PerkinElmer, which agreed to acquire Packard Bioscience in a $650 million stock deal announced July 16, said it valued Packard’s liquid handling and sample preparation capabilities but was also interested in using Packard’s biochip instrumentation for protein chips.
"We are as excited about the biochips technology — the arrays, scanners, etc., — as we are about fluid handling," said Patrik Dahlen, president of drug discovery at PerkinElmer. Dahlen added that the acquisition would serve as a good starting point to build a protein chip production and services business for PerkinElmer.
Packard Biosciences’ wholly owned subsidiary Packard BioChip Technologies, based in Billerica, Mass., manufactures three arraying instruments, the high-throughput SpotArray Enterprise system and Biochip Arrayer, which utilize its PiezoTipnology non-contact printing technology, and the smaller SpotArray 24 microarray pin-tool printing system. The company, which acquired the life sciences division of GSI Lumonics in August 2000, also manufactures a ScanArray microarray imaging system with technology from this company.
Packard has licensed its PiezoTipnology printing technology to Motorola for use in that company’s biochip program, and has signed a collaboration with Oxford GlycoSciences and Cambridge Antibody Technology to develop a protein chip.
The company had signed an initial agreement with Aclara Biosciences to distribute Aclara’s LabCard microfluidics chips, but cancelled this deal in January. The company also cancelled initial plans to make its own DNA chips, but has said it is continuing with its protein chip plans.
PerkinElmer’s life sciences division currently produces MicroMax cDNA arrays for human genes, ion channels, transcription factors, oncogenes and tumor suppressors, human kinase and phosphatases. The company also exclusively distributes Genomic Solutions’ GeneTac arraying instruments and imaging systems outside of the US and Japan, and produces lab supplies and reagents that can be used for microarraying.
It is not yet clear how the two companies will combine their biochip efforts, but Packard has indicated that the merger could help the company more effectively pursue its broad-ranging approach to the sector.
Packard’s biochip strategy thus far has been to attack the market with "a three pronged thrust," Wayne Richardson, Packard’s director of investor relations, told BioArray News. "It’s to make the instruments, to make the chips, and to make the scanners and services to read the chips."
During the due diligence proceedings leading up to the merger, Richardson said the companies found similarities in technology that the combined company "would be able to exploit," and that it would be "much more efficient to use the R &D money by combining the efforts of two companies."
This merger could impact PerkinElmer’s distribution agreement with Genomic Solutions, as Genomic Solutions GeneTac systems directly compete with Packard’s arraying and scanning instruments. But as "the dust is still in the air at the moment," said Richardson, the combined company has not decided how it will resolve this issue of selling both its own product and a competing technology.
Under the terms of the deal PerkinElmer of Boston will exchange 0.311 share of its common stock for each share of Packard BioScience common stock. The deal, which is expected to close in the fourth quarter, also includes net indebtedness.
Packard BioScience, based in Meriden, Conn., has approximately 1,000 employees and sales in 60 countries in North America, Europe, and Asia. The company expects revenues of approximately $200 million in 2001, partly from the $170 million sale of its nuclear instrumentation company Canberra, which it completed in February. In late April, Packard withdrew a proposed $41.25 million follow-on offering due to market conditions.
There are currently no plans to lay off employees as a result of the acquisition, according to Dahlen, though he did not discount the possibility.
In the interim period before the acquisition is complete, the two companies plan to conduct "business as usual" in the immediate future, said Richardson. "Whether we like it or not there is always a finite possibility that not all deals go through," he said.
— MMJ and KH