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Millipore Expects Serologicals Acquisition to Double Firm's Value Over the Next Three Years

Millipore expects its recent $1.4-billion acquisition of Serologicals to double the value of the firm by 2009, with biosciences and bioprocess remaining the two top areas of growth for the company.
The Serologicals acquisition, which was completed in July, enabled Millipore to access new high-growth research markets and placed it in more direct competition with several companies in the BCW Index, including Invitrogen, Qiagen, and Sigma-Aldrich.
Martin Madaus, chairman, president, and CEO of Millipore, told investors at the UBS Global Life Sciences Conference in New York last week that in the near term Millipore is focused on creating value from the Serologicals acquisition, and that it is “accelerating the operational consolidation” of the two companies. The company’s near-term R&D priorities are in the area of drug discovery, multiplexing, and antibodies.
He added that the Serologicals acquisition now allows Millipore to offer more “turn-key” assay or workflow kits as opposed to selling homebrew components as it has more often done in the past.
In April, when the acquisition was initially announced, Madaus said the addition of Serologicals would enable Millipore to "optimize workflows from sample preparation, to developing and performing assays, to analyzing results. Our ... offering will include process development and scale-up, upstream processing, downstream filtration, and ongoing compliance monitoring and testing." (see BioCommerce Week 4/26/2006).
Millipore expects the purchase will enable it to generate around $1.4 billion in 2006 revenue and grow 2007 receipts by between 9 and 11 percent year over year. The firm reported 2005 revenue of $991 million, up 12 percent from 2004. Serologicals brought in revenue of $274.9 million last year, a 40-percent increase over 2004.
Madaus told investors at UBS that in 2005 Millipore generated approximately 7 percent of its revenues from drug discovery products; 7 percent from research reagents; 11 percent from cell culture; 13 percent from sample preparation tools; and 29 percent from its legacy chromatography and filtration businesses.
“Chromatography and filtration remain our biggest business,” Madaus said. “However, we are not just a filtration company anymore.”
The acquisition gave Millipore's bioscience division, which includes tools for protein and DNA research, analytical sample preparation, and bioassay development, a larger presence in the drug-discovery products and services, antibodies, cell biology reagents, and stem cell research markets. Serologicals' research division is particularly focused on neuroscience, nuclear function, and stem cell research products, as well as multiplex platform technologies.
Meanwhile, Millipore’s bioprocess division gained Serologicals’ cell culture supplements, which helped the firm enter the $1-billion upstream market.
Madaus said the company has already cleared the major stumbling blocks in integrating the two firms — namely, “competitive pressures in the drug-discovery market.” But he did not elaborate on this point.
The combined company employs around 5,800 people with a worldwide sales, sales support, and service staff of 1,200. Millipore has not disclosed whether any jobs were eliminated as part of the integration.
At the time the acquisition was announced, Madaus said Millipore would try to retain "as many of the people from Serologicals as we possibly can."

“Chromatography and filtration remain our biggest business. However, we are not just a filtration company anymore.”

New R&D Center Opened
While Millipore continues with the integration of Serologicals’ operations, the firm opened a new $50-million research and development center for its bioprocess division in Massachusetts this week.
The facility, located in Bedford, is an 110,000 square foot building containing 47,000 square feet of laboratory space. Up to 500 people will work in the facility in a variety of positions, Millipore said.
"Over the past two years, we have begun to transform Millipore into a more innovative organization with new capabilities to meet the changing needs of our industry,” Madaus said in a statement. “The opening of this center continues this transformation, enabling us to attract the best scientific talent and bring together multiple research disciplines to develop integrated solutions.”
The bioprocess division helps pharmaceutical and biotechnology companies optimize their manufacturing productivity, ensure the quality of drugs, and scale up the production of difficult-to-manufacture biologics. The division derives 65 percent of its revenue from customers outside of the United States, according to Millipore.
— Ben Butkus contributed to this article.

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