Ventana Medical Systems acquires Calif. bioscience company

September 12, 2007

By hammersmith

Ventana Medical Systems, Inc., of Oro Valley, a worldwide leader in cancer diagnostics, has announced the purchase, for $28.9 million in cash, of Spring BioScience Corp., a Fremont, Calif. developer and distributor of antibodies and other reagents used in diagnostic tests. Ventana also pledged an additional $11.7 million to Spring BioScience shareholders if the acquired company achieves certain scientific benchmarks.

Ventana’s core business is the development, production, and marketing of instruments and reagent systems that automate tissue preparation and slide staining in clinical and drug-development settings. This technology has put Ventana at the forefront of personalized medicine–the application of medical advances, particularly in genomics and pharmacogenomics, to the development of individually targeted patient treatments.

The acquisition of Spring BioScience, which Ventana intends to operate as a wholly-owned subsidiary, will reduce Ventana’s reliance on outside suppliers of antibodies and other reagents used in diagnostics. Anticipating that a shorter supply chain will yield more profitable operations, Ventana also revised upwards its earnings and revenue projections for 2008 and 2009.

Bruce Cranna, an analyst with Cowen & Co. in Boston, told the Arizona Daily Star that stronger earnings and revenue forecasts may complicate the efforts by Roche AG, one of the world’s largest pharmaceutical companies, to seize control of Ventana. In late June, Roche made an unsolicited offer to buy all of the common shares of Ventana’s stock. Ventana’s board of directors unanimously rejected Roche’s offer.

Ventana President and CEO Chris Gleeson said that the purchase of Spring BioScience “represents the achievement of our goal to establish and grow resources for product development and antibody design within our organization. We now have the full range of internal capabilities to develop and distribute tissue-based cancer diagnostics to pathologists and patients around the world.”

Ventana holds a position of prominence in the Arizona bioscience sector in part because of its significant size: It has 660 employees in southern Arizona and now projects annual revenue of $480 million to $500 million by 2009. Also, it represents an early Arizona success story in “technology transfer,” the commercialization of university research; University of Arizona pathologist Thomas Grogan founded Ventana in 1985 after inventing a device to automatically stain and mount tissue on slides for microscopic analysis.

For more information:

Ventana Medical buys Calif. Company,” Arizona Daily Star, 09/06/2007

Ventana Medical Systems news release, 09/05/2007