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Market share for Bio-Rad; focused direction for MorphoSys
February 2013
by Jeffrey Bouley  |  Email the author


HERCULES, Calif.—Bio-Rad Laboratories Inc., a multinational manufacturer and distributor of life-science research and clinical diagnostic products, announced Jan. 10 that it had completed its acquisition of AbD Serotec, a division of Martinsried, Germany-based MorphoSys AG, for about $70 million in U.S. dollars. The news that an acquisition deal was in the works and awaiting customary closing conditions had come just a little less than a month previous.  
Touting the strengths of the newest member of the Bio-Rad family, the company notes that AbD Serotec "is one of the world's leading antibody manufacturers," offering more than 15,000 antibodies, kits and accessories. In addition, AbD Serotec has an ISO 9001- and ISO 13485-certified production facility in the United Kingdom and facilities in Germany and the United States as well.
Or, as Bio-Rad President and CEO Norman Schwartz put it, "With AbD Serotec's comprehensive catalog of antibodies, we are able to offer our customers total assay solutions that can be validated on many of our research platforms for Western blotting, multiplex protein expression, ELISA and cell sorting."  
When the deal was first announced Dec. 16, Brad Crutchfield, president of Bio-Rad's Life Science Group, repeated much the same sentiment as Schwartz, but also noted, "We are impressed with the quality of AbD Serotec's products as well as the company's reputation. With this acquisition, Bio Rad will have access to a comprehensive catalog of antibodies ... in addition, we will be able to exploit a powerful in-vitro technology to accelerate future antibody generation."  
According to the terms of the transaction, Bio-Rad acquired all of MorphoSys' AbD Serotec research reagent and diagnostic business, comprising the AbD Serotec segment of MorphoSys AG as well as the subsidiaries MorphoSys UK Ltd., MorphoSys AbD GmbH and MorphoSys U.S. Inc. In addition, the transaction includes a fully paid-up, non-exclusive license agreement to use MorphoSys' HuCAL technology for diagnostic and research purposes.  
Following the announcement of the deal in December, Dieter Feger, senior vice president at AbD Serotec, reached out to customers via the company's website to say that AbD Serotec welcomed the news and "sees this as a great opportunity to work with one of the world's leading life-science and clinical diagnostics companies. We will continue to serve you with the same commitment to quality and customer service; in that regard, nothing will change."  
For its part, the former parent company of AbD Serotec is looking at the sale of the research and diagnostic antibody company as a chance to increase its focus on therapeutics.  
"We are making great progress in our therapeutic antibody pipeline, which is a huge potential value driver for MorphoSys," according to Dr. Simon Moroney, CEO of MorphoSys. "With the sale of AbD Serotec, we will bring a laser-like focus to driving growth in this, our area of core competence."  
"MorphoSys will concentrate on technology and drug development," echoed Jens Holstein, chief financial officer of MorphoSys, in the company's news release about the sale. "It enables us to fully dedicate our financial resources to the most significant value drivers. Bio-Rad provides AbD Serotec and its employees with an ideal environment in which to exploit its potential in the research and diagnostic arena."
Zacks Investment Research was also upbeat about the acquisition deal, writing in an investor's note that the acquisition "will enhance Bio-Rad's Life Science Research segment as well as its mainstay Clinical Diagnostic franchise" and expects the transaction to strengthen Bio-Rad's market position.
"With an improved portfolio, Bio-Rad should be able to gain an edge over its competitors," Zacks noted. "Also, higher revenues and substantial goodwill enhancement seems to be on the cards for the company due to the complementary portfolio of AbD Serotec. We are rather optimistic regarding Bio-Rad's ability to accelerate growth via inorganic means."  

Bio-Rad acquires cell-sorting system from Propel Labs   
HERCULES, Calif.—Bio-Rad Laboratories Inc. also announced last month its acquisition of a new cell-sorting system from Propel Labs. Under the terms of agreement, Bio-Rad has acquired an automated, easy-to-use benchtop sorting flow cytometer. The instrument will be offered by Bio-Rad as the S3 Cell Sorter. First shipments went out in January. Other terms of the agreement were not disclosed.  
Due to their size, complexity and maintenance, cell sorting instruments have been traditionally found in shared research service facilities. The compact size, ease-of-use and affordability of the S3 Cell Sorter offers individual researchers the ability to conduct cell sorting on their benchtop, according to Bio-Rad.  
"With this acquisition, we benefit from Propel Labs' years of expertise in cell sorting," said Brad Crutchfield, president of Bio-Rad's Life Science Group. "The S3 Cell Sorter fits in well with Bio-Rad's existing product workflow and will offer researchers greater access to targeting specific cells in their experiments and ultimately increasing the sensitivity of their assays."
Code: E021308



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