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Caliper nabs NovaScreen: Acquisition to make Caliper “one-stop shop”
HOPKINTON, Mass.—In early September, Caliper Life Sciences announced it entered into a definitive agreement to acquire Hanover, Md.-based NovaScreen Biosciences Corp., a privately-held company that provides screening, profiling and assay development services for pharmaceutical and biotechnology companies worldwide and for government agencies, such as the National Institutes of Health.
The $22-million deal will see Caliper acquire all the outstanding stock of NovaScreen. Additional payments of up to $8 million could be made, contingent on the achievement of defined revenue milestones over a 30-month period, according to Tom Higgins, Caliper's CFO.
The acquisition of NovaScreen heightens Caliper's ability to serve its drug discovery customers and opens new avenues to bring Caliper's enabling technologies to the life sciences market, says Kevin Hrusovsky, Caliper's president and CEO. Assuming shareholder approval, he says, the two companies will merge and Caliper will go from being a direct-channel business, primarily dealing with the supply of drug discovery instrumentation and consumables, to being a full-service life sciences company.
"In the past nine months or so, we have landed many contracts for kinase profiling, and many of those companies are looking for a one-stop shop," Hrusovsky says. "Now we can be that central life sciences source."
The acquisition also will allow Caliper to tie into another trend—outsourcing—which Hrusovsky says is becoming a preferred strategy for pharmaceutical companies to remain flexible and productive and keep costs down. Outsourcing is particularly prominent, according to a Caliper news release, in the area of secondary screening and profiling, as well as associated assay development.
A third trend, Hrusovsky notes, is that screening labs are placing a higher value on the quality of experimental data and less on increasing throughput, which he believes plays to the strengths of the products a combined Caliper-NovaScreen entity would provide.
Hrusovsky says the search for the right company to acquire and meet the challenges of those three trends was daunting. "We wanted a company small enough so that we could diversify and complement our instrumentation focus, but large enough to be cash-flow positive and profitable so it wouldn't take us off our financial goals," he notes. "Many people were saying such a company might not exist, but NovaScreen is that company."