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Invitrogen Enters Hepatocyte Market With $57M Acquisition of CellzDirect

Invitrogen this week announced that it plans to acquire privately held CellzDirect, a hepatocyte-focused products and services company, for approximately $57 million in cash.
The transaction, expected to close before the end of March, gives Invitrogen a toehold in the growing hepatocyte market, which is estimated to be worth around $2 billion, and expands its presence in what a company official considers the higher-margin, higher-growth areas of the cellular sciences market.
Liver biology is one of four “research focus areas” that Invitrogen laid out about a year ago, Nicolas Barthelemy, senior vice-president for cell systems at Invitrogen, told CBA News this week. He declined to name the other three, saying they are works in progress.
“Looking at who was really doing well in the hepatocyte space,” he said that Research Triangle Park, NC-based CellzDirect’s name “came up time and time again as being the leader.”
“On the research side, [Invitrogen is] trying to move [its] product mix from the traditional cell culture products, which is a market that is growing at a little slower rate, about 4 to 5 percent, towards [primary cell and stem cell] culture, or protein expression in primary and stem cells, which is a market that is growing at a rate of about 12 to 15 percent,” said Barthelemy.  
He said that Invitrogen is trying to spur this growth organically and is investing “a fair amount of money” in R&D in primary and stem cell products and services. “Another way, which is always worth keeping an eye on, is inorganically through acquisitions,” Barthelemy added.
According to Barthelemy, “the plan is to first work with CellzDirect to understand the details of their business.” He said that Invitrogen wants to maintain CellzDirect’s growth trajectory and momentum, as well as the capabilities that the company has developed over the last few years.

“[Invitrogen is] trying to move [its] product mix from traditional cell culture products … towards [primary cell and stem cell] culture.”

“These capabilities, especially on the service side of the business, are very much linked to CellzDirect’s people and their knowledge of the market and the customers,” said Barthelemy.
He added that Invitrogen was “very impressed by the CellzDirect management team, both on the scientific side and the business side, so [it] plans to keep the team whole for the most part.”
Barthelemy said Invitrogen sees two trends in the marketplace on the research side. One is that more of its customers are moving toward more predictive systems. Traditional cell lines studied in vitro “are not very predictive in terms of models and how they respond to new drugs and drug targets” as opposed to screening drug candidates and potential druggable targets in vivo,” he said.
Barthelemy said that Invitrogen sees its customers using primary cells more and more because they are a lot better than traditional cell lines at predicting how a real organism or organ — the human liver in the case of CellzDirect — might respond to a compound.
The second trend is that Invitrogen’s research customers “are moving more and more towards [out-of-the-box] systems,” said Barthelemy. “They no longer want to assemble a set of tools, including the primary cells, the media, the supplements, and the matrices, when they run experiments; they want to have the full solution out of the box as much as possible so they can focus on getting the results as opposed to assembling the solution.
“We see that by marrying the two we can produce something that our customers can really appreciate and will be willing to purchase,” Barthelemy said.
CellzDirect did not respond to a request for comment before deadline.

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