Invitrogen Signs Definitive Agreement To Acquire Dynal Biotech
"As with our acquisition of Molecular Probes, Dynal provides us with a premier technology platform that, when combined with many of our leading biomedical research products, will create breakthrough innovations," explained Invitrogen Chairman and CEO, Gregory T. Lucier. "The major product enhancements made possible by the use of Dynal's Dynabead(R) system will further our mission of accelerating disease research and drug discovery, as well as our initiative to provide cutting edge tools to diagnostic companies worldwide."
Dynabead technology is based on the ability to produce highly uniform spherical microparticles that are superparamagnetic, meaning they exhibit magnetic properties only when placed within a magnetic field. Dynal and others treat the surface of these particles with chemical groups and biological materials useful in research applications.
Dynal's "smart" surface technology can be applied to many of Invitrogen's comprehensive product lines, and the company plans to use it to produce expanded sets of matched reagent solutions around genes, antibodies, enzymes, cell culture media and detection products. These combined technologies will have applications in numerous areas of research, including stem cell and cell therapy applications, as well as in new products that support molecular diagnostics, and other key areas of research. In addition, Dynal is a market leader for tissue typing (HLA diagnostics) used to ensure compatibility between donors and recipients in organ and bone marrow transplants.
"We believe that products resulting from combining the two companies' technologies will play a key role in supporting several emerging trends in healthcare," added Mr. Lucier.
One example of the application of Invitrogen/Dynal synergies in healthcare involves treatments that focus on strengthening a patient's own immune system. Separating specific cells that play a key role in fighting disease is a cornerstone of this immunotherapy. By coupling the Dynabead technology with targeted antibodies from Invitrogen's extensive collection, through our anticipated purchase of Zymed Laboratories, researchers will have an efficient and effective system capable of identifying and isolating these important cells from a single blood sample.
The high-level isolation and detection capabilities of Dynabeads will also broaden Invitrogen's ability to provide new solutions for molecular medicine research and diagnostic development. The company intends to apply Dynabead technology to enhance its products for assay development, RNA interference, DNA cloning and proteomic analysis. The Dynabead technology should also be valuable in a number of screening applications where Invitrogen's industry-leading fluorescent labeling and detection products will enable scientists to effectively visualize the results of the new types of studies made possible by the use of Dynabeads.
"Our management team has had strong support from the owners in developing our company to this point," said Jon Hindar, President and CEO of Dynal. "Becoming a part of Invitrogen is an important strategic next step that will open new possibilities and continue to strengthen our position."
Dynal has the ability to manufacture spherical microparticles, or "beads" with unique batch-to-batch consistency. This enables versatility in sample applications, increased accuracy through reduced non-specific sample binding and unique batch-to-batch reproducibility. Dynal holds 13 granted patents, 21 patent applications, 12 registered trademarks and 10 trademark applications on its technology. The company committed approximately 13 percent of revenues to research and development in 2004, a figure that will advance Invitrogen's goal of spending 10 percent of revenues on R & D. Dynal currently employs more than 400 professionals at locations in Norway, the United States, the United Kingdom and China.
The transaction is expected to close by the end of the first quarter of 2005. Dynal is expected to generate revenues of approximately $74 million for the period of April through December 2005. Invitrogen expects the transaction to be accretive to 2005 pro forma earnings per share by 7 cents per share, and to be accretive by 24 cents per share in 2006. The Company has not yet determined allocation of the purchase price, therefore accurate GAAP earnings per share estimates are not available at this time.
Assuming the successful closing of this transaction by the end of March, Invitrogen is raising full-year 2005 guidance to a range of $1.164 billion to $1.184 billion in revenues and a range of $3.40 - $3.44 in pro forma earnings per share. Additional details on the revised guidance will be discussed on the Company's conference call today.