Qiagen said this week that it acquired Ingenuity Systems for $105 million in cash in order to offer its life science and clinical customers a complete and integrated workflow for its PCR- and next-generation sequencing-based molecular testing solutions — from sample preparation to data interpretation.
Under its new parent, Ingenuity will continue to operate out of its offices in Redwood City, Calif., and retain all 120 current employees, while CEO Jake Leschly takes on new responsibilities within Qiagen's life science business unit.
Ingenuity will also continue to develop and offer products under its existing licensing scheme. Its portfolio includes a knowledgebase of curated genomic variants; Ingenuity Pathway Analysis, its web-based application for modeling and analyzing biological pathways; Ingenuity Variant Analysis, which selects clinically relevant genomic variants from NGS data (BI 1/13/2012); and Ingenuity iReport, its software for reporting the results of gene expression experiments from RNA-seq, microarray, and qPCR platforms.
Qiagen plans to incorporate content from Ingenuity's knowledgebase into a curated database that it sells with wet lab assays offered through its GeneGlobe portal — which provides access to hundreds of PCR- and NGS-based assay panels for exploring pathways and diseases such as cancer, cardiovascular disease, and central nervous system disorders. In total, GeneGlobe offers more than 60,000 annotated molecular assays.
Also, Qiagen later this year plans to begin offering an integrated workflow that will provide its customers with kits for sample and library prep, target enrichment, and sequencing, as well as informatics support. Its software component will include solutions that are currently being developed with German software-development firm SAP for sequence read alignment and variant calling (BI 7/6/2012) and Ingenuity's variant analysis and interpretation tools.
In a conversation with BioInform this week, Qiagen representatives said the firm intends to target customers in research and in the molecular diagnostics space with the combined product.
Dietrich Hauffe, senior vice president of Qiagen's life sciences business, said that Ingenuity expands and complements his firm's current wet lab capabilities in both the research and diagnostics arenas by enabling it to support the "[transfer of] raw material into valuable molecular information."
He told BioInform that an acquisition made the most sense because it allows the companies "more flexibility" in the way they integrate their products, enabling them to provide more value and to better address the biomedical and clinical market needs.
It also fits in with Qiagen's broader informatics strategy, which includes its partnership with SAP, by providing "the critical final step" of the analysis process — "gaining biological and meaningful understanding and insights from these data," he said.
Similarly, Ingenuity's customers can now more easily access the resources and kits they need to complete their wet-lab experiments, CEO Leschly told BioInform. Additionally, Ingenuity will benefit from Qiagen's much larger sales and support team, he said, and its tools will be exposed to Qiagen's much larger clientele which includes customers in academic research, the pharmaceutical industry, applied testing, and molecular diagnostics.
"It's an expansion of everything we have done and it's just such a great fit because the [companies'] visions are congruent," Leschly said. "We get to build end-to-end solutions" that cover "assay design to the assay itself to the data storage to the primary analysis [and] the variant calling … on to the interpretation … it's an opportunity to build out some really comprehensive and powerful workflows."
Leschly said that the acquisition shouldn't cause any disruptions to current customers, nor should it affect ongoing partnerships. One such pact is between Ingenuity and Partners HealthCare subsidiary GeneInsight. The two firms inked a deal in March to develop an integrated workflow solution that will include tools for annotating, analyzing, assessing, and reporting human variants from next-generation sequencing-based tests (BI 3/22/2013).
Ingenuity is also working with LabCorp to develop a new MDx informatics solution that will address challenges associated with interpreting and analyzing sequence variants in the clinical setting (BI 11/9/2012). Another partner is Complete Genomics, which offers new customers of its whole-genome sequencing service access to Ingenuity's variant analysis capabilities for six months (BI 7/27/2012).
Leschly also said that Ingenuity intends to honor existing agreements with two of Qiagen's competitors — Life Technologies, slated to be acquired by Thermo Fisher Scientific, and Illumina — adding that the acquisition shouldn't affect those relationships.
Ingenuity is working with Life Tech to develop a solution that will help physicians interpret information from the latter's cancer diagnostic tests. It's providing software and content via a dedicated portal that will allow clinicians to review disease management guidelines, identify clinical trials, and glean useful insights from their data (BI 10/12/2012).
Ingenuity also developed an application for Illumina's BaseSpace app store that includes some of the capabilities from its variant-analysis tool (BI 8/24/2012); and it's also listed as a data analysis partner — along with Knome and Diagnomics — for customers of the Illumina Genome Network, which links researchers conducting whole human genome sequencing projects with institutes that offer Illumina sequencing (BI 4/13/2012).
"We have wonderful relationships with lots of partners and we want all of those to continue," Leschly told BioInform. "[We] want Ingenuity's solution to be one that is universally used by everybody — it's not meant to be locked into a small box and kept for only certain platforms and players."
Qiagen's acquisition of Ingenuity — which had 2012 net sales of approximately $20 million — was effective April 29, 2013, and was funded from existing cash reserves.
According to its earnings documents, Qiagen expects to report adjusted net sales on a non-GAAP basis of approximately $15 million from Ingenuity, excluding fair value adjustments to acquired deferred revenue related to sales contracts executed by Ingenuity prior to the acquisition.
Also, the transaction is expected to be dilutive to full-year 2013 adjusted diluted earnings per share by approximately $0.03 per share and to 2014 adjusted diluted EPS by approximately $0.02 per share, and to become accretive in 2015.