WuXi jumps into genomic analysis, bioinformatics with $65m acquisition

By Zachary Brennan

- Last updated on GMT

WuXi jumps into genomic analysis, bioinformatics with $65m acquisition
Chinese service provider WuXi PharmaTech has acquired NextCODE Health, a US and Icelandic genomic analysis and bioinformatics company, for $65m in cash.  

This is WuXi’s second acquisition​ in the last four months, and the company plans to merge NextCODE Health’s 30 employees with about 75 at WuXi's Genome Center, established in 2011, into a new company to be named WuXi NextCODE Genomics. The business will be headquartered in Shanghai, with operations in Cambridge, Massachusetts, and Reykjavik, Iceland. The leadership of WuXi NextCODE Genomics will include WuXi CEO Ge Li as CEO, Edward Hu as CFO, Hannes Smarason as COO, and Jeffrey Gulcher as CSO.

The acquisition comes as WuXi also raised its FY 2014 revenue guidance by about $2m – from $670-672m to about $674m.

NextCODE Health has developed a genome sequence analysis platform and database architecture, enabling clinicians and researchers worldwide to use next-generation sequencing data to better diagnose and treat diseases.

The company's solutions combine the only whole genome analysis system developed at population scale with access to the largest clinical genetics reference database in the world. These capabilities give clinicians and researchers the ability to store, visualize, and analyze all of their genetic data at base-by-base resolution, in real time, from any browser.

NextCODE was spun out from deCODE genetics after the latter was acquired by Amgen in December 2012. In October 2013, NextCODE Health announced that it had obtained from Amgen a five-year exclusive license for sequence-based clinical diagnostic applications using technology developed by deCODE genetics.

The company will combine with the WuXi Genome Center, which is the only CLIA-certified clinical genomics laboratory in China. WuXi Genome Center has ten Illumina HiSeq X sequencing machines in operation and provides assay development, validation, and testing services.

The acquisition follows WuXi’s collaboration with Foundation Medicine​ to provide genomic profiling services to biopharma companies.

Still a CRO?

The acquisition also represents a step away from WuXi’s standard work as a service company for biotech, pharma and medical device companies as WuXi will broaden its customer base to doctors and patients.

But WuXi spokesman Ron Aldridge assured us that the company will continue to be a part of the CRO community.

Our move into genomics and bioinformatics is not a shift away from our CRO business but an extension of it​,” Aldridge told us. “Many of our CRO customers will also be customers of WuXi NextCODE, and this new business will also broaden our customer base beyond pharmaceutical and biotech companies to include doctors and patients​.”

He added that the company expects “strong demand​” from customers for its new offering. 

"With the huge unmet medical needs in diseases with a genetic component and the rapid advances in genomics and bioinformatics, now is the right time for WuXi to make a strategic investment in this field, and NextCODE is the right partner​," said Li.

Hannes Smarason and Jeffrey Gulcher, co-founders ofNextCODE Health, added, "In WuXi, we have a superior partner with strengths, including CLIA-certified sequencing and leading global pharmaceutical customers with a strong need for companion diagnostics, that are highly complementary to those of NextCODE​.”

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