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Qiagen Buys Genomic Data Analysis Firm Ingenuity Systems for $105M

NEW YORK (GenomeWeb News) – Qiagen announced after the close of the market on Monday that it has acquired genomic data software company Ingenuity Systems for $105 million in cash.

Based in Redwood City, Calif., Ingenuity has developed a knowledge system of biomedical information and analysis solutions that researchers can use to interpret and analyze complex biological systems. In particular, Qiagen noted, with massive amounts of data being generated by new technologies such as next-generation sequencing, being able to make sense of the data is "a critical success factor."

The purchase, Qiagen said, will expand and strengthen its own curated database.

"The interpretation of biological information is becoming a cornerstone of Qiagen's ecosystem of sample and assay technologies for molecular testing – both in life sciences research and in diagnostics," Qiagen CEO Peer Schatz said in a statement. "We are establishing a leading role in this field and intend to further expand the value proposition and scope of our offering."

Jake Leschly, president and CEO of Ingenuity, added that while sequencing an entire human genome can take a few days at a cost of a few thousand dollars, analyzing the data can last months or years.

"The Ingenuity mission from day one has been to accelerate scientific discovery and enhance clinical decision-making through a rich understanding of biological systems," he said. "As part of Qiagen, we will offer our biological knowledge content and software in the context of a best-in-class ecosystem of molecular testing solutions and to a greatly expanded range of customers around the world."

Leschly and other members of Ingenuity's senior management team will move to Qiagen and Ingenuity's offices will remain in Redwood City, Qiagen noted.

The buy was funded with existing cash reserves, Qiagen said.

Among the deals that Ingenuity has forged for the development of data analysis solutions is an agreement with Laboratory Corporation of America, as BioInform reported previously, and one with Life Technologies. Earlier this month Ingenuity and Affymetrix inked a co-promotional deal.

According to Qiagen, the foundation of Ingenuity's product portfolio is the Ingenuity Knowledge Base, which together with software applications, allow researchers to interpret large amounts of biological data in order to guide scientific experiments and medical treatment decisions. Ingenuity's Knowledge Base comprises algorithms that pair all human gene variants with biological interpretations "based on known outcomes and findings."

The pairings are then collected and curated and the data is translated into "interoperable and linkable collections of relevant information," Qiagen said. It added that Ingenuity is developing a new product to enable the use of NGS in molecular diagnostics.

The new product offers "an optimized and scalable solution for interpreting and scoring clinical variants identified by sequencing-based molecular diagnostic tests," Schatz said on a conference call this morning, adding that Ingenuity has formed relationships with several diagnostics reference labs to bring the technology to market.

He also said that Ingenuity has worked with a number of different platforms and Qiagen plans to maintain the open architecture of Ingenuity's platform.

In the summer Qiagen announced a collaboration with German software development firm SAP to develop tools to align genomic sequences and to identify mutations based on reference data, as BioInform reported. Schatz said that the Ingenuity acquisition will "bolster" that collaboration and will "further accelerate the algorithm implementation across the different types of databases and integrate third-party databases, as well, in the queries."

In 2012 Ingenuity had approximately $20 million in sales. Qiagen anticipates reporting adjusted net sales of about $15 million from Ingenuity in 2013. The deal is expected to dilute Qiagen's full-year 2013 adjusted EPS by about $.03 per share and to dilute 2014 adjusted EPS by about $.02.

The deal is expected to be accretive in 2015.

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