SurModics is taking over BioFX Laboratories for $11.3 million in cash to broaden its offerings within the in vitro diagnostics business.
"Currently constituting approximately 30 percent of SurModics' total revenue, our In Vitro Technologies business unit is performing exceptionally well, as evidenced by its 35 percent growth in year-to-date revenue," says Bruce Barclay, president and CEO of SurModics. "The additional investment in our in vitro business signifies both its importance to SurModics and our confidence in the potential benefits of this market to our future." The worldwide market for in vitro diagnostic tests reportedly is estimated to exceed $20 billion.
BioFX will operate as part of SurModics’ In Vitro Technologies business unit. SurModics will pay an additional $11.4 million in cash upon the achievement of specified revenue targets.
"BioFX is particularly strong in colorimetric substrates, where it continues to displace competitive technologies,” points out Doug Astry, general manager of SurModics' In Vitro Technologies business unit. “In addition, BioFX has a growing presence in chemiluminescent substrates, which is a larger segment of the market."
SurModics expects the transaction to be accretive to fiscal 2008 earnings. BioFX generated sales of $3.5 million in calendar year 2006, a 16% year-over-year growth, according to SurModics. The company is profitable and cash flow positive.
This is SurModics’ second acquisition of the month. On August 1, the company bought Brookwood Pharmaceuticals from Southern Research Institute for $40 million upfront and $22 million in milestone-based payments.