Vive la France

PARIS—Aimed at bolstering France as global leader of in-vitro diagnostics (IVD) while enhancing its bottom line,Paris-headquartered Exonhit will merge with Chilly-Mazarin, France-based InGenBiosciences to create a French IVD company under the new name Diaxonhit.

Exonhit announced Nov. 6 that it signed an agreement topurchase InGen for $23.1 million in a cash-and-stock deal. Pending the approvalof Exonhit's shareholders, the acquisition is expected to close before the endof December.

Specializing in diagnostics for oncology and Alzheimer'sdisease, Exonhit believes Diaxonhit will emerge as strong player in the IVDmarket. Diaxonhit will develop molecular and nonmolecular diagnostics inimmuno-infection, Alzheimer's disease and cancer, according to Exonhit.

InGen leads the French market in tests for human leukocyteantigen (HLA) for determining the compatibility of donors and recipients inorgan and bone marrow transplants. Other InGen products include immunoassaytests, emergency tetanus tests and a diagnostic for detecting infections inprosthetic joints. Today, more than 250,000 joint replacements are performedannually in France and 3.5 million worldwide.

InGen's strong hospital presence and partnerships willprovide Diaxonhit an extensive distribution network for products developedin-house, as well as those by partners, Exonhit states, adding that the mergingof the two companies will result in increased financial strength. This providesDiaxonhit with substantial investment capacity.

"Through this transaction, the magnitude of our businesswill change significantly, a key step for both our companies, all of ouremployees and our shareholders," Loïc Maurel, president and CEO of Exonhit,said in a statement. "InGen's distribution network is a tremendous asset forthe commercialization of our new diagnostic products such as AclarusDx inAlzheimer's disease. With this union we will become a fully integrated playerin the field of in-vitro diagnostics inFrance and have a stronger financial capacity, enabling us to better serve ourambition for growth."

Exonhit Chief Financial Officer Herve Duchesne de Lamottetells ddn that the merger and formationof a new company spells a "change in the business model of Exonhit."

"In particular, Diaxonhit will immediately focus its effortson developing its distribution activities based on the sales organizationalready in place and accelerating the development of high-added-valueproprietary innovative diagnostic products, as well as the pipeline of InGenBiosciences including BJO Inoplex, an innovative proprietary diagnostic test todetect infections associated with prosthetic joints," Duchesne de Lamotte says.

The new Diaxonhit group, operating in France, Belgium andSwitzerland, not only stands to benefit from both companies' business models,activities and know-how, but will benefit from significant synergies, mainlybased on future cost avoidance—and a reduction in its cash burn, he adds.

Diaxonhit will bring to the table innovative R&D, markedby a broadened and diversified portfolio of products under development,including both innovative molecular and non-molecular diagnostics spread overthree main specialty areas: immuno-infection, Alzheimer's disease and cancer.

"The merger with Exonhit represents for us, at InGenBioSciences, a real opportunity to join an actor with a strong portfolio ofinnovative products," says Jean-Pierre Hermet, chairman of the supervisoryboard of InGen Biosciences. "Our expertise and respective strengths will allow,I believe, the rapid integration of the new group and will accelerate itsdevelopment. This merger is the first stage of Diaxonhit's ambitious strategy.To achieve the optimum size in a highly competitive and rapidly consolidatingenvironment, the new group will continue to pursue the identification ofpotential acquisition targets to support its development."