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Accelrys Buys VelQuest for $35M to Tap Into Market for Regulatory Compliance Software

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By Uduak Grace Thomas

Accelrys has acquired privately held VelQuest, a developer of software systems for use in federally regulated lab environments, for $35 million.

The all-cash acquisition will allow Accelrys to extend its product portfolio beyond research and development into late-stage product development and quality control, where compliance with the US Food and Drug Administration's Good Manufacturing Practices is required, the company said.

Accelrys' President and CEO Max Carnecchia told BioInform this week that while it's too early to discuss its integration roadmap in detail, the company plans to build on an existing integration between Symyx Notebook by Accelrys and VelQuest's SmartLab software, as well as to explore methods of integrating Accelrys' Pipeline Pilot with SmartLab and other tools in VelQuest's portfolio.

Hopkinton, Mass.-based Velquest markets a set of so-called procedure execution management products — SmartLab and SmartBatch — which are designed to automate laboratory test procedures while complying with federal requirements for data capture, documentation, review, and transfer.

VelQuest's products, which include tools for lab information management, lab execution, batch record execution, and electronic data capture, are being used in the pharmaceutical and biotechnology industries, where they govern activities that require standardized steps such as clinical trials, centralizing stability testing for expiration dating, as well as quality control for new products, Ken Rapp, VelQuest's president and CEO, explained to BioInform.

Carnecchia said that the companies have installed integrated versions of their tools in a number of customer sites, including Johnson & Johnson, AstraZeneca, and Bristol-Myers Squib. He added that the acquisition allows the firms to "productize" their combined offerings under a single brand.

All VelQuest's 45 employees, including its management team, have joined Accelrys, bringing its total headcount to about 600 workers, Carnecchia said. He added that the company doesn’t "anticipate any significant changes" to VelQuest's internal workings and the company will retain its Massachusetts headquarters.

He also said that VelQuest's marketing arm will be paired with Accelrys' field sales team to provide support for overlapping customers as well as to add new customers for product lines from both companies.

Additionally, the enlarged customer pool will help VelQuest better penetrate other markets beyond life sciences, Rapp noted in a statement.

These could include medical devices; food and beverage; dietary supplements; animal drug and feed; and cosmetics industries, the officials said.

Meanwhile, current VelQuest customers can expect to receive their software as usual, as well as to continue to work with their existing contacts during the integration process, Carnecchia said.

Accelrys noted that VelQuest's tools reduce resources needed for paperless analytical and quality operations, including analyst data acquisition and documentation, data review, supervisor approval, QA investigations, audits and releases.

Furthermore, the purchase fits in with Accelrys's strategy to position itself as a software provider that encompasses the entire research and development "value chain" — a plan that pre-dates the company's 2010 merger with Symyx, Carnecchia said (BI 07/02/2010).

Accelrys's merger with Symyx and its subsequent integration activities (BI 3/4/2011), as well as its acquisition of Contur later last year (BI 5/27/2011), "beefed up" the company's efforts in the research and discovery area, he said. Now that it has added VelQuest's offerings to its software cache, the company has a presence in the quality assurance and quality control arenas as well, he said.

Accelrys doesn’t see its latest purchase as a departure from the research and development software market where it has played historically. Rather, the move is in response to changes in customer activities fueled by "market dynamics and market trends" that are causing these companies to "rework" their research and development activities, Carnecchia said.

"We believe that [customers] need a more unified and integrated set of software tools," he said. "Our vision and the strategy ... is to organically and inorganically assemble an open standards-based platform that allows us to integrate with what they have [and] to ... take them to where they need to go."

VelQuest's Rapp told BioInform that he believes the company's SmartLab technology occupies a unique spot in the marketplace where there are no direct competitors that offer similar capabilities.

He added that most organizations that aren't using his firm's systems typically deploy paper-based methods of tracking their procedures or modify laboratory information management systems to suit their purposes.

Accelrys expects the acquisition to be slightly dilutive to its full-year 2012 non-GAAP net income per share. The company will give detailed full-year 2012 guidance when it presents its fourth-quarter 2011 financial results.


Have topics you'd like to see covered in BioInform? Contact the editor at uthomas [at] genomeweb [.] com.

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