Affymetrix expects the acquisition of eBioscience to create significant new commercial opportunities in the key post-genomic applications of immunology, oncology, cell biology, stem cell biology and diagnostics; diversify the company's revenues to complement its genomics franchise; augment the company's growing business in molecular diagnostics; expand the company's product portfolio to include multicolor flow cytometry reagents and a broad spectrum of reagents for the analysis of cytokines, growth factors and other soluble proteins; enhance the operational and new product opportunities for Panomics RNA and protein analysis products; and leverage the commercial capabilities of both companies to generate new opportunities for growth.  

 

"The acquisition of eBioscience is transformational for our business, and we are enthusiastic about the opportunities it creates," adds Witney. "With eBioscience, Affymetrix will significantly expand its addressable markets by adding an industry-leading portfolio of cell-based and immunoassays. These new products are a critical part of our customers' workflow in our key target markets of translational medicine, oncology, and immunology. We believe that these markets represent a nearly three-billion dollar annual opportunity, which will put Affymetrix on a solid path to sustained growth and profitability."  

 

Zacks Investment Research acknowledges that Affymetrix is pursuing a number of strategies, including expansion into new markets such as cytogenetics and cancer research, which are aimed at expanding its top line, adding in a note about the eBioscience acquisition that "the company is shifting its R&D focus from discovery and exploration markets to the faster-growing validation and routine testing markets. However, Affymetrix is operating in an intensely competitive industry and faces risks associated with lower R&D spending by its customers due to a soft economy and government actions including budget cuts."  

 

Because Affymetrix is exposed to a "volatile funding environment" and because declines in government research grants "may substantially affect the company's revenues," Zacks has maintained a "Neutral" stance on Affymetrix's stock.

 

The mood is notably more upbeat at Affymetrix, with Dr. Stephen P.A. Fodor, founder and chairman of the company, saying, "This transaction places Affymetrix at the forefront of immunology and oncology, two of the fastest-growing segments of molecular and translational medicine," adding that eBioscience "complements our traditional businesses of genomics and cytogenetics, and dramatically strengthens our foundation in molecular diagnostics."  

 

For his part, Don Tartre, CEO of eBioscience, asserts, "the combination of the Affymetrix presence in genomics, its global commercial footprint and our protein and cell analysis tools is a great match."

 

"The combination of Affymetrix and eBioscience has significant benefits," noted Tim Barabe, executive vice president and chief financial officer of Affymetrix, in the news release about the deal. "With 2011 sales expected to exceed $70 million, gross margins in excess of 70 percent and EBITDA margin of approximately 30 percent, eBioscience makes Affymetrix a much stronger company, both operationally and financially. The purchase price represents approximately 4.5 times 2011 revenue and 14 times 2011 EBITDA."  

 

The transaction will be funded using a combination of roughly 50 percent cash-on-hand and 50 percent committed debt to avoid dilution and maximize value to shareholders, Barabe added.  

 

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Affymetrix, Genisphere ink deal for miRNA reagent kit  

 

SANTA CLARA, Calif.—Affymetrix Inc. also announced last month an exclusive agreement with Genisphere LLC to offer the company's proprietary FlashTag Biotin HSR Reagents designed for Affymetrix.  

 

According to Affymetrix, the miRNA reagents provide streamlined, high-fidelity target preparation methods yielding high-quality data and unmatched reproducibility when used with the Affymetrix GeneChip Arrays.

 

"Launched in March 2009, the FlashTag product line has provided a powerful standardized tool for investigating miRNA expression when coupled with the GeneChip miRNA Arrays. This licensing agreement combines the technologies from both companies for the benefit of our mutual customers."

 

Genisphere reagents are compatible across a wide variety of sample types including formalin-fixed, paraffin-embedded (FFPE) fresh frozen samples and blood. This complete solution provides researchers with faster insight into the role of miRNAs in biological processes including mRNA degradation, transcriptional gene silencing, translational repression and ultimately in biomarker discovery in translational and cancer research, says Affymetrix.  

 

Starting with as little as 100 ng of total RNA, these reagents provide ultrasensitive miRNA labeling in just 45 minutes, with no purification steps required to go from sample to target for microarray hybridization. When used with the recently released GeneChip miRNA 2.0 Array, these tools provide customers with a single validated workflow to better understand the biology of miRNA molecules from 131 different organisms.  

 

"The new miRNA reagents designed specifically for Affymetrix GeneChip Arrays provide researchers with the best tools to access challenging samples and interrogate them on the world's leading microarray platforms," said Dr. Kevin Cannon, general manager of Affymetrix's Gene Expression business unit, in a statement. "This reagent addition provides researchers with the tools to move from a whole-genome view of complex biological systems using the GeneChip miRNA Arrays to single- gene validation with QuantiGene View miRNA Assays."

 

Affymetrix-branded reagent kits will be launched in early 2012.