As IBO noted in its annual review of instrument and lab product company acquisitions (see IBO 11/15/09), the number of acquisitions picked up as 2009 progressed. This pace could continue, according to indications from several major companies. QIAGEN CFO Roland Sackers told Bloomberg in November that the company could spend as much as $200–$500 million on acquisitions in 2010, commenting that prices have declined in the past 12–18 months. He stated that QIAGEN is looking at firms in the areas of molecular diagnostics and applied testing. Thomas Schweins, vice president of Marketing and Strategy for QIAGEN, told The Financial Express that the firm would consider acquisitions in India. The company opened its first office in India this year. QIAGEN had cash and cash equivalents of $861.3 million as of September 30.

Industrial conglomerates have also expressed interest in growing their lab product businesses, especially for life sciences. Bloomberg reported in October that General Electric CEO Jeffrey Immelt said that GE is interested in joint ventures and purchases of shares in firms in the life science area. Similarly, Danaher Chairman and CEO Lawrence Culp told investors in November that the firm’s Medical Technology unit is one business the company is targeting for acquisitions. As Mr. Culp noted in the company’s third-quarter earnings call, Danaher typically does between 12 and 15 smaller acquisitions each year, but the company is also considering larger deals. As of October 2, Danaher had cash and cash equivalents of $1.6 billion. Corning also has plenty of cash for acquisitions. The company had cash and cash equivalents of $2.0 billion as of September 30. Corning spent $400 million this fall to purchase life science consumables supplier Axygen Biosciences (see IBO 9/30/09). Corning President and COO Peter Volanakis told The Wall Street Journal last month that it is planning more acquisitions and is considering purchases for all of its business units.

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Zygem: Innovative Extraction (Vol. 18, No. 17, p. 10)

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Zygem’s search for organisms at the edge of the world led to the introduction of an alternative to standard DNA extraction processes. The company’s DNA extraction kits are based on a proteinase derived from Bacillus EA-1, discovered by a team of bioprospectors in Antarctica over 20 years ago. Zygem’s kits, which incorporate the enzyme, can extract DNA in one step, within 20 minutes and in a single tube. In contrast, DNA extraction typically takes 90 minutes, and is currently undertaken using sonicators, lysing agents, detergents and magnetic beads. According to the company, Zygem’s method is the first single-tube DNA extraction technique on the market.

The company has three product lines for the pharmaceutical, forensic and agriculture markets, each with kits for multiple sample types. Paul Kinnon, CEO of Zygem, explained to IBO that biomedical research, such as single-cell work for oncology and cancer research, is currently the fastest-growing, but not the only, end-user market for the company. “We are expanding into the forensics market and have a small market for livestock testing as well, where you can tag and monitor herds.” According to Mr. Kinnon, Zygem’s livestock products are currently selling well in Asia. The company’s most popular kits are its tissue, bacteria and insect kits.

The advantages of Zygem’s technology and the company’s strategy facilitated the products’ adoption. “The historical market has been around for 15–20 years, led by QIAGEN and others, so adoption of a new technology is always very difficult. . .However, we’re a destructive technology because we’re easier, simpler and lower cost than most other methods,” said Mr. Kinnon. He explained how even with a “destructive technology,” the company had to make a soft entrance into the market. “We’ve purposely avoided some of the bigger applications, like plasmid and large-volume blood, purely because going into that marketplace we would need to do extra development work. So we focused on the areas that we knew were beneficial, where we could bring our product to market very quickly.” He added, “The other applications we’ll go into later on, but we’re not in there yet.”

The company plans to introduce products for isothermal DNA amplification and microbial fingerprinting for identification. These products could give Zygem a stronger foothold in the research market and, more significantly, from the company’s perspective, the diagnostic market. “We do see a massive opportunity for [these products] in the clinical diagnostics market in the future, and third-world applications, such as being able to do extraction and detection remotely in difficult countries and terrains without all the hardware that you’d need in a general laboratory today.” The company is also increasing its diagnostic presence by integrating its kits for sample preparation with clinical diagnostic tests and amplification kits from companies such as Advalytix and Rubicon Genomics. “[Zygem is] one of the only companies in the marketplace to allow the integration of our sample prep on the front end of somebody else’s kit for diagnostic applications,” said Mr. Kinnon.