A little over one month after Fisher Biosciences announced it would acquire high-content screening pioneer Cellomics for $49 million, Fisher has closed the deal and broken its silence regarding how Cellomics would fit into its future plans.
Specifically, technologies from several existing Fisher Bioscience companies — particularly the RNAi expertise of Dharmacon — could complement the ArrayScan and KineticScan, Cellomics' two main platforms for automated cellular imaging and analysis.
In the weeks since Fisher first announced the deal, it has become increasingly clear that Cellomics may help its new parent more quickly diversity its molecular biology offerings by pairing with and borrowing from existing in-house technologies, and give Cellomics — and Fisher — a leg-up against emerging HCS rivals GE Healthcare, BD Biosciences, and Beckman Coulter.
Most notable is Fisher's plan to pair HCS and RNAi. "There are some real potential utilities … using the high-content screening capabilities to monitor cellular states in response to inhibition of genes," Bill Marshall, vice president of technology and business development for Fisher Biosciences, told CBA News.
"There are some real potential utilities … using [Cellomics] high-content screening capabilities to monitor cellular states in response to inhibition of genes."
"We've shown that it's very important in target validation and identification," he said. "Moreover, we think it's going to be quite important in the future in terms of being able to facilitate quicker lead identification for other drug entities such as small molecules, antibodies, or things like this in providing a snapshot of what it looks like to inhibit a particular activity of interest."
Marshall, who previously was executive vice president of research and operations at Dharmacon, which Fisher acquired in February 2004, will now take on a broader role in his new Fisher Biosciences position, and help oversee interactions between several of Fisher's other technology divisions.
Matt Friel, senior vice president of corporate development for Fisher Scientific, told CBA News that several other Fisher business units will find some overlap with Cellomics' high-content screening chops — for instance, HyClone's cell-culture expertise, Pierce Biotechnology's protein science and labware, and AbGene's qPCR capabilities.
Friel also stressed that Cellomics will "continue to function as an ongoing business unit within Fisher, and will take advantage of the reagent capabilities of the other businesses as opposed to being consolidated into them."
A Piece of the Diversification Puzzle
Despite the overlap between Cellomics' technology and Fisher's reagents businesses, the acquisition is quite a departure from Fisher's past core business areas. However, according to Friel, it is one piece of a puzzle that Fisher is putting together to broadly diversify its biosciences offerings.
"Our entire biosciences group … has developed a technology roadmap," Friel said. "In each of the key modules of that roadmap, [we've] identified what the preferred means are of obtaining the capability, if we're lacking it, whether it's an in-licensing opportunity, acquisition, or otherwise, and within those general parameters have identified specific targets.
"One of the areas of very strong focus that's emerged in the technology roadmap over the last 12 months or so is cell imaging," Friel added. "And one of the obvious names was Cellomics, [which] we perceived to have the best technology, as well as the highest market share of instruments placed."
Fisher, echoing Cellomics' earlier pronouncements, thinks the company owns around 40 percent of the HCS-instrument market, though a January 2004 report from research firm Research and Markets said Cellomics had about a 45-percent market share. Research and Markets reiterated in a March 2005 survey of 75 HCS users that Cellomics' ArrayScan was the most common instrument purchased. Cellomics had about $13 million in revenues last year, most of which was derived from sales of instruments.
It is quite likely, however, that Cellomics' market share has recently declined, as a slew of comparatively larger companies — such as Molecular Devices, Evotec Technologies, BD Biosciences, and Beckman Coulter — made significant headway in 2004 by either introducing new HCS instruments or beefing up existing product offerings.
Meanwhile, Cellomics has made minimal changes to the hardware behind its instruments — though it has upgraded its informatics packages several times — instead choosing to live on the success of its early instrument designs, its strong intellectual property portfolio, and its reputation as the inventor of the field.
HCS customers might not necessarily be dissatisfied with Cellomics' hardware; nevertheless, Fisher said it plans to address the situation, primarily by cultivating a relationship with microscopy giant Carl Zeiss, which was Cellomics' largest shareholder and whose Apotome confocal-enabling optical grating is the key technological component of Cellomics' instruments.
