French IVD powerhouse bioMérieux has finalized its acquisition of BioFire Diagnostics Inc, a privately held US-based company specializing in molecular biology. With the acquisition, bioMérieux expects to consolidate ?its position as a major player in infectious disease diagnostics? and strengthen its presence in the United States.
The bioMérieux agreement to purchase BioFire was first announced in September 2013. Formerly known as Idaho Technology Inc., BioFire is based in Salt Lake City. Terms of the transaction include a $450 million acquisition price plus BioFire’s net financial debt of about $35 million. The acquisition will be funded through bioMérieux’s inaugural issue of 7-year bonds.
Since its establishment more than 20 years ago, BioFire has developed, produced, and marketed a number of automated polymerase chain reaction (PCR) molecular biology systems. The company holds more than 85 patents related to PCR, and has used its extensive patent portfolio to market nearly 200 products to the clinical, research, and military markets. BioFire’s US customers include the Department of Health and Human Services, the Department of Defense, state and local law enforcement agencies, researchers, and medical technicians across a spectrum of fields and industries.
More recently, BioFire developed FilmArray, a CE-marked and FDA-cleared multiplex PCR system that integrates all molecular diagnostics steps—sample preparation, amplification, detection, and analysis—into a single system. The company manufactures and distributes the FilmArray system to hospital-based clinical laboratories across the US and EU.
The FilmArray system represents an advance in user-friendliness and multiplex infectious disease testing capability for hospital clinical labs. Requiring only 2 minutes of hands-on time, the system has about a 1-hour turnaround time, and each panel simultaneously tests for more than 20 pathogens.
Introducing a novel methodology to infectious disease molecular diagnostics, FilmArray uses a “syndromic approach” that is based on analyzing a syndrome (i.e., a set of symptoms) and, with a single reagent, identifying the responsible disease-causing organisms, whether they are viruses or bacteria. FilmArray assays are currently available for two CE-marked and FDA-cleared panels: a respiratory panel and a blood culture identification panel.
Company representatives believe the two companies present strong strategic synergies, especially in marketing, manufacturing, and innovation. FilmArray is a key differentiating asset for the development of bioMérieux’s franchise in infectious disease diagnostics, its primary area of expertise. FilmArray will benefit from the global and dynamic bioMérieux commercial network. Additionally, bioMérieux will contribute its capabilities to the automation of reagent production, thereby optimizing manufacturing costs.
“The acquisition of BioFire creates strong growth opportunities,” said Jean-Luc Belingard, chairman and CEO of bioMérieux. “FilmArray meets perfectly the growing hospital laboratory demand for high medical value solutions in infectious disease diagnostics, thus ideally complementing our current product offering—especially for emergency situations and critical care.”
BioFire’s site in Salt Lake City will become bioMérieux’s hub for its expansion in molecular biology. R&D teams from the two companies will contribute to the development of new FilmArray panels.
Kirk Ririe, founder and CEO of BioFire, said: “We are pleased to see the R&D teams from both companies join forces to enrich FilmArray’s menu, thus ensuring the continued success of this system, which stands at the forefront of innovation. The legacy of what we have built at BioFire, as a result of the contributions of so many talented individuals, will now continue under the stewardship of bioMérieux, a company similarly committed to improving patient care worldwide.”
In 2014, revenue recognized from BioFire should increase the group’s sales by about $80 million. It is expected that rapid development of BioFire will subsequently act as a key growth driver for the group, resulting in an increase of 100 to 200 basis points in bioMérieux’s organic sales growth over the 2015–2017 period. In light of bioMérieux’s ambitious plan to stimulate the development of this new line, in 2014 and 2015 the acquisition is expected to have a dilutive effect on current operating income before nonrecurring items.
The companies will begin the integration process by leveraging their synergies to drive FilmArray sales and menu expansion. In order to meet the expectations of BioFire’s biodefense customers in the United States, a wholly owned subsidiary dedicated to biodefense activities will be established. All the BioFire personnel, activities, and equipment associated with the defense business will be physically transferred to a protected and separate site in Salt Lake City.