Cancer Genetics, a DNA-based diagnostics company focused on developing genomic-based oncology tests and services, announced the agreement to acquire BioServe Biotechnologies (India) for approximately $1.9 million.
Cancer Genetics, a DNA-based diagnostics company focused on developing genomic-based oncology tests and services in US, announced the agreement to acquire BioServe Biotechnologies (India) for approximately $1.9 million, primarily in CGIX stock and other deferred consideration. The transaction is expected to close during the third quarter of 2014 and is subject to customary closing conditions and government approvals in India.
Under the terms of the agreement, BioServe India, headquartered in Hyderabad, will become a subsidiary of CGI, and will be renamed Cancer Genetics India Pvt Ltd. CGI plans on retaining all 33 current employees of BioServe India and further expanding and strengthening the sales and clinical teams in India.
BioServe India currently operates out of a state-of-the-art 14,000-square-foot genomics facility in Hyderabad. BioServe India is backed by Ventureast, a pioneering venture capital institution based in India, which has enabled over 80 seed, early and growth stage businesses in a broad array of sectors including technology, life sciences and clean environment.
BioServe India is a state-of-the-art genomics services provider and molecular kit manufacturer serving both the research and clinical markets. By utilising BioServe India's molecular services, researchers can identify genetic markers, validate drug targets and correlate clinical and molecular data to accelerate the development of new and effective drugs.
Additionally, BioServe India's growing clinical diagnostics capabilities in oncology and next-generation sequencing are well-positioned to serve the needs of improving oncology diagnostics care and management throughout India.
Global cancer costs are expected to reach $458 billion in 2030 according to the American Cancer Society. By allowing the company to scale up operations for genetic analysis, bioinformatics and manufacturing, this acquisition will provide opportunities to create greater cost efficiencies and increase productivity while bringing clinically validated and actionable genomic content into community hospitals and cancer care centres in India and the US.
"With Bioserve, CGI will become better positioned to increase our global presence in personalized cancer care and further improve outcomes and lower costs for cancer patients. The BioServe India team adds immediate positive impact, high-quality revenue, and provides a clear path to an accretive deal for shareholders. The infrastructure and enhanced capacities in next generation sequencing for oncology accelerate our development plans while positioning us to make more effective use of our capital," said Panna Sharma, CEO, Cancer Genetics.
BioServe India is known for providing its clients with cutting-edge genomic services, including next-generation sequencing genotyping and DNA synthesis. Some of their notable customers include Dr. Reddy's Laboratory, Indian Institute of Science Education & Research and the Centre for Cellular and Molecular Biology. BioServe India is certified by ISO-9001:2008, the National Accreditation Board for Testing and Calibration Laboratories (NABL), which is the Indian equivalent to CLIA and the Department of Science and Industrial Research (DSIR). CGI plans to make the Hyderabad based lab CLIA certified in the coming quarters.
Sharma noted: "Another important driver for the transaction with BioServe India was the world-class management and R&D team that's currently in place, as well as a company culture that fits in well with CGI. We believe that this type of deal can serve as a blueprint for future acquisitions and accelerate the delivery of shareholder value."
"We are happy to see that a biotechnology company we nurtured from its early stages is graduating to the next level. We share the belief that genomic services, next-generation sequencing and personalized diagnostics have tremendous potential in the country and can grow multi-fold in the coming years," said Venkatadri Bobba, General Partner, Ventureast.
"It's a proud moment for us at BioServe as we join forces with one of the leading cancer diagnostics providers. There are great synergies which we expect to unlock by combining our visions and teams together," said Rama Modali, Founder, BioServe India.