By Brady Huggett
Xenogen Corp. completed its acquisition of DNX Transgenic Sciences as it waits to price its estimated $82 million initial public offering, filed in late September.
"DNX will be fully integrated," said Pamela Reilly Contag, president and co-CEO of Xenogen. "We acquired DNX, but we really respect the DNX brand name."
Contag said the acquisition was finalized through deliverance of Xenogen stock to MDS Inc., of Toronto, the indirect parent company of DNX.
Xenogen, of Alameda, Calif., has intellectual property for transgenic animals, Contag said, and the acquisition of DNX is beneficial for Xenogen for several reasons.
"What DNX does for us is give us increased capacity for making transgenic animals," Contag said. "They have a great know-how in making and breeding transgenic animals, and they have a great location right in pharmaceutical alley. That location is important for the proximity to our customers on the East Coast."
DNX is located in Cranbury, N.J.
Contag said that transgenics could be the next big area for industrialization.
"The ability to industrialize to collect huge amounts of physiological data has not come at the animal level yet," Contag said. "But we will be able to industrialize that collection of information."
Besides the acquisition, Xenogen and MDS began a relationship under which MDS will become a Xenogen customer and have access to its services for its own customers, Contag said. Financial terms were not disclosed.
Xenogen filed for its IPO on Sept. 29 and is tentatively scheduled to set its price in late November. The offering is being led by UBS Warburg LLC, of Stamford, Conn., with Dain Rauscher Inc., of Minneapolis, and Prudential Securities Inc., of New York, also participating. The proposed Nasdaq symbol is XGEN.
Xenogen has developed and is manufacturing and marketing a novel system designed to improve the efficiency and productivity of drug discovery and development by facilitating biological assessment. Its in vivo biophotonic imaging system allows the measurement of light emitted from inside a living animal, enabling tracking and monitoring of molecular mechanisms of disease and the impact of drugs on these mechanisms. It uses a luciferase gene to produce a light-emitting enzyme and it can be inserted into a tumor cell or pathogen, allowing tracking and monitoring of the progression of disease within a live animal, as well as the effectiveness of related drugs. Luciferase also can be inserted directly into the genome of an animal to serve as a reporter of the activity of another gene.
DNX Transgenic Sciences offers transgenic mouse and rat production, homologous recombination in murine embryonic stem cells, blastocyst injection and a wide variety of transgenic and knockout related support services.
Xenogen had $31 million in cash and short-term investments as of June 30 and about 23 million shares outstanding. Xenogen is in a quiet period and could not comment on the offering.
Contag said the acquisition of DNX is a good fit.
"It's a perfect marriage of technologies," she said. "It gives us a great patent and knowledge base for making transgenic animals."