A biopharmaceutical bonanza
GE Healthcare acquires Xcellerex as it looks to broaden capabilities in growing biopharmaceutical market and provide start-to-finish offerings
Calling Xcellerex "a supplier of innovative manufacturingtechnologies for the fast-growing biopharmaceutical industry," GE Healthcarenotes that buying Xcellerex will allow for expanding its offering of productsand services for the manufacture of biopharmaceuticals such as recombinantproteins, antibodies and vaccines.
"The strong strategic fit between the two companies,combined with expanded capabilities in product development and marketing, willoffer significant customer benefits," GE Healthcare says.
"GE Healthcare is committed to growth as a provider ofinnovative technologies and services for the manufacture of biopharmaceuticalsand vaccines. This is an area of significant growth globally for many reasons,including the increased incidence of diseases such as cancer, arthritis anddiabetes—which biopharmaceuticals often play a key role in managing," CatarinaFlyborg, bioprocess product marketing leader for GE Healthcare, tells ddn."We've got a strong track record in investment to bring new technologies tomarket and this is definitely something that we intend to continue—it's a keybusiness focus for us."
Flyborg says that Xcellerex's production-scale, single-usebioreactor systems are complementary to GE Healthcare's products and range ofmedia for cell culture, adding that Xcellerex's FlexFactory custom-designedmodular production platform helps customers deploy manufacturing capacity morequickly.
Moreover, the acquisition fits not only with GE Healthcare'sstrategic goals but also those of its parent company, GE, whosehealthymagination initiative calls for investing in and delivering products andservices that help increase access, reduce costs and improve the quality ofhealthcare.
"GE and Xcellerex share the vision that an integratedapproach, where we can help customers optimize every stage of theirmanufacturing process, has the potential to increase production flexibility andto deliver higher yields of finished product while reducing time to market,"said Dr. Nigel Darby, vice president of GE Healthcare's BioTechnologiesbusiness and chief technology officer for GE Healthcare Life Sciences, in anews release about the deal. "With the global focus on spiraling health costsand the need for sustainable healthcare, these are critical issues for theindustry."
Xcellerex has developed some very interesting technologiesthat are a great fit within GE Healthcare, Flyborg says.
"We're increasingly finding that our customers are lookingfor what we call a start-to-finish approach," she says. "Customers want morethan just buying individual components—they want to work with a partner who canoffer an integrated range of products and services, and a company that can helpoptimize every stage of their manufacturing process, both upstream anddownstream."
The demand from customers for an integrated start-to-finishapproach is behind many of the company's other recent acquisitions and otheractivities, Flyborg adds, noting that GE Healthcare has been known as an expertin protein purification, or downstream, for many years, but in 2007 it acquiredWAVE Biotech, which took the company into upstream manufacturing, and in 2011acquired PAA, a cell culture media company. In addition, GE Healthcare extendedits Fast Trak training service into South East Asia to meet the needs of therapidly growing biopharmaceutical industry there, and it recently formedalliances with engineering companies Neste Jacobs and M+W Group in late 2011 soGE could offer a turnkey approach.
"And now we've announced our plans to acquire Xcellerex,"Flyborg says. "It's about linking up and integrating all the elements of the manufacturingprocess."
The plan is for Xcellerex to become part of GE Healthcare'sBioTechnologies business. Although the integration plan is something that won'tbegin in earnest until after the closing of the acquisition, Flyborg says theintention right now is for the Xcellerex business to continue operating out ofits existing facilities in Marlborough.
"It's really important to stress that this is about growthand development, not consolidation," Flyborg explains. "Xcellerex has awell-respected team of highly-talented staff, and we plan to invest and growthe business further. We value the highly talented team at Xcellerex and thedepth of expertise and experience they have. The team has a strong track recordin innovation, which will be a tremendous asset for GE Healthcare."
"We are very excited to become part of GE Healthcare's LifeSciences business. The combination of Xcellerex's people, technologies andservices with the resources and global reach of GE Healthcare will allow us tobring forward our plans to grow the business," said Guy Broadbent, presidentand CEO of Xcellerex, in the news release about the deal.
Zacks Investment Research notes that Xcellerex's modulartechnology looks like it can be integrated well with GE Healthcare's cell cultureproducts, adding in an investor note, "Also, being of a modular nature, theywill go down well with customers because of easier installation. This in turnwill speed up deployment, thus showing quickly on GE Healthcare's top line."