separates endogenous protein from the background to really enable researchers to see GPCR targets that they hadn’t been able to find before.”
The assays can be run on standard plate readers and are not platform specific, according to Ecos.
Sentigen’s assay-ready cells, meantime, are designed to “uncouple” the process of cell production from cell-based drug screening. Sentigen has “a patent for growth-arresting cells in cellular assays in all target classes, not just GPCRs,” said Ecos. “This is going to take care of a couple of problems customers have. One is, as the adoption of cell-based assays continues to grow, these drug discovery scientists are finding they’re having to become experts in doing cell culture to keep the cell lines viable and to modulate their growth and try and control the experimental conditions.
“This technology takes a lot of the hassle out of doing cell culture for our customers, so that it controls the proliferation,” and provides researchers with a methodology to convert live cell assays into ready-to-use consumable products, he said.
Invitrogen officials declined to give a market estimate for the acquired technologies, but Ecos said, “the market is growing for the GPCR target class. The general adoption of cell-based assays continues to increase, so the division-arrest technology which facilitates that for our customers is also a growing market,” he said.
Researchers studying GPCR activation often use fluorescence-based calcium flux assays or cAMP assays for their experiments. Several BCW Index firms produce instruments for performing cell-based assays, with Molecular Devices’ FLIPR platform thought to be the market leader for GPCR and ion channel screening. The firm faces a stiff challenge from PerkinElmer, which currently has a co-marketing pact combining Invitrogen’s Voltage Sensor Probes ion channel reagents with PerkinElmer’s CellLux platform.
Jumping Back Into the M&A Market
The acquisition is Invitrogen’s first of the year, which is surprising given the firm’s rapid pace of acquisitions over the past two years — last year alone the firm spent $650 million acquiring eight companies — and statements by Chairman and CEO Greg Lucier that the firm expects to spend $500 million on acquisitions this year. Invitrogen officials recently insisted during a conference call that the firm’s acquisition strategy is on track, even though it is now reviewing its portfolio and the myriad technologies and businesses it has acquired (see BioCommerce Week 8/9/2006
“This company has greatly expanded its footprint over the last couple of years,” said Lucier during the call last month. “We have moved into a number of new business segments, and we are now at this point taking a step back, looking at our entire portfolio and conducting a strategic review on each and every one of the businesses in which we operate with a focus in particular on our sera business.”
“This really broadens our coverage into all major target classes. Our customers no longer have to drop us and pick up another provider if they move from one target class to another.”
He said Invitrogen is in the midst of integrating facilities and processes from its acquisitions of Zymed, CalTag and Biosource — all of which were acquired in 2005. Part of the integration includes shutting down its South San Francisco, Calif., operations and moving people and products to its facilities in Camarillo, Calif., or Eugene, Ore.
“As anyone who has been involved in these types of efforts knows, full-scale integrations are time- and resource-intensive and can impact revenue streams,” said Lucier.
However, he noted that Invitrogen’s acquisition strategy has not changed in light of the difficulties encountered in the second quarter. “I would just simply say … that we're not signaling any change in our overall growth stance. We're still pursuing many acquisitions, and we'll continue to invest in acquisitions,” said Lucier.
It remains to be seen whether Invitrogen will resume its busy M&A activity during the remainder of this year, or whether the Sentigen acquisition is an anomaly as the firm reviews its operations.
Sentigen, based in Phillipsburg, NJ, will become part of Invitrogen's Discovery Sciences Business, located in Madison, Wis. An Invitrogen spokesperson said that the firm would address integration issues following completion of the acquisition, which is expected in the fourth quarter.
Invitrogen will buy Sentigen by paying $3.37 for each of the company’s outstanding shares. The purchase price represents a 35-percent premium over the average closing price of Sentigen's common stock for the 30 business days preceding the agreement.
Sentigen had $11.7 million in cash and cash investments as of June 30.