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Nanogen, Elitech Group, Agilent Technologies, Illumina, Isogen Biosolutions, Ocimum Biosolutions, BioForce Nanosciences, Aspera

Nanogen to Merge with French Dx Firm Elitech in Reverse Acquisition
Nanogen said last week that it has signed a merger agreement with Paris-based diagnostic firm the Elitech Group that is structured as a reverse acquisition of Nanogen by the privately held Elitech.
Under the terms of the agreement, Nanogen said that Elitech shareholders are expected to receive shares of Nanogen common stock valued at €66.5 million ($98.5 million).
Last Thursday, the day the merger was announced, Nanogen had a market capitalization of $32.8 million and its shares were trading at $.44. A Nanogen spokesman said the company will issue new shares to cover the balance of the value of the purchase agreement.
The name of the combined company has not yet been determined, but it will continue to be listed on the Nasdaq exchange, Nanogen said. The combined company will be headquartered in San Diego, where Nanogen is currently based.
The company said that the merger, expected to close in the first quarter of 2009, will combine Nanogen's experience in molecular and point-of-care diagnostics with Elitech’s global manufacturing, sales, and distribution of in vitro diagnostic products for the clinical chemistry and microbiology markets.
Expected first-year revenues for the combined firm will be more than $150 million.
Elitech Group has around 260 employees. For the fiscal year ended March 31, 2008, it posted revenue of €47.5 million ($70.4 million).
Nanogen reported revenues of $38.2 million for its 2007 fiscal year and has forecast full-year 2008 revenues of approximately $48 million. The merged company is expected to benefit from “significant operational synergies,” Nanogen said, including cost reductions in sales, marketing, manufacturing, and development.
As part of the agreement, Nanogen has also entered into an interim funding agreement with Elitech and “certain existing Nanogen investors,” under which they will loan Nanogen $8 million to fund operations prior to the close of the acquisition.
In exchange, Nanogen will issue senior secured convertible promissory notes that are convertible into shares of Nanogen stock at the closing bid price immediately preceding the signing of the interim funding agreement.
Nanogen said that the boards of directors of both companies unanimously approved the merger agreement.
Pierre Debiais, president of Elitech, will serve as CEO. Howard Birndorf, Nanogen's chairman and CEO, is “expected” to serve as chairman of the combined entity.
Michael Saunders, group vice president of marketing and business development for Elitech, will become COO, with a focus on European business and global commercial operations. David Ludvigson, president and COO for Nanogen, will also serve as COO, with a focus on the US business and global business and finance.
Nick Venuto, currently vice president and CFO of Nanogen, will serve in the same capacity for the combined entity.

Agilent's Bio-Analytical Revenues Rise 13 Percent in Q3, Arrays up Nearly 50 Percent
Agilent Technologies said last week that “robust growth” in its Bio-Analytical business unit helped drive overall revenue growth of 5 percent for its third fiscal quarter of 2008.
For the quarter ended July 31, 2008, Agilent’s total revenues grew to $1.44 billion from $1.37 billion in the comparable period of last year.
Bill Sullivan, Agilent’s president and CEO, said in a statement that the company’s total third-quarter revenues “came in at the low end of our expectations.”
Bio-Analytical revenues increased 13 percent to $566 million from $500 million in the prior-year period. Revenue growth for the segment was 10 percent, excluding the company’s acquisitions of Stratagene and Velocity11.
Within the Bio-Analytical group, revenues for the Life Sciences business segment rose 18 percent to $247 million. Excluding acquisitions, life science revenues were up 11 percent.
Agilent said that life science sales to pharma and biotech increased 14 percent year-over-year, with “modest growth in the Americas and Europe and a strong performance from Asia.” Sales to the academic and government markets increased 36 percent, “with particular strength in microarrays, which were up nearly 50 percent.”
Geographically, Bio-Analytical revenues increased 15 percent in the Americas, 5 percent in Europe, and 23 percent in Asia, Agilent said.

Illumina Nets $340M in Public Offering
Illumina said last week that it has raised net proceeds of $342.6 million in a public stock offering.
The company said that it sold 4,025,000 shares at $87.50 per share in the offering, which was managed by Goldman Sachs.
Illumina plans to use the proceeds from the offering to fund R&D efforts, expand its manufacturing capacity, and for working capital needs. The company said that it may also use the financing to acquire, license, or invest in other businesses, technologies, or products (see BAN 8/12/2008).

Isogen Biosolutions Rebranded as Ocimum Biosolutions
Ocimum Biosolutions of Hyderabad, India, said last week that its Isogen Biosolutions oligonucleotide-synthesis business based in Ijsselstein, the Netherlands, will now operate under the Ocimum name.
Ocimum acquired the oligo business from Isogen Life Science in 2006. Since that time, it has operated the unit under the Isogen Biosolutions name (see BAN 11/21/2006).

BioForce Nanosciences Inks Licensing, Equity Agreement with Spinout Aspera
BioForce Nanosciences Holdings said last week that it has signed a licensing and equity agreement with Aspera, a startup founded by former employees of BioForce with the goal of developing miniaturized biomolecular detection systems for point-of-care diagnostics.
Under the terms of the agreement, BioForce licensed several of its technologies to Aspera on a non-exclusive basis, including its ViriChip, Chip-on-a-Tip, and CellWell diagnostic and detection systems, in exchange for royalties on any revenue generated by Aspera from the licensed technology.
Aspera’s founders were involved in the development of the licensed technologies. BioForce said that four of its employees who were involved in the development of the systems, as well as governmental grants supporting the development of the technology, will be transferred to Aspera.
In addition, BioForce said it will take a 19 percent equity interest in Aspera.
Greg Brown, CFO of BioForce, said in a statement that the transaction, “along with other organizational adjustments which have been recently made, reduces our net cash expenses by approximately $500,000 per year,” or approximately 20 percent.
“Realizing meaningful cost savings via this transaction with Aspera, as an alternative to curtailing some or all research and development activities on the scientific applications in order to achieve the cost savings, was a much better alternative for our shareholders,” he added.

The Scan

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