SOURCE WaferGen Bio-systems, Inc.
Acquisition propels the Company to being a major player in the NGS sample prep market
FREMONT, Calif., Jan. 7, 2014 /PRNewswire/ -- WaferGen Bio-systems, Inc. (QTCQB: WGBS) announced today the acquisition of the NGS library preparation business from IntegenX Inc. Pursuant to the asset purchase agreement, WaferGen Bio-systems, Inc., through Wafergen, Inc., its wholly owned subsidiary, acquired on January 6, 2014 substantially all of the assets of IntegenX's product line used in connection with developing, manufacturing, marketing and selling instruments and reagents relating to library preparation for NGS, including the Apollo 324TM instrument and PrepX® reagents. The purchase price for the acquired business was composed of (1) an up-front cash payment of $2.0 million, (2) a $1.25 million secured promissory note due on January 6, 2017 (repayable early in certain circumstances), (3) up to three earn-out payments payable based on certain revenue thresholds in 2014, 2015 and 2016, respectively, and (4) Wafergen, Inc.'s assumption of certain liabilities related to the acquired business. Additional information on the transaction can be found in WaferGen's Report on Form 8-K filed with the SEC on January 6, 2014.
"We are very excited about adding IntegenX's NGS library prep business to our product portfolio. It is highly synergistic with our existing products, especially our NGS target enrichment SmartChip TETM offering," stated Ivan Trifunovich, President and CEO of WaferGen Bio-systems. "Serving the same customer base, the two products together address a wide spectrum of customer needs in sample preparation for NGS and enable one-stop shopping for laboratories performing targeted sequencing. The fully automated Apollo 324TM library prep solution has been a market leader in the low to medium throughput NGS market segment with an expanding installed base, serving a diverse set of clients from university research labs, pharmaceutical and agricultural companies, to diagnostic CLIA labs. It has generated uniformly positive customer feedback for its superior reliability, turnaround and hands-on time, as well as sample quantity input requirement. We intend to build upon its success with innovative new applications for this system, as well as with integrated products that include the SmartChip TETM platform."
Concurrent with the acquisition of the IntegenX assets, and following the Company's September 2013 fundraise, WaferGen is making additional changes to its Board of Directors, reducing its size from 9 to 7 and adding significant directly-relevant domain knowledge and management experience. Effective upon the closing of the transaction, Robert Schueren, CEO of IntegenX, joined WaferGen's Board of Directors. Mr. Schueren commented, "I am very pleased with the sale of our NGS library prep business to WaferGen, as the product will find a great home for future growth. IntegenX will continue to focus on its RapidHITTM human DNA identification business, which serves a very different customer base from the Apollo 324TM product line. I am confident that Apollo's full potential will be achieved under WaferGen's leadership, as the Company's focus is squarely on the rapidly expanding NGS market. I am excited about joining WaferGen's Board and I am looking forward to contributing to the Company's future success." Robert Schueren has held leadership positions in life science and diagnostic companies for more than two decades. Since April 2013, Mr. Schueren has been the Chief Executive Officer of IntegenX and a member of its Board of Directors. Previously he was Vice President and General Manager, Genomics for Agilent Technologies, where he oversaw a several hundred million dollar product portfolio, including the creation and successful commercialization of SureSelectTM. Prior to joining Agilent in 2010, he was the Global Head of Clinical Biomarkers and Operations, and Deputy Global Head of Molecular Medicine Labs for Genentech, Inc., a company he joined in 2006.
In addition, the Board appointed William McKenzie as a director, effective December 30, 2013. William McKenzie has over 25 years of experience building new businesses in the global life sciences and diagnostics sectors. Most recently, Mr. McKenzie served as Vice President and General Manager of Molecular Diagnostics at PerkinElmer, Inc. from June, 2010 until December 2012. Previously he served in various other senior roles at PerkinElmer after joining the company in 2005, including serving as Business Development Director then Strategic Marketing Director of Molecular Medicine, and then as Global Business Director of Genetic Screening. Prior to PerkinElmer, Mr. McKenzie worked for more than 12 years in positions of increasing responsibility at Millipore.
