Research and discovery tools giant Invitrogen Corp. is expanding its portfolio yet again, with an agreement to acquire privately held CellzDirect Inc. for $57 million in cash.
The latest deal, expected to close later this quarter, will provide Invitrogen with CellzDirect's hepatocyte-based cell products and services to complement its existing cell system product lines, which already include primary cells, media, matrices and growth factors. The addition of CellzDirect will allow Invitrogen to "offer a broader array of primary and specialty cell systems and services," said Amanda Clardy, vice president of investor relations of the Carlsbad, Calif.-based company.
Founded in 2001, CellzDirect provides its hepatocyte cells, "a crucial cell type needed in drug discovery and development testing," Clardy said. By using a hepatocyte model, researchers can demonstrate a compound's effects on enzyme metabolism in the liver and show potential drug-drug interactions. The cells also can be used in the study of liver diseases and to help further understand cellular function.
CellzDirect's business is comprised of "tissue sourcing network, high-quality hepatocyte preparations, [a] solid assay platform and superior interpretation of results," Clardy added. CellzDirect product revenues for 2007 are estimated to total about $18 million.
Invitrogen plans to incorporate the smaller firm's operations into its cell culture research business unit, Clardy said, and for now, will maintain CellzDirect's offices in Research Triangle Park, N.C., and Austin, Texas. CellzDirect employs about 90 people.
The latest acquisition falls squarely in line with Invitrogen's aim to expand its offerings in the area of specialty cell systems, which Chairman and CEO Greg Lucier called an "important growth area for 2008," during his presentation earlier this week at the JPMorgan Healthcare Conference in San Francisco.
The firm, which has a market cap of about $4.3 billion, has built up its offerings over the last few years. "We acquired over 15 companies in the 2003-2005 time frame," Lucier said, "to build out a very robust portfolio in cell biology."
That includes its 2004 acquisition of nucleic acid purifier firm DNA Research Innovations Ltd., of Kent, UK, in a deal valued at $65 million; a January 2005 purchase of antibody manufacturer Zymed Laboratories Inc., of South San Francisco, for $60 million; a July 2005 deal for Camarillo, Calif.-based BioSource International Inc. for $130 million in cash, which added cytokine reagents and assays among other products; and its $26 million acquisition of assay firm New York-based Sentigen Holding Co., which closed in 2006. (See BioWorld Today, Oct. 29, 2004, Jan. 11, 2005, July 27, 2005, and Sept. 5, 2006.)
When asked if additional deals are expected in the near term, Clardy said acquisitions will continue "to play a part in our strategy, and as such, we expect we will be doing further acquisitions this year," specifically "tuck-in acquisitions that fit within our stated strategy."
The firm's financial position certainly is solid enough to make that happen. Invitrogen, which pulled in revenues of $315 million for the third quarter - reporting net income of $31 million - had cash and investments totaling $648 million as of Sept. 30.
Its shares (NASDAQ:IVGN) closed at $96.79 Thursday, up $1.24.