Apologies to Nigel, who will have three messages in his Inbox thanks to a communication problem between my PC and SI's posting server. Haven't we looked (not closely, but a couple of folks follow it a bit?) at ORCH before? What do y'all think of this munch on their part?
>>PRINCETON, N.J., Oct. 1 /PRNewswire/ -- Orchid BioSciences, Inc. (Nasdaq: ORCH - news) today announced that it has signed a definitive agreement to acquire Lifecodes Corporation, a leading provider of identity genomics testing for forensics and paternity, in an all-stock agreement. Under the terms of the agreement, which have been approved by the Boards of Directors of both Orchid and Lifecodes, Orchid will issue approximately 6.5 million new shares of common stock in the transaction in exchange for 100% of the outstanding equity of Lifecodes. The merger is subject to approval by Lifecodes' stockholders and other closing conditions, and is expected to close in the fourth quarter of 2001. The transaction will be structured as a tax-free share exchange. Further financial details were not disclosed.
Strategic Highlights of the Acquisition:
Orchid expects that its acquisition of Lifecodes will:
* Contribute to the approximate doubling of Orchid's 2002 revenues,
projected to total well over $50 million for the combined companies
* Enable the launch of a new Orchid Diagnostics unit with initial annual
product sales estimated at more than $12 million
* Make Orchid the U.S. market leader in established markets for identity
genomics, which have estimated annual worldwide sales of approximately
one half billion dollars
-- By consolidating leadership in the identity genomics market and
applying its advanced genetics technologies to the sector, Orchid intends
to:
- Achieve pricing leadership
- Significantly lower costs
- Develop new product and service offerings
* Make Orchid the largest DNA diversity testing company in terms of
revenue and capacity for performing accredited testing
* Expand Orchid's international network to 8 accredited genotyping labs
for genetic diversity analysis
* Be cash accretive in about 12 months
* Accelerate Orchid's expected time to profitability by approximately one
year
* Balance Orchid's high potential SNP and pharmacogenetics businesses
with a large, stable, growing base of recurring revenues
``Orchid is already a leading provider of services and products for genetic diversity analysis,'' said Dale R. Pfost, Ph.D., chairman, president and chief executive officer of Orchid. ``By acquiring Lifecodes, we become the U.S. market leader in identity genomics for forensics and paternity. We intend to use this leadership and Orchid's advanced technologies to transform these markets. We also plan to leverage our role as one of the largest providers of genotyping services in the world to offer expanded service and product offerings enabled by Orchid's proprietary SNP technologies. We believe that this will be a very positive combination for our customers and for our existing and new employees. We also expect that this acquisition will be good news for our shareholders, providing the balance of a stable and growing revenue base with the upside potential of Orchid's leading SNP analysis and pharmacogenetics businesses, as well as earlier profitability.''
A Strategic Union
As a result of acquiring Lifecodes, Orchid expects to become the market leader in identity genomics testing in the United States. Identity genomics uses the genetic variability markers contained in DNA to definitively establish a link between a sample and a specific individual. Orchid intends to use its new leadership position to structure its identity genomics business for greater efficiency and cost effectiveness, rationalizing pricing and applying Orchid's proprietary SNP scoring technologies to industrialize the DNA analysis process. Its new global Orchid Cellmark Forensics unit, which reunites pioneering Cellmark businesses on both sides of the Atlantic, will carry one of the most respected names in the DNA forensics field.
Orchid and Lifecodes also have complementary businesses in DNA diagnostic products. Lifecodes' product line for HLA transplantation testing, when combined with Orchid's Elucigene diagnostic kit business, provides the foundation for the new Orchid Diagnostics unit.
Plans to achieve synergies by leveraging complementary assets and by selective infrastructure rationalizations will be formulated and implemented over the coming months. The transaction, excluding merger-related expenses, is not expected to materially affect Orchid's previously announced net operating results projections for 2001.
