West Coast Editor
Continuing a busy year, Applied Biosystems Group entered a deal to buy out Agencourt Personal Genomics Inc. for about $120 million in cash, gaining high-throughput analysis of DNA and RNA to supplement the existing platform.
Specifically, APG - incorporated in 2005 as a separate entity owned by Beverly, Mass.-based Agencourt Bioscience Corp. - brings its "massively parallel fluorescence sequencing by stepwise ligation technology," which is applicable to de novo genome sequencing, medical sequencing, high-throughput gene expression and genotyping.
"It's complementary to the systems we sell now, that are the gold standard for DNA sequencing," said Peter Dworkin, who handles investor relations and corporate communications for Applied Biosystems, of Foster City, Calif. Part of the Applera Corp., AB sells various instrument-based systems, plus software and services to life sciences firms.
The deal, expected to close in the third quarter, likely will be dilutive for AB in fiscal 2007 (about 6 cents per share) and 2008, primarily due to spending on research and development, commercialization activities and acquisition-related amortization.
Details about the impact of the buyout are pending a valuation analysis to nail down the exact purchase price.
APG's approach combines single-tube micro-bead sample preparation with high-throughput multicolor fluorescence imaging. The sequencing chemistry uses ligation probes, which are said to provide high-quality data compared to polymerase-based methods, along with high accuracy without homo-polymer sequencing errors that can occur with other modes of next-generation sequencing.
What's more, the APG system can use "paired-end" reads, which are helpful in pathogen sequencing and whole genome sequencing. The system generates faster base-pair reads, with improvements to be made.
"They have a limited number of prototype systems" already up and working, Dworkin said, including one in APG's lab that runs collaborators' samples. "They've been sequencing bacteria; but if you do an extrapolation, we believe the system would deliver on the [often-cited goal of mapping] the full human genome for $100,000," though that wouldn't be the commercial use, he added.
Instead, the system would be deployed for medical sequencing, or re-sequencing, of genes and regulatory regions, looking for single nucleotide polymorphisms "on a very large scale," he said.
"One of the reasons we chose this technology from among the 40 or so that were out there, is that it's very commercializable," Dworkin said. "There are multiple applications we think it can support."
Assuming the buyout goes as planned, AB will start placing systems with early access customers next year.
In March, the firm completed its $35 million acquisition of the research products division of Austin, Texas-based Ambion Inc., which provides RNA analysis tools. The firm will stay in Austin. That news followed word in January that AB had entered an exclusive collaboration agreement with Hitachi High-Technologies Corp., an affiliate of Hitachi Ltd., of Tokyo, to develop and commercialize capillary electrophoresis-based DNA analysis methods. The deal amends an existing relationship that began in 1997.
AB's stock (NYSE:ABI) closed Tuesday at $29.12, down 74 cents.