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Mar 18, 2011

Quest to Buy Celera for $344M Net Through $8 Per Share Cash Deal

Quest to Buy Celera for $344M Net Through $8 Per Share Cash Deal

Acquired firm claims biomarker discovery and development capabilities outstrip existing commercialization capacity.[Caleb Foster-Fotolia.com]

  • Quest Diagnostics is buying Celera for $344 million, net of the acquired firm’s $327 million in cash and short-term investments. The $8 per share cash deal has been approved by both firms' boards. Celera’s stock price was $6.27 per share at market close last night.

    Quest says the transaction value is expected to be reduced further through the realization of a significant tranche of Celera’s available tax credit and net operating loss carryforwards and capitalized R&D, which totalled $117 million at the end of 2010.

    The acquisition includes Celera’s genetic testing products, pipeline, biomarkers, and IP, along with its Berkeley HeartLab cardiovascular testing business, and IVD products and development expertise. Celera’s products business unit develops and manufactures molecular diagnostic products used by hospitals and other clinical laboratories for use in detecting, characterizing, and monitoring diseases and stratifying patients with respect to drug treatment.  The firm’s molecular diagnostics portfolio is distributed by Abbott.

    “Our discovery and validation of new biomarkers has exceeded our capacity to commercialize them,” comments Kathy Ordonez, Celera CEO. “Combining Celera’s expertise in genetics with Quest Diagnostics’ medical leadership, market access, and scale is expected to speed the realization of our vision to personalized medicine.”

    “For Quest Diagnostics, this is an important transaction, which will further strengthen our leadership position in molecular diagnostics discovery and development and drive sustainable revenue growth,” adds Surya N. Mohapatra, Ph.D., Quest’s chairman and CEO. “This transaction advances our growth strategy to be the leading innovator and provider of esoteric and gene-based testing for cancer, cardiovascular disease, infectious disease, and neurological disorders.”

    Celera has a number of IVDs already on the market. The FDA-approved and CE-marked ViroSeq™ HIV-1 Genotyping System is designed to detect HIV genomic mutations that confer resistance to specific types of antiretroviral drugs. The test is cleared for use on Applied Biosystems’ 3100 capillary electrophoresis platforms. Additional ViroSeq drug-resistance assays in development include ViroSeq HIV Integrase, ViroSeq HBV, and ViroSeq HCV.

    Celera’s FDA-cleared and CE-marked Cystic Fibrosis Genotyping Assay has been developed for cystic fibrosis gene carrier screening in adults of reproductive age, and as an aid in newborn screening and confirmatory diagnostic testing in newborns and children. The blood-based IVD genotypes an independently recommended panel of mutations and variants in the CFTR gene. Additional gene-based tests to evaluate disease-related risk, drug management, and diagnosis/prognosis, are in development by Celera for diseases including coronary heart disease, thrombophilia, liver fibrosis, breast cancer, fragile-X syndrome, and lung cancer.

    In January the firm submitted a Premarket Approval Application to FDA for its KIF6 Genotyping Assay, run on Abbott's m2000™ instrument system. The molecular IVD is designed to detect the KIF6 gene variant as a risk for coronary heart disease independent of traditional risk factors, and as an aid to clinical evaluation prior to statin therapy.

    Celera is separately exploiting its proteomics discovery platform to identify cell surface antigens associated with cancer for potential use in therapeutic antibody, vaccine, and small molecule drug development, as well as diagnostic imaging. The firm is making its targets available through partnering and out-licensing agreement. The most advanced cathepsin K inhibitor small molecule program is in Phase III clinical trials for osteoporosis by partner Merck.

    Also today Celera restated its financial results for Q4 2010 (ended December 25) and full year 2010, due to what it calls accounting errors in consolidated financial statements since 2008. The corrected figures include net revenues of $34.9 million for the Q4 2010, compared to $39.2 million for the same quarter in 2009. For the 2010 year, net revenues were $128.2 million, compared with $156.8 million in 2009. The firm made a net loss of $24.6 million in 2010, compared with a net loss of $25.0 million the previous year.

     


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