``This acquisition enables Orchid to leverage the existing assets of our GeneScreen and Cellmark U.K. units to become a consolidator in the heretofore fragmented, but potentially highly attractive identity genomics market,'' said Donald R. Marvin, chief operating officer and chief financial officer of Orchid. ``We also acquire a robust DNA diagnostics business that provides the critical mass needed for the establishment of Orchid Diagnostics. As a result of this acquisition, we expect to be able to roughly double our revenue next year and to accelerate our profitability by about 12 months, to early 2004.''
The combined company will have a network of eight accredited genetic testing laboratories in the U.S. and Europe. Orchid estimates that these labs currently perform more than 18 million genotypes per year in such diverse applications as forensics analysis, paternity determinations, HLA tissue typing for bone marrow and organ transplantation, as well as SNP scoring for attribute testing for agricultural breeding programs, for biomedical research, including whole genome and chromosome mapping and linkage disequilibrium studies, and for drug discovery and development programs, including clinical pharmacogenetic studies.
``Integrating our distinguished brand equities in forensics, paternity and HLA testing with Orchid's complementary businesses and its leading genotyping technologies should be a powerful combination,'' said Walter Fredericks, president and chief executive officer of Lifecodes. ``Together, I believe that we can achieve the critical mass necessary to rationalize and progress genetic diversity markets and to leverage the ever-expanding opportunities for genetic diversity analysis in the post-genomic era.'' Mr. Fredericks will become an advisor to Orchid following the close of the transaction.
About Lifecodes
Founded in 1982, Lifecodes is a leading provider of public and private paternity testing services and the largest provider of commercial DNA forensics services in the U.S. Its Cellmark unit based in Germantown, Maryland is a widely respected leader in the DNA forensics field whose customers include law enforcement agencies involved in many high profile criminal cases, such as the OJ Simpson murder trial and the Unabomber prosecution. Lifecodes has a number of ISO and CLIA-accredited laboratories in the U.S. It also has a profitable business selling diagnostic testing kits and reagents to clinical laboratories for HLA tissue typing for organ and bone marrow transplantation, producing these products at its automated, accredited manufacturing facility in Stamford, Connecticut. Lifecodes has an agreement with Luminex Corporation to manufacture and market HLA testing kits designed for the Luminex microsphere-based LabMAP system. LabMAP technology enables laboratories to decrease the cycle time and cost of HLA testing.
About Orchid:
Orchid BioSciences, Inc. is a leading provider of products, services and technologies for SNP scoring and genetic diversity analyses. Orchid has developed SNP-IT(TM), its proprietary SNP analysis technology, and markets SNPstream® instruments and SNPware(TM) consumables that rapidly generate highly accurate, cost-effective SNP information. SNP-IT is usable in environments ranging from small-scale laboratories to large commercial facilities. The versatility of SNP-IT is enabling Orchid to partner with industry leaders to make SNP-IT-enabled products available on a wide variety of instrument platforms as part of Orchid's Platform Propagation(TM) strategy. Orchid also provides high throughput SNP scoring services to pharmaceutical, biotechnology, agricultural and academic customers through its MegaSNPatron(TM) facilities, and identity genomics testing for forensics and paternity, as well as clinical quality genotyping, through its GeneScreen and Cellmark units. Orchid also provides content-rich SNP databases and SNP panels to its customers and collaborators. Through its GeneShield and Pharmaceutical Value Creation business, Orchid seeks to identify and commercialize medical applications of SNPs. More information on Orchid and on the proposed acquisition of Lifecodes can be found at its web site orchid.com.
Orchid management will host a conference call at 10am ET on October 2, 2001. To participate in the conference call, please dial: USA: 800-354-6885 or Outside the USA: 415-537-1890 and ask for the Orchid Conference Call. To listen to the live or archived webcast via the Internet, go to the Investor Relations section of the company's website, orchid.com.<<
SNPed-IT!
Cheers, Tuck |
