Cancer Genetics Acquires BioServe India

Cancer Genetics Acquires BioServe India

Cancer Genetics said today it acquired Indian-based BioServe Biotechnologies for about $1.9 million, primarily in stock and other deferred payments, in a deal designed to help the buyer scale up its genetic analysis, bioinformatics, and manufacturing operations while capitalizing on clinical diagnostics and trial growth in India and the Asian market over recent years.

    BioServe India will become a wholly owned Cancer Genetics subsidiary to be renamed Cancer Genetics India (CGI).

    CGI said it plans on retaining all 26 current employees of BioServe India, while further expanding and strengthening its sales and clinical teams in India, which are based at a 14,000-square-foot genomics facility in Hyderabad.

    In acquiring BioServe India, CGI said, it is looking to offer oncology-focused next-generation sequencing and CGI’s proprietary cancer portfolio as strategic drivers of growth in India. The acquiring company is also looking to help clients with clinical trials in India or Asia, since the market has experienced a combined annual growth rate of 30% to 40% percent over recent years.

    CGI added it plans to gain Clinical Laboratory Improvement Amendments of 1988 (CLIA) certification for BioServe India’s Hyderabad based lab “in the coming quarters.”

    “With this acquisition, CGI is now better positioned to increase our global presence in personalized cancer care and further improve outcomes and lower costs for cancer patients,” Cancer Genetics CEO Panna Sharma said in a statement. “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.”

    Sharma said CGI’s acquisition of BioServe India would not affect company earnings per share this year, while adding revenue in 2015: “It has the potential to accelerate our next generation sequencing development, improve our gross profit margins, and diversify our revenue growth outside the U.S.”

    CGI announced the acquisition on the day it also released its first-quarter financial results. The company cut its net loss by 20% or $500,000, to $2.4 million, on revenue that rose 17%, to $1.4 million. Total first quarter test volume increased 45%, to 2,772 tests, CGI said.

    BioServe India is a molecular kit manufacturer and provider of genomics services that include next-generation sequencing genotyping and DNA synthesis—services designed to help researchers identify genetic markers, validate drug targets and correlate clinical and molecular data to accelerate the development of new and effective drugs.

    The company said its nearly 200 clients include Dr. Reddy’s Laboratory, the Indian Institute of Science Education & Research, and the Centre for Cellular and Molecular Biology.

    BioServe India has also positioned itself to improve oncology diagnostics care and management throughout India by growing its clinical diagnostics capabilities in oncology and next-generation sequencing.

    The new subsidiary will integrate CGI’s DNA probe manufacturing and proprietary FHACT™ test into the Indian market, which accounts for more than 25% of global deaths attributed to cervical cancer.

    FHACT is a noninvasive genomic test that can work as a reflex test from a Pap smear and can identify cancer and precancer lesions caused by persistent human papillomavirus (HPV) infection. The test is designed to assist physicians by furnishing key information for making treatment decisions in cervical and HPV-related cancers.

    BioServe India has the financial backing of VenturEast, a healthcare-focused venture capital fund manager based in India with close to $300 million under management.