Cell Biosciences to acquire Alpha Innotech

In a move aimed at creating a global presence in the protein analysis market—with solutions that will range in cost from $5,000 to $200,000—Cell Biosciences Inc. announced in September its acquisition of Alpha Innotech Corp.

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  SANTA CLARA, Calif.—In a move aimed at creating a globalpresence in the protein analysis market—with solutions that will range in costfrom $5,000 to $200,000—Cell Biosciences Inc. announced in September itsacquisition of Alpha Innotech Corp.

A definitive agreement calls for Cell Biosciences to pay$1.50 per share, or approximately $17.9 million in cash, for Alpha Innotech.Cell Biosciences will operate the combined facilities and retain the acquiredcompany's staff.

"This acquisition will create a worldwide sales andmarketing staff of about 50 people," states Cell Biosciences president and CEOTim Harkness, who adds that he expects the combined businesses to be cash flowbreak-even in 2010.

Founded in 1992, Alpha Innotech offers a broad range ofproducts, from entry-level gel documentation systems, to systems formultiplexed fluorescence and proteomics applications. The company claims tohave sold more than 10,000 systems worldwide. In 2008, Alpha Innotech reportedrevenues of $17.6 million and was profitable on both an operating and anet-income basis. Alpha Innotech employs 62 people, primarily at its SanLeandro, Calif. headquarters.

Cell Biosciences is a private life sciences companyestablished in 2004, and is focused on "revolutionizing protein and biomarkerresearch." The company's lead product is the CB1000, an automated nanofluidiccapillary-based immunoassay platform designed for ultrasensitive detection andcharacterization of oncoproteins and other signaling proteins in ultra-smallbiological samples, such as small tumor biopsies, aspirates and blood. As inWestern blot analysis, proteins from complex biological samples are separated,immobilized, and probed with antibodies. However, the CB1000 system uses an IEFseparation to resolve the various phosphorylation states of signaling proteins.The separated proteins then are immobilized to the capillary wall using UVlight and probed with primary and secondary antibodies. The secondary antibodyis HRP-labeled, which enables ultrasensitive chemiluminescence detection. Evenlow-abundance proteins can be rapidly measured in tiny samples of as few as 25cells.

The combination of Cell Biosciences and Alpha Innotech willcreate a global protein analysis business with a broad product line featuringboth traditional and novel protein analysis technologies. Virtually everyprotein research laboratory worldwide would become a potential customer for thecombined entity, Harkness notes.

"This strategic acquisition marks an important milestone inour plan to create a profitable, high-growth protein analysis business withglobal reach. There is a great strategic fit in people, products, technologies,and customers between Cell Biosciences and Alpha Innotech. I am particularly excitedby the critical mass of talent and industry experience this combinationcreates," Harkness says.

Asked about future acquisition plans, he emphasizes thatoptimizing results achieved by adding Alpha Innotech to the Cell Biosciencesfamily comes first, but that longer term, there will be an ongoing assessment.

Ron Bissinger, CEO at Alpha Innotech, adds, "The innovativetechnology of Cell Biosciences makes it an ideal partner for Alpha Innotech. Iexpect the combined company to create great value for our customers andemployees, and to generate exceptional products for the protein researchcommunity."

The completion of the transaction is subject to customaryterms and conditions, including approval by the stockholders of Alpha Innotech.The directors, executive officers and certain stockholders of Alpha Innotech,who collectively hold approximately 33 percent of Alpha Innotech's outstandingcommon stock, agreed to vote their shares of Alpha Innotech common stock infavor of the transaction. The parties expect the transaction to be completed inapproximately 60 days.

In connection with the transaction, Cell Biosciences hasentered into agreements to raise an additional $19 million in cash in a secondclosing of a Series C Preferred Stock financing and a Series D Preferred Stockfinancing led by its largest investor, The Wellcome Trust. Existing investorsDomain Associates, Novo A/S, Latterell Venture Partners, The Vertical Group andRoyal Bank of Canada have agreed to participate in the financing. BroadOakPartners served as financial advisor to Alpha Innotech in connection with thetransaction.


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