During a conference call earlier this week to discus its third quarter 2013 results, Qiagen officially confirmed that it has bought privately-held CLC Bio, a bioinformatics company headquartered in Aarhus, Denmark.
Qiagen did not disclose the financial details of the transaction on the call nor did it discuss its plans to integrate CLC Bio's products with its existing portfolio, which includes intellectual property it acquired when it purchased Ingenuity for $105 million earlier this year (BI10/25/2013). Qiagen officials told BioInform after the call that the company will work with representatives from both Ingenuity and CLC Bio on an integration road map for the product and on branding.
They also said that all of CLC Bio's roughly 100 employees, including the management team, will join Qiagen's staff and will continue to work out of their existing offices in Aarhus – where most of its software development work occurs – and Boston – where the company has set up a sales unit.
Qiagen also confirmed on the call what some in the life science community had already surmised: that it bought the bioinformatics vendor to complete an informatics portfolio that it is building for the next-generation sequence analysis market that will provide tools to analyze data coming off of sequencers and to interpret variants.
"This acquisition is a natural logical step after Ingenuity," Qiagen CEO Peer Schatz said during the earnings call. CLC Bio and Ingenuity's products, he said, provide the "core elements" that Qiagen needs for its NGS offering, and that combining the products "further strengthens our ability to create a unique experience for our customers with seamless links to these engines for data analysis, interpretation, and reporting."
He added that "we see dynamic growth opportunities for [the CLC Bio] products and bringing them into our NGS portfolio will greatly enhance our overall offering."
Qiagen is adopting a two-pronged informatics marketing strategy that will involve offering software from both companies for use with any next-generation sequencers currently available on the market, as well as marketing a specialized analysis workflow tailored to its GeneReader benchtop NGS sequencer, currently in late-stage development.
"That's a very important part of our strategy," Bettina Haedrich, Qiagen's director of business development, told BioInform. "On the one hand we want to provide tools [that] are platform-agnostic [and] can be used with all different sequencers and … on the other hand [we want to] optimize the workflow for GeneReader instrument and [our] assays."
Qiagen believes that informatics will be a profitable venture for the company. Ingenuity's products, for instance, have been licensed recently by the Icahn Institute for Genomics and Multiscale Biology at Mount Sinai School of Medicine and the Center for Applied Genomics at the Children's Hospital of Philadelphia (BI 10/25/2013), Haedrich said.
The company also recently launched the Empowered Genome Community, to provide individuals who've had their genomes sequenced with a secure collaborative environment within which to share data with one another and interpret it using the Ingenuity Variant Analysis software (BI 10/18/2013).
She noted that while a large swathe of the company's target customer base relies on open-source tools, there is "strong growth in the commercial bioinformatics market,” particularly from customers who don't have in-house informatics expertise and are in the market for standardized off-the-shelf solutions that are easy to use.
"Platforms like CLC Bio and Ingenuity enable biologists to do the data analysis. … It’s extremely easy to take the data and generate the information you need to identify and interpret mutations in the genome," she said.
Schatz also said during the call that Qiagen is talking with German software development firm SAP about using its Hana analytics platform for the analysis workflows it's developing. Qiagen and SAP inked a deal last year to work jointly on tools that would rely on Hana's technology to align genomic sequences and to identify mutations based on reference data.
Hana is an implementation of SAP's in-memory database technology, which stores and processes data in the computer's main memory. The platform has four components: the in-memory database management system; a suite of tools for modeling; an appliance version of the database management system; and a cloud-based infrastructure that can be used to deliver applications (BI 7/6/2012).
Responding to an analyst's question during the call about the SAP partnership, Schatz said that the firms were "accelerating these discussions,” which had been placed on hold until the CLC Bio acquisition went through "to see how we can use that new technology for our analysis solutions."
CLC bio was founded in 2005. Its solutions, which include the CLC Genomics Workbench and CLC Genomics Server, have been used in academia and industry in places such as the Flanders Institute for Biotechnology (BI 2/10/2012) and Sapphire Energy (BI 12/16/2011). Last year, the company was tapped to provide bioinformatics capabilities for 4DcellFate, a European Union-funded project to study the mechanisms involved in stem cell differentiation (BI 2/17/2012). It's also forged partnerships with hardware vendors such as IBM (BI 4/12/2013) and Convey Computer (BI 4/20/2012).
Finally, last year, CLC Bio dipped its toe into the drug discovery market by acquiring Molegro, a privately-held developer of molecular modeling software also based in Aarhus (BI 9/7/2012).
Qiagen does not expect CLC Bio to have a material financial impact on its results for 2013. Earlier this year, CLC Bio reported that it saw a 30 percent rise in software sales in 2012 compared to 2011 (BI 2/15/2013). According to Qiagen, the company's revenues were between $8 million to 10 million in 2013 . Regarding Ingenuity, Qiagen expects to report adjusted net sales in 2013 of approximately $15 million from Ingenuity. This figure accounts only for the remainder of 2013 after the company's acquisition on April 29.