"I would say that we'll be working hard to expand the product portfolio on the instrument side. The optics are a big part of this technology, and there are some proprietary Zeiss components within the Cellomics instruments, so we've got access to those," Friel said. "And we've also got access, on an ongoing basis, to improvements that Zeiss brings to the market.
"From a competitive positioning standpoint, a couple of the big players are already utilizing Cellomics' IP on a licensing basis," Friel said, referring to GE Healthcare and BD Biosciences, both of which license Cellomics' IP for their HCS businesses. These companies have "some success on placements, and we'll obviously benefit from that," he added. "We believe we will also be able to [sell] a number of our reagents through those placements."
Another of Fisher's challenges will be maintaining Cellomics' HCS market share by selling new instruments. Clearly the ability to package several categories of reagents with the ArrayScan or KineticScan gives Fisher a leg up, but the company currently lacks a significant sales force for high-end laboratory instrumentation.
"Clearly the kind of instrumentation Cellomics has is a little different than the traditional products we've sold through our other channels — although, in some of those areas, like the immunohistochemistry market and anatomical pathology, we do sell relatively high average-selling-price pieces of equipment," Friel said. "So we do have some selling capability in-house that has the right skill set."
But, he added, Fisher will depend primarily on Cellomics' existing sales and marketing force to further drive instrument sales, and, to a lesser extent, on Zeiss, which has served as a sales, marketing, and distribution agent for Cellomics in "select" global markets.
"It's our intention to leverage that channel very aggressively," said Friel. "We've got a number of other areas where we're looking to cooperate with Zeiss, and we think that's going to be a very strong part of our sales and distribution strategy."
Fisher also said that layoffs at Cellomics are very unlikely, and, quite the opposite, Fisher's post-acquisition plans may actually infuse the Cellomics sales force with new blood.
"At this point, the perspective on the business is that we bought it as a new technology, but we did not buy it as a consolidation play of any sort," Friel said. "We would expect to leverage all the resources that Cellomics has in-house now. Obviously when they went through the technology slump in the early 2000's, they reduced headcount pretty significantly. So I think we've inherited a business that is staffed appropriately, and if anything, I think we'll be adding resources in select areas."
— Ben Butkus ([email protected])
Will Cellomics Acquisition Hamper Partnership Between Fisher's Dharmacon and GE Healthcare?
According to recent reports by CBA News and sister publication RNAi News, GE Healthcare and Fisher Scientific subsidiary Dharmacon have been working together since at least the beginning of the summer to develop high-throughput functional genomics applications using Dharmacon's RNAi technology and GE Healthcare's IN Cell 3000 high-content screening platform (see CBA News, 5/23/2005; and RNAi News, 5/20/2005).
But will Fisher's acquisition of Cellomics, a direct competitor of GE Healthcare in the HCS arena, change things?
It appears as if the answer, for now, is no.
Dharmacon remains mum about any possible formal partnership with GE. Last week, Bill Marshall, former executive vice president of research and operations for Dharmacon and current vice president of technology and business development for Fisher Biosciences told CBA News that "clearly our discussions with GE Healthcare are simply ongoing in this area." He declined to comment further on negotiations.
According to GE Healthcare officials, the two companies continue to collaborate in an informal manner.
"We continue to have a great relationship with Dharmacon to develop high-content cell analysis platforms that enable high throughput siRNA studies for target identification and validation," Ger Brophy, vice president of product acquisition and licensing at GE Healthcare wrote in an email to CBA News. "We've developed very good initial data on our IN Cell system identifying and quantifying specific cell cycle effects using our GFP live cell assays and the Dharmacon siArray technology. This combination of stable cell or viral assay formats with siRNA knockdown is generating high quality, contextual information. We're very proud of the work that has come out of the relationship with Dharmacon and anticipate this initiative will continue to bring value to high-content cellular analysis."