Bio Saga Headlines

Bio Saga

Tuesday, June 3, 2014

Roche Acquires Nanopore Sequencing Firm Genia Technologies for up to $350M & Sequenom Sells Bioscience Business to Agena for $31.8M

Roche said today that it will acquire Genia Technologies for $125 million in cash and up to $225 million in additional payments tied to milestones. Once the deal closes, Genia will be integrated into the Roche Sequencing Unit.

Genia, based in Mountain View, Calif., has been developing a single-molecule sequencing-by-synthesis technology that uses nanopore-based electrical detection and employs a semiconductor integrated circuit.

Last fall, Genia and its academic collaborators at Columbia University, Harvard University, and the National Institute of Standards and Technology published proof of concept for their NanoTag sequencing technology.

According to Roche, Genia's technology "is expected to reduce the price of sequencing while increasing speed and sensitivity."

Roche has also been working with Pacific Biosciences on developing a sequencing system and assays for clinical diagnostics using PacBio's single-molecule real-time sequencing technology. Last fall, the two companies penned an agreement under which Roche paid PacBio $35 million upfront and could pay up to an additional $40 million in milestones.

Roche first stepped into the next-generation sequencing arena when it acquired 454 Life Sciences in 2007 for $155 million in cash and stock, but it decided last year to phase out that technology by mid-2016.

The company also had research and development partnerships with IBM and DNA Electronics to develop new sequencing technology but discontinued those projects last year.
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Sequenom said after the close of the market Friday that it has sold its bioscience business, which includes its MassArray system, to Agena Bioscience for $31.8 million.

Sequenom had said in September that it would conduct a strategic review for the business, formerly called the Genetic Analysis segment, but at the time didn't offer details on the reason for seeking a potential sell off.

"This sale strengthens our balance sheet, and will enable us to focus exclusively on our Sequenom Laboratories business as we work toward achieving profitability," Sequenom Chairman and CEO Harry Hixson said in a statement today.

Sequenom's sales have been increasingly driven by its Sequenom Laboratories business, and in particular its MaterniT21 Plus noninvasive prenatal test for fetal aneuploidy. It recently reported a 20 percent year-over-year increase for its first quarter revenues.

The bioscience business' flagship product is the MassArray system, a mass spectrometry-based platform for measuring genetic target material and variations. It also includes Sequenom's iPlex assay for analyzing multiplex SNPs and somatic mutations.

Agena, a San Diego-based portfolio company of investment firm Telegraph Hill Partners, will pay $31.8 million, but may pay an additional $4 million in contingent consideration based on certain regulatory and sales milestones. It also has assumed certain liabilities of the bioscience business and has taken over the facility lease for that business. Agena also said that it will offer employment to all of the employees of the bioscience business.

Agena also intends to file for US Food and Drug Administration clearance of the MassArray platform with the IMPACT Dx System, for which Sequenom filed a 510(k) application last year.
Piper Jaffray Senior Research Analyst William Quirk pointed out in a research note that the selling price for the bioscience business was below its FY 2013 revenues of $42.9 million and represents a discount from historical diagnostic/life science tools M&A transactions, which generally run around 2x revenues.

"We are encouraged with Sequenom focusing resources in higher margin products (NIPT testing), although we are surprised with the ultimate selling price of the Bioscience business," Quirk said.
In Monday morning trade on the Nasdaq, shares of Sequenom were down 1 percent at $3.03.

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