By Randall Osborne
West Coast Editor
Aiming to set up shop on the West Coast, Albany Molecular Research Inc. (AMRI) is buying New Chemical Entities Inc. (NCE), near Seattle, for $22.4 million, with an agreement to take on about $600,000 in outstanding debt.
NCE, with 30 scientists and support staff, provides contract services, said David Albert, director of communications for Albany, N.Y.-based AMRI.
"It's a chemistry-focused company, and the genomics focus is not a large one, but they do bring us a little bit into [that] world," Albert said.
AMRI will account for the acquisition of Bothell, Wash.-based NCE as a purchase, and is expected to add about $2 million in revenue this year as a result, but incur a $2.5 million loss as well, although the deal is not expected to affect earnings per share in 2001.
In fact, the company's latest guidance says earnings per share are expected to range from 87 cents to 91 cents, updated from an earlier estimate of 85 cents to 90 cents. Growth is estimated at 23 percent to 28 percent, due to AMRI's contract service business and royalties paid by Frankfurt, Germany-based Aventis SA from sales of the antihistamine Allegra (fexofenadine HCl).
NCE's services include isolation, purification, structure elucidation and the supply of natural-products libraries from microbial and botanical sources; computational and combinatorial chemistry (which also make up the core of AMRI's work), including chemoinformatics, proprietary databases and proprietary data-mining capabilities; chemical synthesis; pharmacogenomics; and toxicogenomics.
The deal, expected to be completed next month, comes about one year after AMRI's stock-swap acquisition, valued at $20.6 million, of EnzyMed, recently renamed the AMRI Biocatalysis Division, in Iowa City, Iowa.
Right away, AMRI's customers get access to NCE's natural-products libraries for research, Albert said.
"It's over 100,000 natural products, diverse compounds drawn from botanical and microbial sources, and microorganisms," he told BioWorld Today.
NCE also has databases related to the compound libraries, and has developed software that "integrates chemistry and biology," Albert said, plus software to manage information generated.
"It's a nice complement to the compound libraries," Albert said.
AMRI may expand the Bothell facility, which provides better access to customers in Asia as well as the West Coast, from the current 30 employees.
"Their facility can house 70 staff [members], so that's an option for us," Albert said. "I don't know if it's definite at this point."
In October, AMRI raised $126.75 million through the sale of 3 million shares at $42.25 per share, well above its target of $105 million. (See BioWorld Today, Oct. 9, 2000.)
AMRI's stock (NASDAQ: AMRI) closed Wednesday at $61.375, up 4.7 cents.