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Stratagene Buy Will Give Agilent Two Array Software Packages; Post-Merger Plan Unclear

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Agilent Technologies last week announced that it plans to acquire Stratagene for $246 million in cash in a deal that will add the smaller company’s consumables and molecular diagnostics to a product portfolio that is heavily weighted toward instrumentation.
 
While Agilent officials claimed last week that Stratagene’s products and experience are “highly complementary” to its life sciences portfolio, there is one area of overlap in the firms’ bioinformatics portfolios. Both companies sell microarray analysis packages that are very well established in the research community: Agilent sells the GeneSpring suite of tools that it picked up in its 2004 acquisition of Silicon Genetics, while Stratagene sells the ArrayAssist software package.
 
Officials from both firms told BioInform this week that they could not disclose details of any plans for the software business before the merger closes. 
 
The companies expect the deal to close in around 90 days.
 
Unification Program
 
Agilent is already in the midst of an effort to “realign” its informatics portfolio in an effort to better integrate several products it picked up through previous acquisitions.
 
Jordan Stockton, informatics marketing manager at Agilent, told BioInform in January that the realignment should result in a more unified software platform [BioInform 01-26-07].
 
“We’ve fairly recently taken a look at all of our informatics assets and sort of realigned them to really speak toward there being a single platform — basically the Agilent informatics platform — to address the entire laboratory’s needs,” Stockton said at the time.
 
Stockton declined to provide specifics on the realignment plan, but noted that GeneSpring would factor heavily in the platform.
 
As of January, Agilent had not yet determined whether to rebrand any of its current products as part of the realignment process.
 
Even though informatics contributes very little to Agilent’s overall life science revenues, the company considers software to be a key part of its strategy in the marketplace.
 
In January, Nick Roelofs, Agilent’s general manager of life sciences, included software as one of four growth initiatives for the company at the JP Morgan Healthcare Conference in San Francisco.
 

While Agilent officials claimed last week that Stratagene’s products and experience are “highly complementary” to its life sciences portfolio, there is one area of overlap in the firms’ bioinformatics portfolios. Both companies sell microarray analysis packages that are very well established in the research community.

Describing informatics as “really fundamental in transforming how laboratories analyze data and handle data,” Roelofs estimated the informatics market at around $600 million and said that Agilent currently has around 12 percent market share and “tens of thousands of users” in the sector.
 
While noting that $600 million is “not a particularly high revenue opportunity for any company, and certainly not a particularly high revenue opportunity for us,” he said that informatics is “a fundamental backbone across the laboratory” and therefore an important focus for the firm.
 
At the time, Stockton declined to comment on whether Agilent was looking to acquire additional informatics firms to fill in any gaps in its software portfolio, but he cited partnerships with pathway informatics companies as “a big emphasis that we’ve had over the last year that continues to be even more of an emphasis” for the GeneSpring product line in particular.
 
In addition to ArrayAssist, Stratagene sells a pathway analysis package called PathwayArchitect, which would expand Agilent’s software offerings in that area, as the company does not yet sell a pathway informatics package.
 
Even in the area of microarray analysis, the two firms have taken slightly different paths. While both GeneSpring and ArrayAssist were originally designed for gene expression analysis, the companies have evolved in slightly different directions to address the requirements of emerging microarray applications.
 
Agilent, for example, offers software packages for array-based comparative genomic hybridization and chromatin immunoprecipitation-on-chip analysis, while Stratagene has developed versions of ArrayAssist for exon arrays and copy number analysis.

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