Sequenom Inc. completed its acquisition of Axiom Biotechnologies Inc., paving the way to fold Axiom's cell biology program into Sequenom's gene discovery business.
The merger will be made easier because not only are both companies based in San Diego, but also the company headquarters are separated only by a parking lot, said Sequenom Vice President of Corporate Development Robin Jackman. The respective CEOs knew each other, and discussions to join the companies began in June, he said.
"We had an outstanding need and a plan to build [a] cell biology [program], which fit pretty nicely with what they had on their side," Jackman said.
Sequenom issued about 1.7 million shares in connection with the transaction, shares that will be restricted from sale for at least one year, Jackman said. Based on Tuesday's opening price of $2.43, the deal was valued at about $4.1 million. The deal, first disclosed Aug. 21, gives Axiom about 4.3 percent of the combined company, based on the 37.53 million shares Sequenom reported outstanding as of June 30. Sequenom's stock (NASDAQ:SQNM) fell 26 cents Tuesday to close at $2.17.
Jackman said it is difficult to build a business that includes cell biology and tissue culture, and Sequenom acquired Axiom at what he said was "an attractive value."
Founded in 1995, Axiom came with a fully equipped cellular biology laboratory and biological research capabilities, such as target validation and assay development, as well as capabilities in medicinal chemistry.
"For us, it was really about the people and the expertise and the core competencies they had," Jackman said.
Axiom has about 25 employees, and "the vast majority" will join Sequenom's almost 250 employees, he said.
Axiom also had several ongoing collaborations, which Sequenom will maintain, he said. One such collaboration is with UCB SA, of Brussels, Belgium, to discover drugs for the treatment of allergic diseases and asthma. Axiom also has a collaboration that gave Biacore International AB, of Uppsala, Sweden, an exclusive license to all of Axiom's fluorescent cell-based assay technology with the exception of flow cytometry-based applications.
In April, Axiom entered a collaboration with Sosei Co. Ltd., of Tokyo, to use Axiom's physiogenomics technology to identify new indications for drug candidates from Sosei's drug reprofiling platform collection. Axiom is profiling those compounds for clinically relevant activities.
Sequenom brings genetically validated targets to the equation from its population genetics approach. The company has smaller operations in Boston, Newfoundland, the UK, Germany and Australia, primarily for the purpose of sample and DNA collection, Jackman said.
The timing of the acquisition is very good, he said, because Sequenom has a "series of targets" coming through its pipeline.
"We can take a target and validate it in humans," he said, noting that Sequenom believes it has targets that have a major impact in the morbidity of the population.
"We know it has major impact in humans, but maybe it is a target that no one has looked at before, so the next step is building biology around that," he said.