Market share for Bio-Rad; focused direction for MorphoSys

Bio-Rad acquires MorphoSys’ AbD Serotec for approximately $70 million in a cash deal

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HERCULES, Calif.—Bio-Rad Laboratories Inc., a multinationalmanufacturer and distributor of life-science research and clinical diagnosticproducts, announced Jan. 10 that it had completed its acquisition of AbDSerotec, a division of Martinsried, Germany-based MorphoSys AG, for about $70million in U.S. dollars. The news that an acquisition deal was in the works andawaiting customary closing conditions had come just a little less than a monthprevious.
Touting the strengths of the newest member of the Bio-Radfamily, the company notes that AbD Serotec "is one of the world's leadingantibody manufacturers," offering more than 15,000 antibodies, kits andaccessories. In addition, AbD Serotec has an ISO 9001- and ISO 13485-certifiedproduction facility in the United Kingdom and facilities in Germany and theUnited 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 offerour customers total assay solutions that can be validated on many of ourresearch platforms for Western blotting, multiplex protein expression, ELISAand 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 asSchwartz, but also noted, "We are impressed with the quality of AbD Serotec'sproducts as well as the company's reputation. With this acquisition, Bio Radwill have access to a comprehensive catalog of antibodies ... in addition, wewill be able to exploit a powerful in-vitrotechnology to accelerate future antibody generation."
According to the terms of the transaction, Bio-Rad acquiredall of MorphoSys' AbD Serotec research reagent and diagnostic business,comprising the AbD Serotec segment of MorphoSys AG as well as the subsidiariesMorphoSys UK Ltd., MorphoSys AbD GmbH and MorphoSys U.S. Inc. In addition, thetransaction includes a fully paid-up, non-exclusive license agreement to useMorphoSys' HuCAL technology for diagnostic and research purposes.
Following the announcement of the deal in December, DieterFeger, senior vice president at AbD Serotec, reached out to customers via thecompany's website to say that AbD Serotec welcomed the news and "sees this as agreat opportunity to work with one of the world's leading life-science andclinical diagnostics companies. We will continue to serve you with the samecommitment to quality and customer service; in that regard, nothing willchange."
For its part, the former parent company of AbD Serotec islooking at the sale of the research and diagnostic antibody company as a chanceto increase its focus on therapeutics.
"We are making great progress in our therapeutic antibodypipeline, which is a huge potential value driver for MorphoSys," according toDr. Simon Moroney, CEO of MorphoSys. "With the sale of AbD Serotec, we willbring a laser-like focus to driving growth in this, our area of corecompetence."
"MorphoSys will concentrate on technology and drugdevelopment," echoed Jens Holstein, chief financial officer of MorphoSys, inthe company's news release about the sale. "It enables us to fully dedicate ourfinancial resources to the most significant value drivers. Bio-Rad provides AbDSerotec and its employees with an ideal environment in which to exploit itspotential in the research and diagnostic arena."
Zacks Investment Research was also upbeat about theacquisition deal, writing in an investor's note that the acquisition "willenhance Bio-Rad's Life Science Research segment as well as its mainstayClinical Diagnostic franchise" and expects the transaction to strengthenBio-Rad's market position.
"With an improved portfolio, Bio-Rad should be able to gainan edge over its competitors," Zacks noted. "Also, higher revenues andsubstantial goodwill enhancement seems to be on the cards for the company dueto the complementary portfolio of AbD Serotec. We are rather optimisticregarding Bio-Rad's ability to accelerate growth via inorganic means."

Bio-Rad acquires cell-sorting system from PropelLabs 
HERCULES, Calif.—Bio-Rad Laboratories Inc. also announcedlast month its acquisition of a new cell-sorting system from Propel Labs. Underthe terms of agreement, Bio-Rad has acquired an automated, easy-to-use benchtopsorting flow cytometer. The instrument will be offered by Bio-Rad as the S3Cell Sorter. First shipments went out in January. Other terms of the agreementwere not disclosed.
Due to their size, complexity and maintenance, cell sortinginstruments have been traditionally found in shared research servicefacilities. The compact size, ease-of-use and affordability of the S3 CellSorter offers individual researchers the ability to conduct cell sorting ontheir benchtop, according to Bio-Rad.
"With this acquisition, we benefit from Propel Labs' yearsof expertise in cell sorting," said Brad Crutchfield, president of Bio-Rad'sLife Science Group. "The S3 Cell Sorter fits in well with Bio-Rad's existingproduct workflow and will offer researchers greater access to targetingspecific cells in their experiments and ultimately increasing the sensitivityof their assays."

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