Even as BioStatus develops new assay reagents like CyGel and seeks partners to more quickly bring it to market (see related story, this issue), it continues to court offers for a buyout driven primarily by the value of DRAQ-5, its flagship nuclear counterstain reagent for cellular assays, CEO Stefan Ogrodzinski told CBA News recently.
In April, Ogrodzinski told CBA News that a "big company" had offered to acquire BioStatus in "early- to mid- 2004," but that BioStatus did not perceive the purchase price as fair value (see CBA News, 4/12/2005).
That offer is still on the table, Ogrodzinski said earlier this month, but BioStatus continues to hold out for a suitor that may recognize the potential of DRAQ-5 across several application areas, from drug discovery to diagnostics to agricultural sciences. BioStatus' only suitor so far presumably plays in the cellular analysis space — Ogrodzinski did name Invitrogen and GE Healthcare as companies that are interested in the dye for those reasons — and BioStatus may need to do more work before it can convince others of DRAQ-5's wide applicability.
"We've identified 14 large organizations across the markets we're in," Ogrodzinski said. "Because we have a DNA dye that is very useful across research, clinical, drug-discovery, and [agricultural] markets, who then, can give us the best price? Who plays in all of those markets? There aren't many — some are clinical focused, some are toolkit focused. It's quite rare, but they do exist."
"Because we have a DNA dye that is very useful across research, clinical, drug-discovery, and [agricultural] markets, who then, can give us the best price? Who plays in all of those markets?"
Ogrodzinski declined to comment on either the value of the offer it was made last year or the amount that BioStatus might be holding out for.
"At that time, we were describing what we had in the pipeline, and a lot about potential, but the valuation was primarily based on DRAQ-5," he said. "Again, you've got to have someone that's more far-sighted."
So for the time being, BioStatus will be working to better market itself and its products in order to attract sharks. Furthermore, since it appears suitors aren't yet beating down the door, BioStatus may be faced with having to re-think an exit strategy.
"We think we can increase the value of our company by demonstrating through turnover that our products do have a place in the market and can bring significant advantages to current protocols and methods," Ogrodzinski said. "We're looking for either a large company that recognizes our potential and will give us what we need to exit now, or perhaps an intermediate company that actually has the organizational strength to take what we have and grow it into something that is much more valuable that can be eventually sold off.
"We need to either grow organizationally, which we are beginning to do, or we can find someone entrepreneurial enough to take this up," he added. "Nothing speaks louder than turnover, though. We really have to get our assays out there and prove a little more that DRAQ-5 can take the drug discovery market by storm."
The company took a significant step toward increasing its name recognition last month, when it hired 20-year biotech industry vet Roy Edwards as its new sales and marketing director. Furthermore, the company plans to expand its portfolio of reagents based on DRAQ-5.
"Our core patents cover a class of compounds associated with DRAQ-5, and we've produced the first derivative, which is ApopTrak, which has groups that impede its access into cells," Ogrodzinski said. "So this is a positive discrimination of a dead and live cell population. And we'll have several other variants of DRAQ-5 being launched shortly, including one very shortly. Those will predominantly have application in drug discovery."
— Ben Butkus ([email protected])