In a bid to expand its protein analysis products, Qiagen plans to pay $9.7 million in cash to acquire Nextal Biotechnology, a privately held provider of protein crystallization sample-preparation tools.
The acquisition will provide Qiagen with entry to a relatively small market that is currently driven primarily by home-brew technologies. Qiagen officials estimate that the global market for Nextal's crystallography tools is $20 million to $25 million, but the firm sees "tremendous growth going forward," according to Solveigh Mähler, director of investor relations at Qiagen.
"There's really not much competition in the market," she noted. "Most of the researchers have done crystallization by using home-brew methods. To my knowledge, there is no other company in the field providing these standardized kit-based products for protein crystallization."
Qiagen will integrate Nextal's products, which include a suite of consumables for preparing proteins for crystallographic analysis the process used to determine the three-dimensional structure of proteins into its current offering of standardized protein tools for cloning, expression, purification, and crystallization. The Dutch firm singled out its QProteome fractionation products, QIAexpress PCR cloning kits, and EasyExpress protein-synthesis kits as products that would particularly benefit from a combination with Nextal's products.
"One reason why crystallization wasn't so popular was because of the [difficult] sample preparation of the crystallization process … But now, being able to provide products that really standardize the whole crystallization process and making it much easier for researchers to do this very difficult step, we think that this technology will become more common in the research community."
Qiagen will buy all of the outstanding capital stock of Montreal-based Nextal, but the total consideration could increase by $4.5 million if certain milestones are met. In addition, Qiagen noted that it would take a charge of "less than $1 million" related to the acquisition in its second quarter.
Nextal is expected to bring in revenue of roughly $3 million in fiscal 2006, Qiagen said, and will be neutral to earnings.
According to Mähler, it is the standardization of Nextal's products that should propel the growth of the market. "One reason why crystallization wasn't so popular was because of the [difficult] sample preparation of the crystallization process," she told BioCommerce Week. "The analysis at the end is not a very big issue."
"But now, being able to provide products that really standardize the whole crystallization process and making it much easier for researchers to do this very difficult step, we think that this technology will become more common in the research community," she said.
Nextal has 20-25 employees, all of which will join Qiagen, according to Mähler. However, the acquired firm does not have a sales force.
Although the products will be sold to the academic market, they are geared more toward the pharmaceutical industry for target prep and target validation, Mähler noted.
Growing via Acquisitions
Qiagen has been pretty busy this year, aiming to grow its business through a series of acquisitions and partnerships (see table). The Nextal acquisition was the third announced by the firm over the past month.
It signed a pact to buy Chinese nucleic acid purification reagents provider Tianwei Times for roughly $2 million in cash and an additional $2 million in performance-based milestones. The acquisition marks the firm's expansion into China, an emerging market targeted by many of the firms in the molecular biology tools market (see BioCommerce Week 5/26/2005).
But the most significant move for Qiagen this year was its agreement to buy Artus, which makes PCR-based molecular diagnostics for pathogenic testing, genotyping, and pharmacogenomics applications, for roughly $39.2 million in cash. Of that total, $11.6 million will be paid into escrow and released subject to certain milestones being met (see BioCommerce Week 6/2/2005).
The Artus purchase shifts Qiagen into a new market that of selling assays rather than just reagents to other diagnostic manufacturers. But it also provides Qiagen with an established OEM shop that has relationships with key diagnostic players, such as Roche and Abbott.
(Editor's note: After reviewing Qiagen's product lines, partnerships, and competitors, BioCommerce Week has added the firm to its regular roster of molecular biology tool firms tracked in the BCW Index. Please see the Edward Winnick ([email protected]
Bruker/110958-1.html" target="_blank">related item in this week's issue for more detail).
Australian Proteome Analysis Facility
Three-year pact to co-develop new proteomic sample prep tools.
Alliance to jointly market Protedyne's BioCube with Qiagen's QIAmp. Includes $2 million equity investment by Qiagen.
Roche Molecular Systems
Roche will market media sample prep kits supplied by Qiagen.
Veridex to market a custom version of Qiagen's RNeasy nucleic acid purification kit for molecular diagnostics.
OEM deal for Qiagen to develop DNA methylation analysis products.
Qiagen inks pact to make two DNA purification kits for use with Beckman's Vidiera NsP platform.
Exclusive license to use use Procognia's on-chip protein glycoanalysis technology with Qiagen's QProteome line.
National Cancer Institute
Partnership to co-develop and validate siRNAs for cancer genes.
A $40 million acquisition of the PCR-based diagnostic assay developer.
An acquisition of the Chinese nucleic acid purification reagents provider.
Expansion of distribution pact with Artus to include certain infectious disease assays.
Edward Winnick ([email protected]