At the same time, Scott Davidson and Joseph Pesce, representatives of Great Point Partners, stepped down from the Board, effective December 30th, in order to focus their energies on the firm's other portfolio companies. In addition, on December 30th, Robert Coradini departed the Board, following his recent appointment to the role of Chairman at MELA Sciences, as did Dr. Timothy Triche, who desires to devote more time to his research and other commercial interests.
Alnoor Shivji, Chairman of WaferGen, said, "I am delighted to have business leaders of Bill McKenzie's and Bob Schueren's caliber join our Board. Their highly relevant life science tools and molecular diagnostic experience will be tremendously helpful in our efforts to build WaferGen into a leader in the NGS field. The entire Board is looking forward to working with Bill and Bob on broadening our strategic thinking and exploring the best opportunities for growth. I also want to thank Bob Coradini, Scott Davidson, Joe Pesce and Tim Triche for their outstanding contributions as directors of WaferGen, especially during the transition period when we were realigning and re-energizing the Company. I wish them great success in their future professional endeavors."
About WaferGen Bio-systems, Inc.
WaferGen markets SmartChip TE (Target Enrichment for Next-Generation Sequencing (NGS)) and SmartChip MyDesign (high-throughput quantitative PCR) products. SmartChip TE addresses CLIA-certified and clinical research laboratories' significant unmet needs in sequencing-based testing by providing uniform coverage of targeted genes, yielding better test specificity and sensitivity. The superior performance of this new product is based on WaferGen's proprietary technology that relies on massively parallel singleplex PCR reactions, where amplification is cleaner and better controlled, thereby providing more accurate diagnostic test results in the downstream sequencing step. On the qPCR side, the SmartChip MyDesign System has a powerful value proposition of content design flexibility, cost-effectiveness, and no need for pre-amplification.
About IntegenX's NGS Library Prep Business
The Apollo 324™ System is a compact, walk-away automation platform offering DNA, RNA-Seq, and ChIP-Seq library preparation kits for analysis on popular NGS platforms from Illumina® (GA, HiSeq™ and MiSeq™), Life Technologies (Ion Proton™ and Ion Torrent PGM™), and Roche (GS Junior™, GS FLX™ and GS FLX+). The intuitive and easy-to-use PrepX® automation protocols and reagent kits enable the set-up of a run with as little as 15 minutes of hands-on time. The user can return in about 90 minutes for sequencer-ready DNA or ChIP-Seq libraries, or about 5 hours for RNA-seq libraries. The system offers the flexibility to start a run with a single library without wasting reagents.
Forward Looking Statements
Certain statements made in this press release contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended that are intended to be covered by the "safe harbor" created by those sections. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of forward-looking terms such as "believe," "expect," "may," "will," "should," "could," "seek," "intend," "plan," "estimate," "anticipate" or other comparable terms. Forward-looking statements in this press release may address the following subjects among others: statements regarding the acquisition of the library preparation for Next-Generation Sequencing (NGS) business from IntegenX Inc. including possible synergies and other results of such acquisition, sufficiency of our capital resources, expected operating losses, expected revenues, expected expenses and our expectations concerning our business strategy. Forward-looking statements involve inherent risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements, as a result of various factors including those risks and uncertainties described in the Risk Factors and in Management's Discussion and Analysis of Financial Condition and Results of Operations sections of our most recently filed Annual Report on Form 10-K and our subsequently filed Quarterly Reports on Form 10-Q. We urge you to consider those risks and uncertainties in evaluating our forward-looking statements. We caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Except as otherwise required by the federal securities laws, we disclaim any obligation or undertaking to publicly release any updates or revisions to any forward-looking statement contained herein (or elsewhere) to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
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