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ABI Rolls MALDI-TOF Instruments into ABI/MDS Sciex Joint Venture, Merges R&D Groups


Applied Biosytems will transfer its Voyager MALDI-TOF and 4700 MALDI-TOF/TOF instruments to its joint venture with MDS, the company said last week. This joint venture already produces a number of mass spectrometers sold by ABI, which will continue to market, sell, and service the systems.

R&D and manufacturing of the Voyager and 4700 mass spectrometers, the only ones currently produced by ABI in-house, as well as related intellectual property, will be moved to the Applied Biosystems/MDS Sciex Instruments joint venture in Toronto.

“There are significant benefits for us in terms of scale, resources, skill, which should improve our time to market, customer satisfaction, [and] the range of potential product offerings,” said a spokeswoman for Applied Biosystems. “And we are able to accomplish this while improving the economics of Applied Biosystems’ business.”

The transfer of the technology will lead to a number of changes. Manufacturing will move from ABI’s Houston facility to MDS Sciex, a division of MDS, in Toronto over the next several quarters. In addition, ABI has reduced its MALDI R&D group in Framingham by an undisclosed number of people and will transfer the remainder of the group to Toronto, according to the spokeswoman. All future MALDI-TOF-based mass spec systems will be developed in Toronto.

In addition to the manufacturing and R&D assets, MDS has acquired 50 percent of MALDI-TOF-related patents owned by ABI. Both companies will contribute their stakes in these patents to the joint venture. MDS will pay ABI $40 million in total.

ABI will retain its Framingham facility, which will continue to develop and manufacture chemistries, like the iCAT and iTRAQ reagents, develop mass spec applications, host instrument demonstrations, and market the instruments.

Up until now, the joint venture had already been manufacturing Q-TRAP, Q-STAR, and API series instruments, while ABI was solely responsible for the Voyager and 4700 MALDI-TOF mass spec systems.

The transfer will likely not affect users, according to Applied Biosystems. “We expect it will actually be invisible to the customers, since the customer interface will remain totally unchanged,” the spokeswoman said.

The move results from ABI’s current strategic review of its business and obtained the thumbs up from some analysts. “We believe this addition of MALDI products may enhance future revenue growth,” read a comment published by UBS analysts last week. “Overall, we see this deal as a long-term positive for ABI as it consolidates the MS business, reducing redundant efforts and helping to align corporate priorities.”

ABI expects the costs from a small number of layoffs andtransferring R&D and personnelto be reflected starting FY05. MDS expects to obtain CA$25 to CA$30 million ($19.4 to $23.3 million) in revenues from the deal in fiscal year 2005.

— JK

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