By Ben Butkus
Fresh off the heels of receiving US regulatory clearance for its first nucleic acid-based diagnostic test, Meridian Bioscience this week announced its $23.3 million acquisition of international molecular reagents firm Bioline, a move that both provides Meridian a foothold in the PCR market and is expected to help drive future diagnostic development.
The acquisition, announced yesterday, first and foremost provides Meridian's life science business unit with a molecular biology reagent product line to complement its already established immunoassay offerings, Richard Eberly, executive vice president and president of Meridian Life Science, told PCR Insider.
"On the life science side, the Bioline acquisition is very additive in that we now have not only an immunoassay reagent line for our research customers; but also a molecular product line," Eberly said. "It adds a whole new product line and a whole new market for us. It's very complementary."
Particularly attractive to Meridian were Bioline's product portfolio and expertise in PCR, which have driven profitability at the privately held company since its inception in 1992, Eberly said.
"Bioline has continued to grow at greater than double-digit rates since its birth 18 years ago," Eberly said. "They've remained extremely laser-focused on PCR reagents. They're basically a PCR company, and have focused on building the best products and being the fastest to market with new products that enable it to grow.
"They've really carved out a niche in being extremely focused on PCR, and we plan to continue that," he added.
With headquarters in London and offices in Germany, Australia, and the US, Bioline's PCR enzyme portfolio includes a variety of DNA polymerases, including hot-start and high-fidelity polymerases.
In addition, the company sells several variations on its SensiMix real-time PCR kits, which employ a proprietary hot-start PCR enzyme that eliminates primer-dimer formation and non-specific amplification, and which have been validated on all commonly used real-time PCR instruments, according to the company.
Other Bioline product offerings include ultra-pure dNTP nucleotides, nucleic acid isolation reagents, cDNA synthesis kits, cloning reagents, and buffers.
Eberly pointed out that Bioline manufactures all of its reagents in house, something that he sees as a benefit to customers. "When they go and talk to a customer, they're not distributing anyone's reagents. They have direct control over the quality … and the deliverables of those products."
Meridian said that Bioline also brings with it a growing portfolio of intellectual property in the form of patents and licenses.
Bioline's annual revenues in 2010 are expected to be $12 million and have been growing, according to Meridian. The acquisition is expected to be accretive to Meridian's earnings in late fiscal 2011 after pre-acquisition inventory is sold.
Should Bioline continue its growth pattern, it may go a long way toward helping Meridian regain its financial bearings after a fiscal 2010 that "has been challenging" according to a statement by CEO John Kraeutler accompanying Meridian's third-quarter operating results, also announced this week.
Meridian reported Q3 net sales of $33.9 million, an 11 percent drop over Q3 2009; although it did report nine-month net sales of $107.5 million, an increase of 2 percent over the same period last year. In addition, Meridian reported third-quarter and nine-month net earnings of $6.4 million and $21.3 million, respectively, decreases of 24 percent and 11 percent from the prior-year periods.
Meridian also noted that its Life Science unit recorded "another quarter of growth and has achieved nearly a 10 percent improvement" so far this year; and that the addition of Bioline is expected to immediately benefit revenues and growth rates into the future.
"We believe that the return to double-digit growth is within reach and that our focus on new product innovation, selected acquisitions, and broader global capability will sustain those trends," Kraeutler said.
Also expected to drive growth are sales of the Illumigene C. difficile molecular amplification assay, which has been available in Europe for several months and which last week received clearance from the US Food and Drug Administration (PCR Insider, 7/15/10).
The Illumigene assay, developed both internally and with a license to Eiken Chemical's loop-mediated isothermal amplification technology, detects the presence of the toxin-producing region from C. difficile DNA in under an hour and supplements Meridian's rapid immunoassay for the bacterium.
Meridian said in its financial summary that its "core diagnostics business continued to show comparative weakness in the areas of respiratory disease testing due to the lack of an influenza season, and continuing competitive challenges in C. difficile testing. Illumigene C. difficile is expected to help restore growth in this latter category."
What's more, the Bioline acquisition will help feed Meridian's pipeline for molecular testing "largely due to the scientific collaboration that will go on between the R&D sides of the two business units," Eberly said.
"We're contemplating future generations of our clinical molecular platforms, and certainly Bioline will give us the scientific collaboration we need with their strong R&D team," he added.