Horizon Discovery Group agreed to acquire Sage Labs for £29 million (about $48 million), in a deal designed to expand the buyer into the world’s leading gene editing company, with CRISPR/CAS9 platform technology and its own, fully integrated translational genomics platform.

According to Horizon, the deal fits into its strategy of building a fully integrated life science business by offering integrated product, service and research solutions at all stages of translational genomics and personalized medicine research, from sequence to treatment. The company’s core capabilities center around its GENESIS™, suite of gene editing tools, designed to alter almost any endogenous gene sequence of human or mammalian cell-lines.

Horizon said Sage Labs will provide it with an expanded range of genetically engineered preclinical models through exclusive access to zinc finger nucleases (ZFN) for in vivo model generation and certain exclusive and nonexclusive CRISPR in vivorelated intellectual property to add to its extensive in vitro IP in CRISPR, ZFN and rAAV—the latter a worldwide exclusive to Horizon. Sage Labs’ assets include a custom engineered in vivo model development service, an inventory of ready to use in vivo models, and an inventory of molecularly annotated patient-derived xenograft (PDx) models and custom development capabilities.

Headquartered in St. Louis, Sage specializes in advanced in vivo transgenic disease models for use in preclinical research. Sage Labs began as a unit of Sigma-Aldrich, Sigma Advanced Genetic Engineering, until its purchase last year by management and the private equity firm Telegraph Hill Partners. The company has since grown to its current 50 employees, a direct U.S. and EU sales force, and 43,000 square feet of facilities. 

Horizon said it will work with its new wholly owned subsidiary—to be called Sage Labs Inc.—to expand Sage’s predominantly US customer base by increasing its presence in Europe, Japan and beyond via access to Horizon’s business development and commercial infrastructure, as well as its base of 1,000 customers.

As part of the deal, David Smoller, Ph.D., formerly CEO of Sage, and previously CSO of Sigma-Aldrich and president of its Research Biotechnology business unit, will become Horizon’s CBO. Dr. Smoller and Darrin M. Disley, Ph.D., CEO of Horizon, will lead the implementation of the long-term corporate development strategy, while anopther Sage executive, Edward Weinstein, Ph.D., will become Sage’s general manager.

The acquisition comes more than two months after Horizon closed on its £4.74 million ($8 million) acquisition of the CombinatoRx service business and related assets from Zalicus, disclosed in May. That purchase was designed to complement Horizon’s gene editing and drug discovery and development expertise with CombinatoRx’ combination high throughput screening (cHTS), while expanding CombinatoRx’ customer base beyond North America, into Europe, Japan, and beyond.

Horizon agreed to pay Sage up to £9.8 million ($16 million) cash and up to £19.6 million ($32 million) through the issue of new ordinary shares.

Of the cash portion, £9.3 million ($15.2 million) in cash is payable and 10,957,877 new ordinary shares representing £18.6 million ($30.4 million) of the total price will be issued by Horizon on closing of the acquisition. The remaining £0.5 million ($0.8 million) in cash may be payable and new ordinary shares representing £1.0 million ($1.6 million) of the consideration may be issued by Horizon 12 months after the closing of the acquisition, the company said.

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