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Immucor to Buy BioArray Solutions for $117M To Grow Transfusion, Transplantation Reach

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Immucor, which sells automated tools for blood analysis, last week said it plans to acquire BioArray Solutions for $117 million in cash in order to use its bead chip-based analysis platform as a component of an automated screening system for blood transfusions and transplantations.
 
BioArray Solutions will continue to operate from its base in Warren, NJ, and will retain its name, Immucor said. Additionally, the company said it plans to form a new venture to commercialize array-based applications based on BioArray Solutions’ intellectual property that are not essential to Immucor, but did not disclose further details on these applications. Immucor will have a 19 percent stake in the future entity.
 
Norcross, Ga.-based Immucor said that the acquisition will dilute its earnings for several years. For 2008, it said it expects the acquisition to reduce its earnings per share by roughly $.20 to $.23. Shares of Immucor were trading at $21.43 at midday on Tuesday. The firm did not say when it expects the deal to close.
 
According to Immucor President and CEO Gioacchino De Chirico, the firm envisions making BioArray Solutions’ platform the central piece of an automated system that will eventually succeed its current blood-screening platform, called Galileo. The Galileo, launched in 2002, can test 224 samples in a single run. Last year, the firm, which markets its products to blood-donor centers and large hospital labs, began selling a lower throughput version of the Galileo, called Galileo Echo, which can test 20 samples simultaneously.
 
The Galileo uses Immucor’s solid-phase, microplate-based technology for automated antibody screening and identification assays. De Chirico said during a conference call last week to discuss the acquisition that BioArray Solutions’ array technology will enable Immucor to introduce a high-throughput system that will put it ahead of rivals in the blood-testing market, such as Ortho-Clinical Diagnostics, a Johnson & Johnson company.
 
“The competition is not there and this is great news,” he said. “They have a 20-year-old technology that is obsolete.”
 
Ortho-Clinical targets the high-throughput blood-screening market with a microplate-based system called Vitros. The firm also offers a blood-grouping and Rh typing assay that uses gels and pipettes as well as other assays that compete against the Galileo.
 
Ortho-Clinical did not respond to an e-mail seeking a response by press time.
 
“One of the reasons we have decided to go in this direction is the [array] format,” De Chirico said. “We can do 96 chips at a time — something that you cannot do with a capture technology.”
 
BioArray Solutions’ technology provides 4,000-feature arrays in automated 8- and 96-chip formats. Contributing to its attractiveness to Immucor is the firm’s IP portfolio of 100 issued or pending US patents, the fact that the company has a Food and Drug Administration-approved blood-screening assay, and that it has placed its Array Imaging System in several blood banks in the US, according to De Chirico.
 

“The competition is not there and this is great news. They have a 20-year-old technology that is obsolete.”

In 2005, Warren, NJ-based BioArray Solutions received 510(k) clearance to sell its extractable nuclear-antigens immunoassay, which profiles six antibodies associated with autoimmune diseases and connective tissue disorders, including systemic lupus erythematosus, mixed connective tissue disease, Sjögren's syndrome, scleroderma, and myotisis (see BAN 6/22/2005).
 
The company also has developed an assay for human erythrocyte antigen screening, which provides 18 biomarkers on a substrate to screen for blood group antigens in the Duffy, Kell, Kidd, Lutheran, MNS, Dombrock, and other blood group systems as well as a mutation associated with sickle cell disease. In addition, its systems have been placed in labs at the University of Southern California and at the New York Blood Center.
 
De Chirico said during the call that the HEA chip will be among the first assays Immucor introduces for use on its automated system. He said that BioArray Solutions also has a product in development for Rh factor variance screening for preventing Rh disease in newborns.
 
“One of the largest fields of genotyping will be to prevent Rh alloimmunization of pregnant women,” said De Chirico. He estimated the market for such a screen to be between $5 million and $10 million per year. BioArray Solutions is also developing an early-stage human platelet-antigen screen for use in blood transfusions, he said.
 
“When we talk transplantation, we talk about stem-cell transplantation or organ transplantation; that is a field that is a natural expansion for Immucor because the customers in some countries are the same,” said De Chirico. However, he said that the firm is not committed to using BioArray Solutions’ microarray platform in the area, but rather identified it as “an area of interest.” 
 
He did not give a potential launch date for the array-based automated screening system, though he hinted that it may take about three years after the BioArray Solutions acquisition closes. “We started developing the Galileo in 1999 and we launched it in 2002,” he said. “We started developing the Galileo Echo in 2004 and we launched it in 2007. So if history tells us something, then that is the time line we are working with.”
 
De Chirico also said that customers who currently use Galileo will be best positioned to adopt the array-based next-generation system once it is launched. “Large volume customers like large hospitals or large donor centers,” he said.
 
DNA array-based applications “can also improve transfusion medicine by managing the availability of rare blood types for donor centers,” he added. “By adopting this technology, donor centers may create libraries of fully typed blood donors for what we call extended donor phenotype. This will aid in selecting units to be transfused.”
 
De Chirico said Immucor is prepared to invest between $12 million and $14 million a year on research and development to bring the platform to market. “We believe that we will break even a year after we launch the instrument and we will be accretive 24 months after we launch the instrument,” De Chirico said.
 
BioArray Solutions’ R&D team will play a central role in preparing the system for its market launch, and the firm’s existing partners, such as USC and the New York Blood Center, will also serve as early-access testing sites, De Chirico said.
 
He said that a key step in the development process will be using Immucor’s customers in Europe, where a less-stringent regulatory environment could make it easier for the company to debut its next-generation screening platform. Immucor already has offices that directly serve markets in Spain, Portugal, France, Italy, Belgium, The Netherlands, and Luxembourg.
 
“BioArray Solutions has done almost nothing internationally, so we want to go international with this technology,” said De Chirico. “Believe me when I say that the US is very resistant to change. If you look at the track record of all new technology, Europe gets it first, the US gets it last. So in Europe, for instance, we believe that they will be very receptive to this technology.
 
“Our plan is to expand the awareness and usage of [BioArray Solutions’] technology worldwide,” he added. He declined to provide further information on possible 510(k) submissions during the call.

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