Qiagen acquired Genaco Biomedical Products’ outstanding shares for $22 million in cash. Genaco applies a PCR-based multiplexing technology, Tem-PCR, to develop Templex™ molecular diagnostic tests.
Genaco’s multiplex testing products are used by medical researchers to investigate respiratory (ResPlex™ I; II, III), hospital-acquired, and bacterial (StaphPlex™) infections, as well as additional panels for other pathogens. The ResPlex III multiplex panel is designed to differentiate between different subtypes of Influenza from a single sample. Genaco is in the process of completing clinical studies to submit a 510k application to the FDA for its H5N1 avian flu assay, which is a subset of its ResPlex III panel product.
"Genaco has developed a truly innovative approach to sensitive and high-level multiplex testing," said Peer M. Schatz, Qiagen’s CEO. "We believe that multiplexed molecular diagnostic testing is increasingly attractive due to current trends in molecular diagnostics and research, where identifying pathogens and disease markers against a broad panel of potential markers in a quick and cost-efficient manner is developing into a significant need. The Genaco solutions leverage and employ Qiagen preanalytical and assay technologies and offer novel and highly attractive molecular diagnostics solutions to our customers in clinical research, applied testing, and molecular diagnostics."
In addition to the cash amount, 125,000 shares of restricted Qiagen stock have been issued to Genaco founder and CSO. Qiagen anticipates paying approximately $18 million in milestones related to receipt of grants and comparable funding. Based on preliminary analyses, Qiagen expects this transaction to contribute approximately $200,000 in sales in the last quarter of 2006 and approximately $3 million in sales for the full year of 2007.
Qiagen expects to incur one-time charges of approximately $0.02 in EPS in the fourth quarter 2006. These charges primarily relate to in-process R&D and the write-off of certain assets. On an adjusted basis excluding one-time charges, integration, and restructuring costs and amortization of acquisition related intangible assets, the acquisition is expected to reduce EPS in the fourth quarter of 2006 by approximately $0.01 and to be dilutive to EPS by up to $0.03 in 2007, largely due to the costs associated with conducting clinical trials and filing for regulatory approvals for the infectious disease panels.
Beyond 2008, Qiagen predicts that revenues for this product line will grow rapidly and will contribute significant accretion to net income.