Over the recent past,
) has been focusing on developing its diagnostics franchise.
Earlier this month, the company entered into a license and supply
agreement with Singapore based VelaDx. The latter will develop
next generation sequencing-based, in vitro diagnostic tests that
will run on Life Technologies' Ion Personal Genome Machine
platform. Semiconductor sequencing, being a transformative
technology, can make diagnostic tests faster, thereby helping
doctors globally to take better treatment decisions.
Life Technologies has also resorted to the acquisition route
targeted toward building its diagnostics franchise. The company
acquired Compendia Bioscience, a cancer bioinformatics player,
which identifies gene targets for drug discovery and development.
These services are widely used by the pharmaceutical industry.
Based on the oncology data provided by Compendia, Life
Technologies should be able to develop its own tests as well as
collaborate with pharmaceutical companies in companion diagnostic
However, the financial terms of the deal were not disclosed.
The acquisition of Compendia is expected to be neutral to 2012
earnings and accretive to the company's overall ROIC by 2015.
In July, the company went for two tuck-in acquisitions -
Navigenics and Pinpoint Genomics. The acquisition of Pinpoint
Genomics provided Life Technologies with a 14-gene panel test,
Pervenio Lung RS, a risk stratification test for early stage lung
cancer. This test, launched in September, will provide immense
help to a huge patient base by identifying lung cancer patients,
who are at high risk of mortality following surgery, in the early
stages. In addition, the test will also aid prevention and
On the other hand, the Navigenics deal brings in an
established, CLIA-certified laboratory licensed throughout the
U.S. This facility will be employed for design and validation of
new diagnostics assays.
Life Technologies also has a Master Development Agreement with
) for companion diagnostic projects. The collaboration with
Bristol-Myers is in line with the company's strategy to build
partnerships with pharmaceutical majors for companion diagnostic
development including participation in early-phase clinical
Life Technologies enjoys a strong position in the life
sciences market. We are optimistic about the company's focus on
its diagnostics franchise, which holds potential. However,
economic uncertainties in Europe and unfavorable currency were
major headwinds for the company during the last reported
We have a 'Neutral' recommendation on Life Technologies.
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