Molecular diagnostics firm Cepheid announced last week that it had acquired France-based Actigenics for about $1.8 million in cash, signaling its expansion into the nascent field of microRNAs.
According to Emily Winn-Deen, vice president of strategic planning and business development at Cepheid, the transaction was part of an ongoing effort at her company to acquire novel biomarkers to use with new molecular diagnostics in its core areas of interest — cancer and infectious diseases — that began earlier in the year.
“In the spring, Cepheid went out and raised somewhere around $90 million … to … allow us to go out and acquire [biomarker] intellectual property, which would allow us to expand our test menu into areas … we had targeted as [having] high medical value-add applications,” she told RNAi News this week. “As part of the program stemming from that business decision to raise money … we began looking for companies that had specific marker intellectual property [and] Actigenics was brought to our attention through our French office.”
Winn-Deen noted that although Cepheid had been aware of the growing body of research linking miRNAs to cancer and other diseases, “we hadn’t really pursued that. Most of what we had looked at previously was … more traditional, established markers,” she said.
However, when officials from Cepheid’s European headquarters in France brought up privately held Actigenics as a possible acquisition target, “we looked at what they had to offer [and] realized that this area of microRNAs is a very fundamental control mechanism for how different processes in the cell are turned on and off.”
Furthermore, Actigenics has “one of the best portfolios of markers in this emerging area,” she said.
According to a statement made by Cepheid CEO John Bishop last week when the company announced the acquisition, “Actigenics has one of the largest portfolios of validated microRNAs in the world, having discovered 88 novel microRNAs to date. By using their proprietary search algorithms, several hundred more novel microRNA candidates have been identified and are being validated in their discovery pipeline.”
In addition to its IP portfolio, Actigenics has “a discovery mechanism that would allow us to selectively target diseases that are of interest to us, and continue to discover additional markers and understand the functional significance of markers that are already known,” Winn-Deen said.
She noted that miRNAs are still “very early-stage markers,” but said that this figured into Cepheid’s willingness to take a chance on Actigenics and an unproven technology.
“There is a balancing act that you have to do when you’re investing in marker intellectual property,” she explained. “The farther through a validation process a marker is, the more expensive it is. So in terms of trying to balance our portfolio, we thought that these were markers aren’t too far along in the validation process but … also weren’t very expensive.”
Business as Usual
Following the close of the acquisition, Actigenics will continue to operate as it has in the past, including providing miRNA services to the pharmaceutical industry, Winn-Deen said.
“Basically, the pharma companies provide characterized patient samples … from a specific disease condition … and Actigenics does the microRNA profiling of those samples,” she said. “That’s a big part of their revenue generation and [we] intend to continue that as long as there are still things to discover and pharma is still interested in pursuing that as alternative drug targets or pathway approaches to developing new drugs.”
“The farther through a validation process a marker is, the more expensive it is. So in terms of trying to balance our portfolio, we thought that … [Actigenics’ microRNA markers] aren’t too far along in the validation process but … also weren’t very expensive.”
Which pharmaceutical firms are currently customers of Actigenics remains undisclosed, Winn-Deen said, but she noted that “there are two large pharma companies that are current customers, and there are a number of other pharma companies in discussions with them.”
Aside from revenues generated through service contracts, she said agreements with pharma companies could also translate into new products Cepheid could sell.
“Actigenics has been working with pharma companies providing service to them in a wide variety of disease areas,” Winn-Deen said. “What we hope to do in the future is to retain diagnostic rights to these things. And if some of these things turn out to be important pharmaceutical targets, [we hope] to be able to offer a companion diagnostic.”
Additionally, she said that Cepheid sees value in the possible therapeutic applications of the in-house work Actigenics will perform.
“We certainly expect that for any [internal] projects … we might find … drug targets for the disease areas we choose,” she said. “We’re not a pharma company and we don’t intend to be a pharma company, so those would be available for out-licensing.”
In terms of the integration of Actigenics, Winn-Deen said Cepheid plans to bring all of Actigenics’ approximately 12 employees into Cepheid Europe’s facilities.
“We have no intention of laying off anyone,” she said. “One of the things that we were delighted to add to our capabilities is the very sophisticated bioinformatics team that they bring. The plan is to, as it makes sense logistically, move them out of the incubator space they’ve been in and into our corporate space.
“They will continue to do what they’ve been doing,” she added. “We will have them integrated into our R&D program, and they will have a dotted line reporting relationship to our chief medical office Dave Persing.”
It is not yet clear exactly how and when the integration will take place because “there are ways you handle things under French law … and we’re actually acquiring [Actigenics] through our French company,” Winn-Deen said.
However, Actigenics “will remain as a brand — Actigenics, part of Cepheid. We’re not looking to erase their name recognition, but we do plan to integrate them into the overall company,” she added.