Biotage will focus on discovery chemistry, while Qiagen gains molecular diagnostic platform.
Biotage is selling the biosystems division and its shares in Corbett Life Science to Qiagen for $53 million. Qiagen has agreed to pay an additional $7 million if certain performance and milestone criteria are met by the end of 2012.
Biotage says that it will focus on its discovery chemistry operations and will consider acquiring complementary products or businesses. Qiagen will benefit, in particular, from the platform launched earlier this year by the biosystems segment that expands its offerings into the diagnostic field.
After adjustment for inter liabilities that Qiagen will take over at closing, Biotage will receive net cash of approximately $50 million. The capital gain for Biotage is expected to be approximately SEK 220 million, or almost $31.7 million, before taxes.
As part of its efforts to expand the discovery chemistry division, Biotage would like to enter areas like environmental and food analysis. Biotage also believes in the possibilities of further developing and broadening its microwave technologies for new applications.
During the fourth quarter of this year, Biotage will act as a distributor for Qiagen. According to a separate transfer service agreement covering the next year, it will also provide certain administrative services to Qiagen.
Biosystems’ Pyrosequencing® technology reads DNA sequences of up to 100 base pairs in real time. This platform was automated with the development of PyroMark™ instrumentation, a real-time sequencing detection system.
In the 12 months ending June 30, the biosystems segment generated revenues of about $14.6 million, which was 21% of Biotage’s total revenues. During this period, operating profit was slightly over $4 million compared to overall operating profit of $6.11 million. In addition, Biotage received dividends from Corbett, in which it owns 17% of shares, of about $1 million.