Medical Device Link.

Originally Published IVDT September 2002

INDUSTRY NEWS

Richard Park

In a move designed to bolster the company's presence in the molecular diagnostics marketplace, Bayer Diagnostics (Tarrytown, NY) has acquired Visible Genetics Inc. (VGI; Toronto, ON, Canada). Under the terms of the deal, Bayer will purchase VGI's outstanding common shares at a cost of $1.50 per share, and Series A preferred shares at par plus accrued dividends. Total value of the cash deal is $61.4 million.

For VGI, the deal was a logical business decision considering the company's situation and objectives.

"We're obviously a small company, so we concluded that if we were to piggyback our products and expertise onto a much larger company's infrastructure, we would get a much more efficient business model and much faster worldwide penetration," says Richard T. Daly, chief executive officer at VGI. "We looked for partners that could provide that global diagnostic infrastructure, and Bayer was obviously the leading contender."

As part of the transaction, Bayer is acquiring VGI's Trugene HIV-1 genotyping assay, the only FDA-approved HIV sequencing resistance test. The combination of this test and Bayer's current line of HIV and hepatitis C virus nucleic acid tests will support Bayer's strategy to become a leader in nucleic acid diagnostic assay virology.

"We have observed that HIV resistance is becoming a very important tool for making clinical decisions on disease monitoring and how treatments are coming about," says Peter Knueppel, senior vice president at Bayer Diagnostics. "Acquiring Visible Genetics brings an FDA-approved HIV resistance product that enhances our HIV product offering. On top of this, it gives us sequencing technology, which we don't have. So it's not only a product but also a technology access that we get here."

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