With its purchase of Ciphergen’s proteomic tools business still pending, Bio-Rad last week said that profits jumped 43 percent in the third quarter.
Bio-Rad also said third-quarter revenue rose 7.6 percent to $304.8 million, fueling a rise in profits to $23.2 million. The bigger news, however, may have been about what didn’t happen — the finalization of Ciphergen’s sale of its life science research business, including its Surface Enhanced Laser Desorption/Ionization technology, to Bio-Rad. The two companies had originally said the deal would close by Nov. 1.
Spokeswomen for Bio-Rad and Ciphergen declined to comment on the holdup. But Ciphergen CEO Gail Page this week spoke about the company’s plans in its new iteration as a diagnostics company, making it clear that the transaction is imminent [See accompanying story
In documents filed this week with the US Securities and Exchange Commission, Bio-Rad also said it expects the deal to close before the end of the year.
For the three months ended Sept. 30, Bio-Rad said profits jumped to $23.2 million from $16.2 million a year ago. The income growth included a $4.7 million pre-tax investment gain.
Sales in Bio-Rad’s Life Science segment, which houses the company’s proteomics instruments and tools, increased 4 percent to $137.4 million. Profit in the segment grew 86 percent to $6.3 million.
During a conference call, Christina Tsingos, vice president and CFO of Bio-Rad, said initial customer response to the firm’s recently launched ProteOn XPR36 protein interaction array system have been “very encouraging.”
She also said that the company continued to see strong growth in its process chromatography, electrophoresis, and protein expression product lines.
Receipts from BSE testing products, however, dipped by double-digits percentage-wise, Tsingos said, while overall sales remained soft in Japan.
Excluding BSE results, sales in the core life sciences rose by more than 8 percent, she said. Overall, the Life Science segment saw a profit of $6.3 million, an 86 percent increase from a year ago.
“This increase [in] profitability is primarily a reflection of decreased costs from the year-ago period which included litigation-related expenses,” Tsingos said.
In 2005 Bio-Rad settled part of a patent suit filed by Applera against MJ Research two years earlier. Applera included Bio-Rad in its lawsuit after Bio-Rad purchased MJ in 2004.
Part of the dispute remains open in Europe.
Sales for Bio-Rad’s Clinical Diagnostics segment climbed 10.8 percent to $164.4.
For the quarter, Bio-Rad spent $31 million in R&D and had $238.4 million in cash and cash equivalents.
reported in August, Bio-Rad said it would spend $20 million in cash to buy Ciphergen’s proteomics tools business. In addition, it will make a $3-million equity investment in Ciphergen [See PM 08/17/05
“This increase [in] profitability is primarily a reflection of decreased costs from the year-ago period which included litigation-related expenses.”
Bio-Rad will also receive Ciphergen’s ProteinChip arrays, accompanying software, and biomarker development services. Bio-Rad will manufacture, sell, and market the SELDI technology to the life sciences market for applications such as biomarker discovery, characterization, and validation.
Ciphergen will retain exclusive rights to the products for the diagnostic market, and will get a supply agreement with Bio-Rad to buy SELDI instruments and consumables to help build its diagnostics business.
The two companies will collaborate to identify SELDI customers potentially interested in partnering with Ciphergen to commercialize biomarker discoveries.
Ciphergen shareholders had approved the divestiture in late October, clearing the way for Ciphergen to sell off a business that had become an albatross. According to court documents filed two months ago related to a patent-infringement suit Health Discovery filed against Ciphergen, Ciphergen has sold a total of 670 SELDI instruments since its inception. Overall, Ciphergen’s proteomics tool division saw sales plummet to $18.4 million in 2005 from $31.4 million in 2004.
In a conference call accompanying the release of its financial results, Bio-Rad officials declined to comment on the impending purchase. In an earlier interview with ProteoMonitor, however, Brad Crutchfield, vice president and group manager of Bio-Rad’s Life Science business, said the company will be working to fine-tune the SELDI instrument so that it can used in clinical research to look at “normal and diseased states and look for particular markers or potential biomarkers that could be used for diagnostic purposes, or in themselves [provide] a better understanding of how protein expression in that particular disease state is impacted.” [See PM 10/05/06]