BioWorld International Correspondent
BORNHEIM, Germany LION bioscience AG intends to acquire U.S.-based NetGenics Inc. in exchange for approximately 1.12 million LION shares. LION estimated the deal to be worth approximately US$17 million.
Privately held NetGenics, of Cleveland, builds integrated informatics solutions for life sciences.
The merger “will allow LION to deliver a one-stop-shop platform of integrated bio- and cheminformatic technologies across both content and application,” Lion CEO Friedrich von Bohlen said in a conference call.
NetGenics’ core technology is its data integration tool, DiscoveryCenter, which simplifies connecting flat file databases to relational databases and integrates commonly used desktop tools such as Microsoft software applications. Flat file databases often are used to store huge amounts of biological data, LION spokeswoman Andrea Kreisselmeier said. Relational databases often are used for chemical data, she said.
The integration of biological and chemical information is key, and has been a missing link for large knowledge management solutions and unattainable for life science organizations until now, LION said.
The president and CEO of LION’s U.S. division, Rudolph Potenzone, said, “DiscoveryCenter understands the various types of scientific objects that can be searched, manipulated on screen and used in reports such as protein and DNA sequences, gene/loci, gene families, targets and small molecules.” It works on both web- and desktop-based products, Potenzone said.
“[DiscoveryCenter] forms the multidisciplinary middle-tier software platform for the life science industry,” von Bohlen said.
The platform is expected to allow LION to deliver its bioinformatics solutions not only as a custom-made service, but also as a modular off-the-shelf package for a broader audience in the life science communities, LION said.
“Customers are the big winners with this merger,” Caroline Kovac, general manager of IBM Life Sciences, said in a prepared statement, adding, “There is tremendous synergy between LION and NetGenics.” IBM collaborates with both companies.
LION expects NetGenics’ current collaborative partner Schering AG, of Berlin, to become a customer for the fully integrated knowledge management solutions, including software and project management. Fully integrated knowledge management is the biggest kind of service LION offers. Currently LION provides such service to Bayer AG, of Leverkusen, Germany, in a deal worth US$125 million plus milestones and potential royalties. Adding Schering to the fully integrated knowledge management solutions could be a double-digit million-dollar deal, Kreisselmeier told BioWorld International.
NetGenics was founded in 1996. As of December it had 60 employees. “We have absolutely in mind to continue with NetGenics as an entity in Cleveland with the employees and also in particular with the management team,” von Bohlen said.
Von Bohlen expects the acquisition to be completed this quarter. The shares LION pays for NetGenics will be subject to lockup for a 180-day period after closing. Upon completion of the transaction, NetGenics is expected to become a wholly owned subsidiary of LION.