German drug-discovery instrument manufacturer CyBio this week acquired a majority stake in lab-automation specialist Accelab in an attempt to strengthen its position in the high-throughput screening market and bolster its US sales figures.
The investment is the latest in a series of moves by CyBio to cultivate a more powerful HTS market presence, the most notable of which is a pending OEM deal for Corning's soon-to-be-launched Epic label-free biological detection system (see sidebar).
Terms of the Accelab agreement call for CyBio to acquire approximately 78 percent of privately held Accelab's shares, with the remaining shares going to Accelab executive management and "leading employees," CyBio said. CyBio did not disclose a purchase price for the shares. The company noted that Accelab is expected to earn more than €4 million ($5 million) in revenues in 2006, which is around 30 percent of the revenue CyBio generated in 2005.
Based in Kusterdingen, Germany, Accelab provides laboratory automation instrumentation, software, and consulting to the pharmaceutical, chemical, cosmetics, and food industries. A particular strength of the company, according to CyBio, is its expertise in the dosing of solid particles and liquids, which is highly complementary to CyBio's instrumentation platforms for high-throughput biochemical and cell-based assays.
"We currently focus [primarily] on the HTS market," CyBio CEO Sonja Strauss told CBA News this week. "We get more and more requests daily from customers on automation issues."
"It doesn't make so much sense to partner with a direct competitor for additional know-how. We will continue to look for competencies with which we can partner, jointly venture, or even merge."
According to Strauss, CyBio has had a fully automated screening lab incorporating its CyBi flash luminescence plate readers, liquid handlers, and plate handlers on the market since 2000. The platform also incorporates incubators from companies such as Liconic and Thermo unit Kendro and detection devices from other vendors.
"But this topic of integration came up very strongly over the last two to three years, and we decided that it would be a good path to add additional competency to what we currently do — especially in automation, integration, robotic know-how, and special software for bigger integration projects" — all specialties of Accelab, Strauss said.
She said that Accelab also sells a "state-of-the-art software tool" that is highly modularized for controlling multiple laboratory devices, which will be incorporated into CyBio's offerings.
According to Strauss, CyBio's products have "recently been moving quickly toward cell-based assay" applications, and the Accelab acquisition reflects the German company's goal of increasing its presence in the high-throughput drug screening market, and in particular the cell-based assay arena.
Early last year, for example, CyBio penned a deal with Italian biotech Axxam to co-market its readers with Axxam's Photina photoprotein for conducting cell-based flash luminescence assays (see CBA News, 2/15/2005).
Then, the following March, CyBio struck a deal with biotech firm Liconic that made CyBio the exclusive marketer of Liconic's cell incubators in France and, perhaps more importantly, gave it the right to integrate Liconic's incubators and hotels into CyBio's equipment.
Strauss said that CyBio also works closely with Thermo's Kendro unit so that CyBio customers can use that company's incubators, although CyBio and Kendro do not have an official agreement in place.
Strauss also said that CyBio is steadily increasing its presence in the US drug-discovery market. Though its biggest sources of current revenues are customers in Europe — especially its home country — CyBio is "comfortable with our sales group on the East coast of the US, but we are currently increasing our sales force in California," she said.
CyBio's US sales nearly doubled in 2005, according to the company's 2005 earnings release in March. This was in large part due to new customers at public research facilities, the company said.
CyBio did not break out exact sales figures for the US. Total revenues for the company in 2005 were €14.3 million. Germany alone accounted for approximately 17.4 percent of these receipts, Europe generated 35 percent, North America garnered 41.5 percent, and Asia drew 6.1 percent.
Strauss said that CyBio considers its closest competitors to be Beckman Coulter and Velocity11, particularly in the US and on the liquid- and plate-handling side; and PerkinElmer and Tecan on the detection instrumentation side.
As most of these firms have a significant sales and marketing presence both in the US and Europe, CyBio hopes to continue assimilating expertise from smaller firms to help it compete.
"I would say that it is difficult for a company our size to partner with a Beckman or PerkinElmer," Strauss said. "We're looking more toward complementary know-how in our partnering. It doesn't make so much sense to partner with a direct competitor for additional know-how. We will continue to look for competencies with which we can partner, jointly venture, or even merge."
— Ben Butkus ([email protected])
On the Road to an Epic Deal
Perhaps the biggest feather in CyBio's cap for both increasing its drug-discovery play and its US presence has been an ongoing R&D agreement and pending commercial production contract with Corning Life Sciences.
The companies have been working together under the radar at CyBio's Jena facilities since 2003 to develop the Epic label-free biological detection system, CBA News learned this week. The platform, which features waveguide optical sensing as the central technology, was originally designed for high-throughput biochemical assays, but is also expected to enable several types of label-free high-throughput cellular assays, Corning told CBA News in November (see CBA News, 11/28/2005)
As part of the deal, Corning has been paying CyBio an undisclosed amount to participate in the partnership. In its 2005 annual report, CyBio said that the development of the Epic system has been a "significant" source of revenue for the company since it penned the Corning alliance two years earlier. This cash flow swelled last year when the companies designed and delivered prototype instruments to several early-access customers.
CyBio said in a recent statement that it expects Epic to formally launch this September at an undisclosed "high-profile trade show in the USA," which most likely refers to the Society for Biomolecular Sciences conference being held that month in Seattle. Corning has also been maintaining a fall 2006 launch for the product.
Also in its 2005 annual report, CyBio said it will begin manufacturing the Epic system in Jena in the fall, which will substantially diminish R&D activity at that site. CyBio and Corning will continue to optimize the platform together following its commercial launch, the company said.
It is unclear how long this commercial production agreement will remain in place. A spokesperson for Corning declined to comment immediately. Calls to CyBio were not returned in time for this publication.