The story has been updated to include comments from an investment analyst.
NEW YORK (GenomeWeb News) – Qiagen announced on Sunday it has agreed to buy Australian biotech firm Cellestis for A$341 million ($355 million) in cash.
The deal, under which Qiagen will pay A$3.55 for each outstanding common share of Cellestis, provides Qiagen with access to Cellestis' QuantiFeron technology for detecting and monitoring disease, including the commercially available QuantiFeron-TB Gold-in-Tube test for latent tuberculosis, as well as the Quantiferon-CMV test for cytomegalovirus, which is in the early stages of commercialization.
In a statement, Peer Schatz, CEO of Qiagen, said, "We believe next-generation DNA- and RNA-based molecular testing can benefit from greater use of QuantiFeron technology, which has a unique ability to identify patients at risk from potentially life-threatening diseases.
"The power of QuantiFeron can help save lives by enabling medical treatment through earlier, deeper, and much more sensitive disease detection than previously possible,” Schatz added. "We believe the addition of Cellestis will further strengthen our capabilities to offer innovative sample and assay technologies that are making improvements in life possible."
Cellestis is based in Melbourne, Australia and its QuantiFeron technology is a method for detecting cell-mediated immune responses of T-cell lymphocytes using whole blood samples.
According to the firm, QuantiFeron is considered a "pre-molecular" testing technology because it has the capability to provide diagnostic information "far earlier than DNA-based molecular tests." As a result, tests based on the technology can provide information on latent infections when DNA-based tests cannot because of the low amount of pathogens present in the infection.
Because of this ability, QuantiFeron can complement Qiagen's portfolio of molecular diagnostics by guiding and driving the use of DNA- and RNA-based molecular tests.
"For example, patients identified through QuantiFeron-based tests to be at risk for certain diseases could then proceed for subsequent testing or increased monitoring with corresponding DNA- or RNA-based molecular diagnostics to assess disease activity levels and guide treatment decisions," the two companies said.
In addition to the tests for latent tuberculosis and cytyomegalovirus, Cellestis has developed an "extensive" R&D program based on the QuantiFeron technology to target other diseases, the company said.
In fiscal 2010 ending June 30, 2010, Cellestis posted receipts of A$40.4 million, a 17 percent increase year over year. The QuantiFeron tuberculosis test, launched in 2006, accounts for the majority of current sales, Cellestis said.
Benefits offered by the test include accuracy and a "significantly" improved workflow over the current standard, the tuberculin skin test, the firm said. Most DNA tests cannot detect for latent TB, according to Cellestis.
The test has been approved in the US as a pre-market approved test, as well as in Europe, where it is CE marked, Canada, and Japan.
The QuantiFeron cytomegalovirus test was launched in 2009 and is the first commercially available test that allows physicians to monitor a person's risk for the disease. Cellestis added that the test complements Qiagen's DNA-based molecular diagnostic tests for CMV viral load, and is expected to be synergistic with Qiagen's test for transplantaion medicine.
The company noted that the Dutch MDx firm plans to submit a PMA submission to the US Food and Drug Administration sometime this year for the artus RG PCR CMV test.
The QuantiFeron TB test will also enhance Qiagen's real-time PCR and pyrosequencing DNA molecular diagnostic detection technologies, Cellestis said, and added that the QuantiFeron technology will be adapted for use with Qiagen's ESE detection technology, a mobile device that runs on battery power. In particular, the QuantiFeron TB test will be developed so that it can be used for the testing of latent TB in areas without immediate access to a laboratory.
Upon completion of the deal, Qiagen will migrate the QuantiFeron technology onto its QIAensemble and QIAsymphony platforms, as well as point-of-care testing platforms acquired from ESE, "thereby adding a new, unique assay menu to these Qiagen platforms," Schatz said.
Qiagen's offer represents a 24 percent premium over the average share price of Cellestis during the month prior to the offer, a 32 percent premium over the three-month period prior to the offer, and a 39 percent premium over Cellestis' share price over the prior six-month period prior to the offer, the firms said.
Qiagen is paying for the deal with existing cash, it said. On an adjusted basis, the purchase is anticipated to be mildly dilutive to full-year 2011 EPS, due to planned large investments in sales and R&D initiatives related to the migration of Cellestis' products to Qiagen's platforms, and for new product development.
For 2012 Qiagen said that it expects double-digit sales growth from QuantiFeron products and accretion of $.02 to $.03 per share to EPS.
In a research note, Peter Lawson of investment firm Mizuho Securities said the investment community had expected Qiagen, which has about $935 million on its balance sheet, to make an acquisition. The deal, he wrote, "fits with the high growth, high multiple acquisitions selected by management. While near-term dilution of a few pennies and the premium valuation are not positives, we believe the announcement removes the acquisition overhang for the stock, and long-term accretion and growth are a positive."
Lawson raised the 12-month target on Qiagen's shareprice to $24 from $20.
Barclays Capital is the exclusive financial adviser on the deal, and Freehills is the legal adviser to Qiagen related to the transaction.