Cincinnati, Ohio life sciences company Meridian Bioscience Inc. (NASDAQ: VIVO) has acquired the outstanding capital stock of Bioline Ltd., the London, England-based maker and distributor of molecular biology reagents, for $23.3 million in cash.
Meridian Bioscience also said Tuesday its profits fell 24 percent in the fiscal third quarter from a year ago, while sales fell 11 percent in the same period, because of continuing weakness in respiratory disease test sales caused by lack of a flu season and competition for sales of C. difficile tests.
The Cincinnati maker of diagnostic test kits that detect bugs like C. difficile and H. pylori, as well as tests for upper-respiratory infections and other pathogens, is hoping the Bioline acquisition and two other recent events will spark growth through innovation and product line and geographic expansion.
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Last week, Meridian Bioscience received the go-ahead from the Food and Drug Administration to sell its first molecular test — illumigene C. difficile. The company’s illumigene testing system detects the toxin produced by C. difficile DNA within an hour. Already launched in Europe, illumigene C. difficile uses an amplification technology that makes it easier and less expensive to use than some other molecular tests in the fast-growing market for rapid test kits.
“The first platform of C. difficile … is capable of producing somewhere in the range of $10 million to $20 million annually,” John A. Kraeutler, Meridian’s chief executive, said during a January interview. “The second generation of illumigene, which will probably start to go into clinical trials later this fiscal year, should be able to do even more than that.”
The week before that, the company struck an exclusive, world-wide product development and distribution agreement with Italian diagnostics company DiaSorin S.p.A. that is likely to open doors to new customers in Eastern Europe and Asia. Putting together the two companies could give both more share of a highly competitive, $300 million to $500 million market in Europe and Asia.
Both the Bioline acquisition and illumigene launch are expected to have immediate positive financial impacts, Meridian Bioscience said Tuesday.
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Bioline comprises Bioline Ltd. (London), Bioline GmbH (Luckenwalde, Germany), Bioline (Aust) Pty Ltd. (Alexandria, Australia), Bioline Reagents Ltd. (London), and Bioline USA Inc. (Taunton, Massachusetts). The company distributes its nucleotides, DNA polymerase enzymes and other reagents for molecular biology in 30 countries.
The acquisition will add technologies and capabilities to Meridian’s Life Science business and complement its expanding life science product lines sold in research, pharmaceutical and commercial diagnostic markets.
“Bioline will provide a rapidly expanding portfolio of highly specialized molecular biology reagents that enable the development of genomic tests utilized by researchers, clinical diagnostic laboratories, diagnostic test manufacturers and biotechnology companies,” said Richard L. Eberly, president of Meridian Life Science Inc., in a release. “Bioline will also add key global operations and direct sales capabilities in the U.K., Germany and Australia to complement Meridian’s strong U.S. capabilities.”
Also on Tuesday, Meridian reported net earnings of $6.4 million, or 16 cents a diluted share, in the fiscal quarter ended June 30. The recent quarter’s results include $673,000 in Bioline acquisition costs. That was down 24 percent from $8.5 million, or 58 cents a diluted share in the prior year’s third quarter. Sales fell 11 percent to $33.9 million from a year ago.
As for the nine months ended June 30, net earnings fell 11 percent to $21.3 million, or 52 cents per diluted share, and sales rose 2 percent to $107.5 million.
“Meridian Life Science recorded another quarter of growth and has achieved nearly a 10 percent improvement year-to-date,” CEO Kraeutler said in a release.”Fiscal 2010 has been challenging. We believe that the return to double-digit growth is within reach and that our focus on new product innovation, selected acquisitions and broader global capability will sustain those trends.”
Chairman William J. Motto expects growth trends to resume in fiscal 2011, which begins in October. “Our financial condition is sound, and our balance sheet continues to support our acquisition activity and our cash dividend policy,” Motto said in his company’s earnings release. “We are continuing to examine a number of potential acquisition candidates that could add to our business on an accretive earnings basis.”
Meridian shares were down 3 percent to $17.48 in noontime trading on the Nasdaq Stock Market.
