Axis-shield (LON:ASD) , the international in vitro diagnostics company, this morning reported that it was buying the global clinical chemistry homocysteine business from its US partner, Catch Inc, for US$10m (£6.3m). The acquisition expands on Axis-Shield;s existing cross-licensing agreement signed with Catch in 2004 and gives it proprietary ownership of further valuable IP in the field of homocysteine detection, broadening the patent protection for its growing homocysteine franchise to encompass clinical chemistry technology until 2019.
In its interim results in August this year, Axis-Shield said that its own homocysteine sales and marketing efforts within its Laboratory Division were focused on moving homocysteine testing away from the standard immunoassay to the more convenient clinical chemistry technology. The company currently manufactures and sells clinical chemistry homocysteine assays based on Catch's technology at its manufacturing facility in Dundee and will now extend its franchise by providing homocysteine tests to Catch's existing customer portfolio which includes blue-chip laboratory diagnostics companies.
Synergies from the Catch acquisition will include the ability for Axis-Shield to provide comprehensive and competitive testing technologies for homocysteine on a wider range of laboratory instruments around the world.
Revenues from both the Axis-Shield and Catch homocysteine clinical chemistry assays have been steadily increasing as customers recognise the benefits of what is a rapid, simple, highly adaptable and accurate methodology for use on automated clinical chemistry instruments compared to traditional immunoassay techniques. The recent improvement of the assay to involve fewer reagents whilst offering greater precision and calibration stability, made by Catch scientists prior to the acquisition, has significantly increased market penetration.
Ian Gilham, Axis-Shield’s chief executive, said: “The acquisition of this additional homocysteine measurement technology and business reinforces Axis-Shield's leading position in homocysteine testing and, importantly, significantly strengthens the patent protection of this important marker until 2019. We remain focused on the further growth of sales of homocysteine as the market dynamics move in favour of the more convenient clinical chemistry format for this analyte.”
Under the terms of the agreement, Axis-Shield will pay Catch US$10.0m on completion, followed by deferred consideration of up to 10% of homocysteine enzymatic revenues, payable annually over the life of the product. The acquisition will be financed by a new US$10.0m loan facility, repayable over five years, and is expected to be earnings accretive by 2012. Shares in Axis-Shield rose by 4% yesterday to close at 270p.
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