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ABI Acquires Ambion Research Products Unit in Latest Buyout; Sale Proceeds to Fund Dx Start-Up


The wave of acquisitions of RNAi reagent shops by life sciences products providers hit Texas last week when Austin-based Ambion said it would sell its research products division to Applied Biosystems for $273 million in cash.

The deal gives ABI a stable of RNA research products that could help it fill out its consumables line-up, including a series of products for RNAi research — a market in which ABI currently does not directly participate. It also builds upon a 2-year-old collaboration between the companies to co-market Ambion's siRNA products with ABI's real-time PCR reagents and gene-expression assays. For Ambion, which will become a unit of ABI, the acquisition gives it the clout, resources, and global reach of a $1.8 billion parent firm.

The sale also provides Ambion founder Matt Winkler with enough money to launch Asuragen, a cancer diagnostics start-up he had been planning to spin out of Ambion once he had secured the funds to do so.

The Sale

Under the deal, ABI will acquire Ambion's RNA stabilizing, synthesizing, handling, isolating, storing, detecting, and quantifying technologies and products, including its microRNA and siRNA reagents — which are estimated to have helped this division of Ambion generate more than $52 million in revenues last year.

"It's a fair statement to say that [ABI will] be keeping most of the people [at Ambion]. This is not the kind of deal where we're either acquiring to squeeze out cost or that there is a lot of redundancy — in fact the products and people are highly complementary" between the companies.

This business, and the roughly 300 Ambion employees that are a part of it, will become a unit of ABI. Peter Dansky, vice president and general manager of molecular biology consumables at ABI, declined to comment specifically on his company's plans for Ambion once the acquisition closes, noting that "it's early days."

However, he said that ABI is "committed to Ambion in Texas, [and] we are also committed to Ambion becoming a center of excellence within our overall consumables business." He would not say whether lay-offs were planned or not, but added that "it's a fair statement to say that we'll be keeping most of the people [at Ambion]. This is not the kind of deal where we're either acquiring to squeeze out cost or that there is a lot of redundancy — in fact the products and people are highly complementary" between the companies.

Dansky stressed, however, that given the early stage of the transaction, nothing is certain, "but the spirit and intent is really building on the business."

The acquisition, which is expected to close in the first quarter, comes as no surprise to those watching the RNAi research market; life science tool giants have continued to look to acquisitions of smaller, more focused companies in all fields to become one-stop shops for their customers, and the RNAi space has been no exception.

About two years ago, Invitrogen bought up Sequitur for an undisclosed amount in a bid to expand its line of RNAi offerings and provide customers a "more complete RNAi solution," in the words of a company representative (see RNAi News, 11/7/2003).

A few months later, Fisher Scientific picked up Dharmacon for $80 million in cash, a move the larger firm said would "expand [its] presence in the life sciences market" (see RNAi News, 2/13/2004).

Most recently, Sigma-Aldrich acquired Proligo from chemical firm Degussa in a deal that Sigma treasurer Kirk Richter told RNAi News would give his company "more capabilities in what's going on in functional genomics these days," namely in the gene-silencing arena (see RNAi News, 2/18/2005).

According to Dansky, ABI was "looking for complementary products to provide more workflow solutions for customers," and Ambion's offerings fit the bill. "Our consumables strategy is focused on looking at [research] applications and providing a more complete solution for customers, starting as early as we can in the experimental workflow and providing solutions … that help the customer get their entire experiment done," he said.

Although Ambion's product offerings extend beyond RNAi, the gene-silencing technology "is an important, growing workflow element," Dansky noted. "To be able to [provide solutions to] the customer who is interested in manipulating cellular activity, and then measuring the effects of those changes downstream — that's the kind of matching we can provide by combining" Ambion and ABI.

The Start-Up

The acquisition does not include Ambion's services and diagnostics divisions, which comprise about 10 percent of the company's total sales and about 100 employees, Ambion President Bruce Leander told RNAi News last week.

The services group purifies RNA from customer-submitted samples for analysis on an Affymetrix chip. The data is then sent back to the customer. "They also have their contract [oligo and DNA plasmid] development and manufacturing [operations], and they sell Armored RNA standards and controls for viral load assays," he said.

The diagnostics division develops RNA-based products that detect diseases, and currently markets a test for cystic fibrosis and an Ashkenazi carrier panel, as well as a test for the detection of chromosome translocations in leukemia.

According to Leander, these operations will be combined in a new company founded by Winkler called Asuragen, which will be focused primarily on cancer diagnostics development. Ambion Diagnostics holds some intellectual property on miRNAs, he noted, and a part of Asuragen's efforts will include examining their role in cancer.

Ambion's miRNA arrangement with Rosetta Genomics, under which Ambion is creating research kits by adapting its miRNA platforms to detect, quantify, and functionally characterize Rosetta miRNA sequences, however, will go to ABI, he added.

Leander said that Winkler had been interested in pursuing diagnostics development in a spin-out of Ambion for some time, and around July began hunting around for funding to do so.

One day, "he walked into my office and said, 'What if we sell Ambion,'" he explained. "The timing seemed perfect — our growth rate this year has been great, and it just seemed like the market was primed for that sort of thing.

"We felt the market conditions were good, that Ambion was in a perfect position to be acquired by any number of different larger companies in the life science space that were eager to do acquisitions," Leander said.

Based on the timeline of the transaction, it appears that Winkler and Leander's assessment of the marketplace was apt. "We started the process in earnest around late August or early September, using JP Morgan Securities as the investment bank to help us through the competitive bidding process," he said. The deal with ABI was finalized in the days just before Christmas.

Winkler "has always said that everything is for sale at the right price … and all of a sudden the timing seemed perfect. [He] had this interest in diagnostics, and all the stars lined up," Leander added.

Winkler was not available for comment as of press time.

— Doug Macron ([email protected])

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