MDS Inc. agreed to pay Applied Biosystems Group $40 million for a 50 percent interest in intellectual property assets used in the drug discovery and development process.
The agreement expands a joint venture formed between the companies in 1986. Under the new deal, MDS, of Toronto, will acquire part ownership of Applied Biosystems' MALDI (matrix-assisted laser desorption ionization) Time-of-Flight (TOF) mass spectrometry systems and next-generation products under development, together with a 100 percent interest in certain MALDI TOF product-related manufacturing and research and development assets.
"The deal merges two first-class mass spectrometer R&D teams into one," Naomi Nemeth, MDS' director, global external communications, told BioWorld Today. "It is beneficial because it expands the scope of the joint venture between MDS and Applied Biosystems to include this new MALDI product line."
Indeed, in fiscal year 2005, the transaction is expected to contribute $19 million to $22 million to MDS revenues and will have a negligible impact on consolidated earnings per share, the company said.
Going forward, MDS will take over manufacture of the MALDI TOF instruments, which are technologies related to the identification of proteins, Lori Murray, senior manager of public relations for Foster City, Calif.-based Applied Biosystems, told BioWorld Today. MALDI TOF products consist of the Voyager instruments and 4700 Proteomics Discovery System. As part of the deal, Applied Biosystems will continue to market, sell, service, support and provide research support to MALDI TOF.
Applied Biosystems/MDS Sciex Instruments, the entity created when the companies signed the joint venture 18 years ago, is responsible for developing a product line of mass spectrometers drawing on several proprietary platform technologies, including LC/MS/MS triple quadrupole, ion trap, orthogonal MALDI, quadrupole-time-of-flight (Q-TOF instruments) and quadrupole-ion trap (Q-TRAP LC/MS/MS Systems).
The venture serves applications in protein and biomarker discovery, lead optimization, pharmacokinetics and drug metabolism, and certain applied market applications including food and environmental safety.
MDS Sciex is a division of MDS Inc., while Applied Biosystems is an Applera Corp. business. Applied BioSystems' stock (NYSE:ABI) Wednesday fell 14 cents to close at $18.90 while MDS stock (TSE:MDS) rose C1 cent to close at C$18.99 (US$14.53).