Skip to main content
Premium Trial:

Request an Annual Quote

Life Tech Acquisition Would Make Thermo Fisher a Leader in PCR Research Tools, Forensic Analysis

Premium

Through its planned $13.6 billion acquisition of Life Technologies announced this week, Thermo Fisher Scientific stands to become the market leader in quantitative, real-time PCR research tools and reagents and DNA-based forensics and human identification.

In addition, the acquisition would greatly expand Thermo Fisher's current food safety testing business by adding more PCR-based technologies to the mix, and provide the company with access to Life Tech's rapidly burgeoning molecular diagnostics franchise, which leverages both next-generation sequencing and PCR technologies.

The deal calls for Thermo Fisher to pay $76 per share to acquire Life Tech and assume $2.2 billion of net debt. Life Tech had $3.8 billion in 2012 revenues and has a market cap of around $11.6 billion. Thermo Fisher had 2012 revenues of $12.51 billion.

Thermo Fisher said that it has obtained committed bridge financing from JP Morgan and Barclays and expects to pay for the deal through a combination of $9.5 billion to $10 billion in cash and debt and up to $4 billion in equity.

The firms expect to close the deal in early 2014. The transaction is subject to approval from Life Tech's shareholders and customary closing conditions.

In terms of qPCR-related research tools and technologies, Life Tech is widely considered a market leader, an assertion supported by the results of a survey of GenomeWeb readers conducted in the fall in collaboration with equity research and investment firm William Blair (PCR Insider, 10/25/2012).

Life Tech's PCR and real-time qPCR consumables portfolio includes the extensive TaqMan line of products, such as TaqMan-based assays for gene expression, microRNA and non-coding RNA, SNP genotyping, drug metabolism genotyping, copy number variation, and competitive allele-specific TaqMan, or CAST-based mutation detection. The company also offers a plethora of real-time PCR master mixes, including TaqMan, SYBR Green, and One-Step kits.

Life Tech's portfolio also includes an array of instrument platforms for PCR, qPCR, and digital PCR, enabling the use of many of the above reagents in multiple formats. Most of these instruments are sold under the Applied Biosystems brand name and include, in order from lowest to highest throughput and flexibility, the StepOne and StepOne Plus, 7500, 7500 Fast, ViiA 7, and QuantStudio 12K Flex. In addition, the company is in the process of commercializing a dedicated digital PCR platform called the QuantStudio 3D.

Life Tech is also widely considered to be the market leader in molecular human identification and forensic analysis products. Besides offering several of its thermal cyclers for use in forensics analysis, Life Tech sells a slew of human ID and STR analysis kits under the brand names AmpFℓSTR and GlobalFiler and automation platforms, such as the HID EVOlution extraction system. Adding to that range of products, Life Tech recently became the exclusive global distributor of LGC Forensics' ParaDNA Screening System for on-the-spot sample screening.

On another front, Life Tech offers a variety of food safety, environmental, and veterinary testing products, including the RapidFinder Equine ID kit, Pathatrix Auto System, RapidFinder STEC assay, and MicroSeq and TaqMan detection kits.

Finally, Life Tech has been making a concerted effort to move into the molecular diagnostics space. For instance, last year the University of Florida Academic Health Center adopted the QuantStudio 12K Flex running OpenArray digital PCR consumables to implement a new personalized medicine strategy to screen all incoming catheterization patients for their likelihood of responding to the anti-platelet drug clopidogrel (Plavix) and other treatments (PCR Insider, 6/28/2012).

Life Tech also last year acquired consumer genetic testing firm Navigenics primarily for that company's CLIA-certified laboratory and physician's network; as well as Pinpoint Genomics and its early-stage non-small cell lung cancer test, which was developed on the US Food and Drug Administration-approved 7500 Fast Dx and will continue to be offered in the US on that platform.

And, Life Tech has an ongoing infectious disease assay development and distribution deal with Quidel, a partnership that first focused on 7500 Fast Dx system, but then graduated to include the QuantStudio Dx, a clinical diagnostics version of the QuantStudio 12K Flex (PCR Insider, 3/21/2013).

Meantime, Thermo Fisher had been building a relatively small PCR and qPCR business through recent acquisitions, but its overall product portfolio in this area pales in comparison to that of Life Tech.

Thermo Fisher had mainly offered labware and automation products for PCR and qPCR until 2010, when it acquired a pair of European companies — Finnzymes and Fermentas — which provided it with a pair of thermal cyclers for real-time PCR, proprietary polymerases and probes, restriction enzymes, and sample prep products (PCR Insider, 6/3/2010 and 2/4/2010).

However, since those acquisitions Thermo Fisher had made relatively little noise in the PCR market — until the announced acquisition of Life Tech.

In a conference call earlier this week recapping the planned acquisition, Thermo Fisher CEO Marc Casper noted that Life Tech has "a large and highly complementary product portfolio that includes consumables for all types of sample preparation, gene expression, and cellular research. It provides consumables and instruments used to sequence and analyze DNA, including next-generation sequencing, a new capability that we're extremely excited about. And it has a range of products for applied markets as well, with significant offerings for customers doing DNA analysis in forensic laboratories, for example."

Casper added that in applied markets, Thermo Fisher's "strong position in food safety and environmental testing and Life Technologies' extensive offering in forensic analysis complement each other quite nicely."

Casper particularly highlighted how Life Tech's next-generation sequencing platforms would complement Thermo Fisher's well-established proteomics products. However, he also noted that Life Tech's qPCR product portfolio would be an important part of this synergy.

"It's really exciting when you put it all together," he said. "We've become a technology powerhouse because we're bringing together the leader in genomics with the leader in proteomics. It also gives us a much broader complementary offering for our customers in biopharma production, applied markets, and specialty diagnostics.

"In research and discovery, you know us as the leader in mass spectrometry and for our depth of capabilities to support research scientists," Casper added. "You also know we've been expanding our position in PCR-based testing, and Life Technologies' offering here gives us significant strength in qPCR. Our offering is even more compelling when we add Life Technologies' strength in next-gen sequencing."

It is unclear whether or how much the product portfolios of the companies may overlap, potentially spurring antitrust activity — a point raised during the call by analyst Tycho Peterson of JP Morgan Chase, who cited PCR and bioproduction as potential trouble areas.

Casper replied by noting that as the combined company moves forward "we would expect to close the transaction early in 2014. And certainly, we're not going to speculate on what the government might think, but we feel good about the process going forward."

In a research note issued this week, Amanda Murphy of William Blair and Co. noted that currently Thermo’s product portfolio for genetic analysis includes "instruments and consumables for PCR and qPCR, and consumables for microarray and next-gen sequencing; it also serves as a distributor for emerging next-gen sequencing technologies (such as RainDance in some geographies)."

Blair added that "while it is too early to say how the existing product line could be integrated [into] Ion Torrent’s workflow, we could see cross-selling opportunities among these businesses as well as potential for regulatory issues."

The Scan

Comfort of Home

The Guardian reports that AstraZeneca is to run more clinical trials from people's homes with the aim of increasing participant diversity.

Keep Under Control

Genetic technologies are among the tools suggested to manage invasive species and feral animals in Australia, Newsweek says.

Just Make It

The New York Times writes that there is increased interest in applying gene synthesis to even more applications.

Nucleic Acids Research Papers on OncoDB, mBodyMap, Genomicus

In Nucleic Acids Research this week: database to analyze large cancer datasets, human body microbe database, and more.