WEST LAFAYETTE, Ind.—Bioanalytical Systems Inc. (BASi) has acquired substantially all the assets of consulting-based contract research laboratory Seventh Wave Laboratories LLC, which provides consulting for discovery and preclinical drug development. The deal for Seventh Wave involves $7 million in cash and 1.5 million of BASi shares, according to the July 2 Asset Purchase Agreement (APA) filed with the U.S. Securities and Exchange Commission (SEC).
The agreement opens the door to boosting lead optimization, in-vivo toxicology, pharmacology capabilities and pharmacokinetics, the companies say.
“We are very excited about the opportunity to integrate the talent and expertise of Seventh Wave,” states Jill Blumhoff, vice president of finance and chief financial officer of BASi, a pharmaceutical development company providing contract research services and monitoring instruments to drug development companies and medical research organizations.
“Through the acquisition, we have expanded our service offerings and can reach nearly double the clients for our services,” Blumhoff said in a press release. “Our cultures are similar, and we expect to continue to deliver high-quality service to our expanded client base.”
BASi focuses on developing services and products that increase efficiency and reduce the cost of taking a new drug to market, and provides contract research services to the life-sciences industry, primarily in drug research, discovery and development in commercial and academic settings.
“Combined with the initiatives currently in process, including the expansion of our preclinical services facilities and the investment in new product development, the addition of Seventh Wave helps further provide the foundation for future growth,” says Blumhoff.
The employees “at both sites provide the foundation from which we can build the future,” she adds. “With continued support from our board members and shareholders, we will continue to execute on our initiatives aimed at consistent growth in revenue and profitability.”
John E. Sagartz, who founded Seventh Wave—where he served as president, CEO and chief strategy officer—was appointed a director by the BASi board of directors.
Gregory C. Davis, BASi’s chairman of the board, commented that, “We’re delighted to welcome John to our board. For several years, BASi has extensively collaborated with Seventh Wave Laboratories, the company John founded and led for over 15 years, so we have firsthand appreciation of his strong scientific background, impeccable leadership and entrepreneurial vision. John will be an invaluable source of guidance as we move forward with this venture.”
“I’m excited to participate as a director of BASi,” said Sagartz. “We have a unique opportunity to shape a newly combined organization and position it as a quality resource for bringing new products to patients and creating value for all of our stakeholders.”
“With BASi, we add capabilities that have often been requested, but have not been available through Seventh Wave alone,” he added. “Through extensive collaborations over the past several years, it is apparent that the two organizations share a focus on delivering quality and timely services. We expect the enhanced capabilities and shared core values to facilitate enriched client interactions and further growth.”
Seventh Wave saw annual revenues of approximately $11 million in 2017.
“For both BASi and Seventh Wave Laboratories, our success has been built on a solid foundation of quality, on-time delivery and a commitment to providing personalized and responsive service to our clients,” says Philip Downing, senior vice president of preclinical services at BASi. “We believe Seventh Wave’s scientific depth and expertise in histopathology, pharmacokinetics, investigative toxicology and pharmacology model development perfectly complement BASi’s offerings and make this combination an excellent strategic fit.”
By integrating PK/ADME, bioanalysis, toxicology and pathology, the company provides local, national and international clients a multidisciplinary environment.
BASi negotiated the acquisition of Seventh Wave during the third quarter of fiscal 2018, adding to the company’s foundation for growth. It also completed the planning and obtained permits for the announced expansion and upgrade of its Mt. Vernon Preclinical Services facility, added to its management and leadership team and made additional capital investments in its laboratory, computer equipment and infrastructure, the company states.
In reporting BASi’s third quarter results, Blumhoff stated: “We are very pleased to report revenue growth during the third quarter of fiscal 2018 as compared to the third quarter of fiscal 2017, and to see encouraging results from our growth initiatives ... Our earnings were negatively impacted by over $210,000 in one-time costs for retirement and recruiting as well as due diligence expenses related to the newly announced acquisition of Seventh Wave’s operations. However, we believe these investments will positively impact future results.”