The contract service organisation, which provides biological safety testing, toxicology, viral manufacturing and laboratory animal diagnostic services, has been sold to Avista Capital Partners for approximately $210m (€160m). This is despite only being bought at the start of 2004 for around $500m (including $70m debt). The decision to sell was announced along with the Invitrogen's financial results and is part of a refocus strategy designed to leave the company free to concentrate on its "platform of scientific technologies," said Invitrogen chief executive Greg Lucier. The move hasn't prevented Invitrogen's stock rising nearly 10 per cent today and has left some industry experts sounding relieved. "The worst is over. Invitrogen's ability to show material operational progress in 4Q06 reveals the strength of its core consumables portfolio," said Banc of America analyst Jon Wood, in a research report. He continued: "With remediation efforts well underway, the distraction from the beleaguered BioReliance unit gone, and achievable financial expectations set, Invitrogen's shares should surge [Thursday] on greater confidence in its ability to restore a more acceptable earnings and cash flow growth trajectory." The majority of Invitrogen's revenues come from products rather than services. The company is divided into two sectors. The larger part is BioDiscovery and accounts for about two thirds of Invitrogen's revenue. BioDiscovery sell a variety of kits containing, for example, drug discovery technologies, molecular biology essentials and molecular labelling and detection. The other part of the business is Cell Culture Systems, which as well as selling cell cultures, contains biological services like BioReliance. BioReliance generated around a quarter of Cell Culture Systems' revenues and about 9 per cent of Invitrogen's total revenues - about $110 million in annual revenue. "Although we had improved financial performance in the fourth quarter of 2006, we still have work in front of us to accelerate organic growth and optimise operating margins. However, we believe the decisions we made to divest of some non-core units, and the action plans in place for the balance of the portfolio will enable us to capitalize fully on the strength of our franchise and maximize shareholder value," said Invitrogen chief financial officer, David Hoffmeister. The problems with BioReliance are not new. Speaking at the company's second quarter results in August 2006, Hoffmeister confirmed that although BioReliance had more orders than it could deliver throughout the first half of the year (a book to bill ratio over 1), integrating BioReliance was still not easy. He said at the time: "BioReliance remains a challenge although we are seeing modest improvements in the business each quarter." However, at that point, Invitrogen still believed BioReliance would prove to be a success. Hoffmeister said: "BioReliance is expected to return to modest growth in the second half of the year starting in the third quarter." At the same time, Lucier said: "It [BioReliance] is a business that first half we predicted would be flattish. It has been flattish and then we see seeing modest growth happening as David said in the second half per our original projections. It's a good business that has good trends." Invitrogen had already sold the German contract manufacturing business of the BioReliance business in April 2006, which would account for at least some of the price drop. The business was subject to a management buy-out and is now part of privately owned Biomeva Manufacturing. BioReliance Germany used to contribute $2.5m of revenue per quarter to Invitrogen. Meanwhile, David Burgstahler, a partner at Avista Capital Partners said that "We are delighted to add BioReliance to our healthcare portfolio. BioReliance has an excellent track record as a premier service provider and is a recognized leader in each of its service areas." He continued: "With its strong scientific team and emphasis on customer service and functional excellence, we believe BioReliance is poised for continued success in today's biopharmaceutical environment, which is seeing increased regulatory scrutiny and a shift toward outsourcing non-core activities." "For the last 60 years, BioReliance has pioneered many of the scientific advancements in the contract research organisation industry and has built a solid reputation for strong regulatory expertise and innovative testing solutions," added Larry Pickering, a healthcare Industry Partner at Avista Capital Partners. "As such, we believe BioReliance is in a great position to capitalise on favorable industry trends within the biopharmaceutical sector," he added.