Asterand plc (LSE: ATD), a leading provider of human tissue and human tissue-based services to pharmaceutical and biotechnology companies engaged in drug discovery research, today announces it has signed an agreement to acquire BioSeek Inc. (BioSeek), a pioneer in the application of predictive human biology to drug discovery through its unique human primary cell based disease models, subject to Asterand shareholders’ approval. A circular will be sent to shareholders once it has been approved by the UK Listing Authority and a further announcement will be made in regard to this in due course.
BioSeek Acquisition
Asterand has previously stated its strategy of consolidating its leadership position in the global human tissue and human tissue based services market, both organically and through strategically placed acquisitions. The proposed acquisition of BioSeek will be Asterand’s first step in this “buy and build” strategy. The Board believes that BioSeek is highly complementary to Asterand’s business in terms of both products and services offered.
The initial consideration will be US $1.0 million payable by the issuance of Asterand shares. A further payment of up to US $13 million will be payable in 2011 depending on the level of sales growth achieved by BioSeek in the twelve months ended 31 December 2010. If any such further payment is made, the first $3.0 million of such payment will be paid in Asterand shares, and any additional payment will be paid in either cash or shares, at Asterand’s discretion.
BioSeek is a privately held drug discovery services company that has developed unique, proprietary human primary cell based, high throughput assay systems (BioMAP®) designed to replicate the intricate cell and pathway interactions present in inflammatory, autoimmune and cardiovascular diseases. The system predicts clinical activities of a potential drug candidate through comparison of assay results to a proprietary database of data profiles for known compounds. The BioMAP® platform provides pharmaceutical companies with actionable data to guide their lead selection and optimization programmes.
BioSeek is located in South San Francisco, California and has 14 employees. The company was founded in 2000 by Dr. Eugene Butcher, Professor of Pathology, Stanford University, and Dr. Ellen Berg, who is currently BioSeek’s Chief Scientific Officer and a former Senior Scientist at Protein Design Lab and a Post-Doctoral Fellow at Stanford. In addition to service revenue, BioSeek’s growth has been financed by lead venture investors Bay City Capital and Fremont Ventures and a research collaboration and strategic investment by Amylin Pharmaceuticals, Inc. In addition to Amylin, BioSeek has had collaborations with numerous pharmaceutical and biotechnology companies including Merck-Serono, UCB, and Dainippon Sumitomo. BioSeek is also a Phase I & II funded contractor with the United States Environmental Protection Agency’s ToxCast® Program.
Asterand intends to maintain the South San Francisco site and staff. BioSeek’s key managers, including Dr. Ellen Berg, BioSeek’s Chief Scientific Officer, and Dr. Ivan Plavec, Vice President of Business Development, will be joining Asterand’s senior management team. In addition, BioSeek’s CEO Dr. Mike Venuti has agreed to act as a consultant to Asterand for a transition period following completion.
In the year ended 31 December 2008, BioSeek reported audited net revenues of $3.2 million and a pre tax loss of $4.1 million. The audited value of the gross assets being acquired is $10.1 million.
The BioSeek acquisition constitutes a Class 1 transaction for Asterand for the purposes of the UK Listing Rules and accordingly completion of the acquisition is subject to, amongst other things, Asterand shareholder approval. A circular will be sent to shareholders once it has been approved by the UK Listing Authority and a further announcement will be made in regard to this in due course.
Rationale and Benefits of the BioSeek Acquisition: