Serologicals merges with the Upstate Group

- Last updated on GMT

Related tags: Biotech companies, Biology

US life science company Serologicals has entered into a €167.6
million merger with cell signallin specialist Upstate, creating a
significant presence in the preclinical drug screening and target
validation market, the fastest growing segment of the life sciences
tools industry.

The deal is the latest in a series of acquisitions that has seen Serologicals absorb AltaGen Biosciences, the parent company of Sierra BioSource, a leading provider of contract research and development services to the cell culture industry.

In the process, it has shifted its business model to become one of the broadest suppliers of cell biology reagents, introducing approximately 1,500 new research products per year through its Chemicon and Upstate subsidiaries. In addition the agreement will create the opportunity for significant revenue and operating synergies between Chemicon and Upstate, including sales, marketing, distribution, product development and administration.

Serologicals is to issue 5 000 000 shares of its common Ssock to the stockholders of Upstate, with the balance of the consideration to be funded in cash. The merger is expected to add approximately $80 million to 2005 revenues and between $0.03 - $0.05 to its diluted earnings per share during fiscal 2005 (excluding any integration costs that may be incurred during the period).

With the merger, Serologicals​ adds Upstate Group's range of products, technology platforms and services for cell signalling research and drug discovery programmes, which are estimated to bring in revenues of around $30 million a year.

These include the KinaseProfiler, a specificity testing service for the screening of lead compounds against the largest panel of kinases, the PIProfiler, a PI 3-kinase screening service which may be used to identify and evaluate PI 3-kinase lead compounds and the IC50Profiler service, which provides IC50 curves on customer-supplied compounds against kinases found in KinaseProfiler panel.

Serologicals' customers include many of the leading research institutions and life science companies throughout the world including pharmaceutical and biotech companies; colleges and universities; medical-research institutions; hospitals and reference labs; quality-control, process-control and research and development labs in various industries.

"Upstate's rapidly growing drug discovery business will position Serologicals to provide drug screening and validation services to the leading pharmaceutical and biotech companies. We believe preclinical drug screening and target validation are the sectors of the life sciences tools industry with the greatest potential for long-term growth,"​ said David Dodd, president of Serologicals.

"A recent industry report notes that during the second quarter of this year research and development spending by pharmaceutical and biotech companies increased by approximately 14 per cent. According to the report, this was the third consecutive quarter of double digit research and development growth. We believe a significant portion of this growth is occurring as a result of increased spending on target validation and high throughput screening."

Sheridan Snyder, chairman of Upstate said: "Coupling our kinase profiling capabilities with Chemicon's GPCR products and services creates a powerful presence in the drug discovery arena."

The terms of the agreement require Serologicals to pay $205 million in cash and stock, less amounts to repay Upstate's debt and expenses. Serologicals expects the acquisition to be completed during the fourth quarter of 2004.

Related news

Show more