Looking beyond imaging and detection

PerkinElmer acquires Caliper Life Sciences for approximately $600 million, with eye toward expansion into preclinical work and companion Dx

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WALTHAM, Mass.—PerkinElmer Inc. has its sights set onstrengthening its market position for molecular imaging and detection for humanand environmental health, but is also seeking to expand into the preclinicalrealm, companion diagnostics and other "compelling customer solutions in abroad range of high-growth end markets."
To those ends, the company announcedin September the signing of a definitive agreement to acquire Hopkinton, Mass.-basedCaliper Life Sciences Inc. 
"It was featured in our strategic plans back at the end of2008 or beginning of 2009 that we had identified preclinical work as a naturalstepping stone from cellular imaging," Alan Fletcher, vice president ofstrategic marketing for the Bio-discovery unit of PerkinElmer, tells ddn."If you think about our capabilities in detection as well, we have a naturalprogression to proceed into clinically relevant data for trials. We've beenlooking at areas like toxicology and animal imaging, which are high-growthareas in our view."
Under the terms of the agreement, PerkinElmer will buyCaliper for $10.50 per share, or a total of about $600 million in cash. Thedeal is expected to close in the fourth quarter of 2011, and Kevin Hrusovsky,Caliper's CEO, plans to join PerkinElmer's senior leadership team following theclose of the transaction.  
Robert F. Friel, chairman and CEO of PerkinElmer, said inthe news release about that deal that the combined R&D expertise andintellectual property of the companies will accelerate their ability to bringnew innovations to market, adding, "The acquisition of Caliper Life Sciencesbrings innovative molecular imaging and detection technologies to ourportfolio, complementing our world-leading offerings in life science,diagnostics, environmental and food markets."
Reportedly, the combined technology platforms will expandPerkinElmer's portfolio of solutions and services for global customers,including: broader offerings for molecular, cellular, animal and tissue imagingto enable translational medicine research; the addition of a world-leadingmicrofluidics platform for genomics and proteomics applications, for improveddetection and screening through low sample use and efficiency; and high-valuesample preparation technologies for key scientific workflow areas such asnext-generation DNA sequencing. 
In addition, PerkinElmer foresees more comprehensivesolutions and services for identification of therapeutic response,biotherapeutics development and biologics QA/QC; platform technology additionsthat will drive expansion into attractive areas such as detection forenvironmental contaminants and food pathogens; and broadened servicescapabilities that will leverage multi-vendor asset management, custom researchand profiling for contaminants and adverse effects.
Fletcher believes the cultural fit between the two companiesis good, saying that change in the Bio-discovery unit and health sciences ingeneral at PerkinElmer for the past few years has been strongly driven by acommitment to innovation.
"If you look at Caliper, Kevin himself stands up as anextremely motivational individual, and the culture he has encouraged overlapssignificantly with our own Bio-discovery business with the potential forspreading out to other divisions of PerkinElmer," Fletcher adds.
"Throughout the past eight years, Caliper has assembled anunparalleled suite of disruptive technologies to revolutionize medicine. We areexcited about the merger with PerkinElmer as it enables us to rapidly ramp theadoption of these technologies and accelerate our expansion into moleculardiagnostics and environmental health markets—areas where PerkinElmer hasestablished and growing market positions," Hrusovsky says. "We are confident thatthis merger maximizes value for Caliper's key stakeholders while strengtheningthe company's position as a leading provider of enabling technologies forpersonalized medicine." 
He adds that PerkinElmer and Caliper's technologies are "agreat fit" and the resulting combined portfolio promises to be the "premiersuite of tools that create the in vitro to in vivo to human'bridge' for personalized medicine." Hrusovsky predicts synergisticopportunities in several key technology areas, including small-moleculediscovery, biotherapeutics and vaccines, biomarker discovery and companiondiagnostics, next-generation sequencing and regenerative medicine. 
This deal follows the acquisition of several other companiesby PerkinElmer earlier in the year, but it has a much different character. Forone thing, the Caliper acquisition is the largest of the lot, but also theprevious acquisitions—Geospiza, CambridgeSoft and ArtusLabs—focused onexpansion of PerkinElmer's bioinformatics capabilities. 
Still, while this acquisition may seem to be of a differentcharacter, Fletcher emphasizes that the informatics focus earlier in the yearand the Caliper acquisition now stand to provide "significant overlap" andstrengthen the overall offerings by bringing together such things as DNA andRNA sample preparation, bioinformatics, toxicology CRO services, imaging andmore, "complementing not only Bio-discovery, but also the broader PerkinElmerportfolio."
Fletcher also notes that PerkinElmer has been looking toexpand in Asia and sees that region and other emerging markets as attractiveplaces to market Caliper's products.
The total purchase price represents a premium of 42 percentfor Caliper Life Sciences shareholders, relative to the closing price of $7.39on Wednesday, Sept. 7, 2011, the last trading day prior to the announcement ofthe acquisition plans. The acquisition has received the unanimous support ofthe boards of directors of both companies, and the transaction is expected tobe dilutive to PerkinElmer's 2012 GAAP earnings per share by approximately 5cents and accretive to PerkinElmer's 2012 First Call consensus adjustedearnings per share by approximately 8 cents.
The transaction is subject to customary closing conditions,including approval of Caliper Life Sciences stockholders, and the expiration ortermination of the waiting period under the Hart-Scott-Rodino AntitrustImprovements Act.

Caliper Life Sciences and Yale Center for Genome Analysisautomate next-gen sequencing workflows
HOPKINTON, Mass.—Caliper Life Sciences Inc. last monthannounced a collaboration with the Center for Genome Analysis at YaleUniversity to implement automated protocols for exome capture and librarypreparation workflows. 
Yale has purchased Caliper's Sciclone NGS Workstation andLabChip GXI to improve key bottlenecks in the Illumina HiSeq2000 NGS samplepreparation process, said Dr. Shrikant Mane, director of the Yale Center forGenome Analysis, in a statement.
"We chose these systems because of their flexibility, whichwill enable us to automate protocols for the Pacific Biosciences sequencingworkflow in the future, and because of the hands-on support Caliper provides incustomizing their systems to automate the numerous sequencing workflowsutilized at our center," Mane said.
Caliper is working to enhance its NGS sample preparationsuite to accelerate sample preparation for each of its sequencinginstrumentation and reagent platforms, added Kevin Hrusovsky, the company'spresident and CEO.
"Our team is committed to providing the highest level ofsupport and resource to enable leading NGS institutions to conduct fundamentalresearch that will enable the delivery of medicine in a more personalized manner,"he added.

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