Medical Device Link.

PerkinElmer Inc. (Waltham, MA) completed its acquisition of Sym-Bio Lifescience (Shanghai), a provider of diagnostics instruments and related reagents, in a cash transaction equivalent to $63.7 million. The acquisition is expected to have no material impact on PerkinElmer’s adjusted earnings per share for 2009 and be slightly accretive in 2010.

“PerkinElmer and Sym-Bio Lifescience are pleased to have the opportunity to introduce new products to advance the health of mothers and children in China, and assist in reducing the threat of major infectious diseases among at-risk patient populations,” said Ann-Christine Sundell, president, genetic screening, at Perkin
Elmer. “The acquisition strongly positions PerkinElmer in the fast-growing diagnostics market in China and expands our access to the market, as well as our offerings portfolio.”

Sym-Bio Lifescience is a major supplier of diagnostics to hospitals in China, particularly in the area of infectious diseases, which represents a significant addition to PerkinElmer’s diagnostics portfolio. With this acquisition, PerkinElmer has doubled its access to the hospital market segment in China, offering a larger base from which to expand its prenatal and newborn screening business in the country.

“In China, we have worked for many years with the government to expand screening of newborns and pregnant women for various disorders and complications,” said Sundell. “It has become clear that the Chinese government is very supportive of this. It’s part of the government’s current five-year program, which emphasizes focusing on how birth defects can be reduced in China. So it’s a good indication that the markets PerkinElmer is serving in China have a focus on such healthcare issues.”

The addition of Sym-Bio’s infectious disease products also complements PerkinElmer’s worldwide position in prenatal and neonatal screening, and provides a new line of diagnostics for expansion of the company’s regional and global offerings. In addition, as part of the acquisition, PerkinElmer gains access to substantial manufacturing plant capacity in Shanghai and the surrounding area, where the company will be able to expand local production capabilities for a number of PerkinElmer products in China, in addition to the diagnostics portfolio.

“While it is a clear focus of the Chinese government to prioritize healthcare, and it is driving a lot of money into improving healthcare, it would also like to stimulate the local manufacturing of the local IVD products,” said Sundell. “There are essentially two IVD markets in China. There is the import market with all of the IVD products coming into China. And then there’s the fast growing local market, especially the high-tech, high-quality locally manufactured IVD products. The latter is the market that the acquisition of Sym-Bio is really going to address. But moreover, it gives PerkinElmer the opportunity to run with two brands both serving the important import market and the fast growing local market.

“Overall, the Chinese market is a great long-term growth opportunity for PerkinElmer. For example, it’s been estimated that China spends about 75 cents to 1 dollar per person in diagnostic services per year, compared to $20 per person in Europe and the United States. So even a small increase in the utilization of diagnostic services in China would immediately have an enormous impact on the market size there.”

On the exact same day the Sym-Bio purchase was announced, PerkinElmer also announced its acquisition of the genetic screening business of Surendra Genetic Labs Pvt Ltd. (Chennai, India), which focuses on fetal, maternal, and newborn health. Surendra Genetics Labs was founded by Dr. S. Suresh, a leading fetal medicine expert and ultrasonologist. The laboratory provides testing services for pregnant mothers and newborns.

“The acquisition of Surendra Labs is a key component of PerkinElmer’s global commitment to facilitate access to advanced fetal, maternal, and child health screening and diagnostic technologies and services for the Indian public and clinicians,” said Sundell. “This will enable PerkinElmer to extend its offerings to ensure better health outcomes in pregnancy and of newborns, and introduce new technologies to the Indian market.”

According to Sundell, India is less advanced as a market than China, especially in the diagnostics sector and in early preventive healthcare and prenatal screening. By having its own laboratory in India, PerkinElmer has become more connected to the local physicians and consumers because in India, it is more about the private pay market in the areas being served.

“Therefore, education and awareness building is a key for us in the Indian marketplace, and then to have direct access to the consumers and physicians,” said Sundell. “Acquiring this lab enables PerkinElmer to drive that awareness and education building in a totally different way. Also, since India places an enormous amount of emphasis on the health of children, it is a market that has a very high potential for PerkinElmer. So even though India is still an emerging market, there are capabilities for physicians to get state-of-the art technologies and laboratory services. PerkinElmer feels such developments are going to be very beneficial for the Indian market, meaning that it will be very beneficial for PerkinElmer as well.