BioFire Lake City, Utah, US. It is specialized

BioFire Diagnostics, created in 1990 and formerly known
as Idaho Technology, is a private biotechnologies company which has its
headquarter in Salt Lake City, Utah, US. It is specialized in Molecular
Diagnostic (MDx). It offers easy-to-use clinical molecular diagnostic solution
for infectious diseases and biosurveillance industries. In 1990, it was the
first to offer a thermal cycler: “No one was selling a thermal cycler, so I
decided to build one… And it had to be fast!” said Carl Wittwer, co-founder
of Idaho Technology. Then, it developed several real-time PCR (polymerase chain
reaction) instruments.

BioFire
Diagnostics’ mission: “BioFire simplifies our customers’ lives by innovating
easy-to-use clinical molecular diagnostic solutions that provide fast and
accurate results. Our mission is simple and important: to help make the world a
healthier place.”1. For this, BioFire offers now a syndromic approach by
proposing a broad panel of potential pathogens responsible of many infections
present with similar symptoms and signs. It even allows to diagnose
underdiagnose diseases or co-infections.

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In
2012, Idaho Technologies changed its name to BioFire Diagnostics, Inc., in
order to reflect more its activities and a larger focus on molecular diagnostic1.

After
the acquisition by bioMérieux in 2014, BioFire Diagnostics splits into two
companies : BioFire Diagnostics and BioFire Defense. The first one is dedicated
to molecular diagnostics and manages the FilmArray system. The second one is
the center that delivers instruments and reagents for the detection and the
identification of  specific biological agent.The FilmArray is the most popular instrument of
BioFire constructed by them. It is a real-time PCR machine, that allows now the
diagnostic of four panels of infectious diseases (Respiratory Panel – RP,
Gastrointestinal Panel – GI, Meningitis Encephalitis Panel – ME, Blood Culture
Identification – BCID), with a syndromic approach. It is a fast and an accurate
instrument as it showed in the table below.Each
panel received its FDA Clearance, making available all the US market, and CE
mark, allowing the commercialization as a clinical diagnostic tool in Europe. The
FDA Clearance of the RP (2011), BCID (2013) and GI (2014) panels were received
before the acquisition by bioMérieux. However, the FDA Clearance of the ME
panel was obtained in 2015, after the acquisition.In this
period, BioFire was loss-making but still wanted to grow. For this, it needed
new funds. In order to realize its wish, it had two mains possibilities 2:

–       
Doing an IPO

–       
To be purchase by another company

It
chose the second one. Among the twenty proposals that it received, bioMérieux’s
offer was chosen by BioFire because it was the most important.

 

Regarding the global IVD market segmented by
technologies that includes six big categories (clinical chemistry,
immunochemistry/immunoassay, hematology, coagulation & hemostasis, clinical
microbiology, molecular diagnostics) and a last one (others) 3, the molecular
diagnostics (MDx) segment is the fastest growing market for IVD with an
estimated CAGR of 9.1% from 2016 and 2021. BioMérieux saw that and knew that it
was totally in late in this area. Consequently it wanted to catch up by rapidly
establishing it on this market, no matter the price that it could cost. For
this, the acquisition of a specialized company was the best option.  

Besides,
becoming an important player in the molecular biology market, bioMérieux aspired
to reinforce its brand name and its establishment in the US market, and though
that acquiring an US company could be helpful for this.   Consequently, by its location and by obtaining
FDA clearance for some panels years before the acquisition, BioFire was very
attractive for bioMérieux.

Finally,
the current strategy of bioMérieux is based on three pillars: innovation, merge
& acquisition and expansion 4. Consequently, purchasing BioFire was
directly in line with this. Moreover, both companies have strong synergic
strategies in terms of business, which could facilitate the harmony.The September 3rd 2013, bioMérieux
announced that it had signed a deal with BioFire for the acquisition of the
last one for a total amount of $485 million. The transaction’s amount was $450
million and bioMérieux got commit to reimburse BioFire’s debts which amounted
to $35 million. Additional fees were linked to acquisition costs. The acquisition
was totally finalized in January 16th 2014, and consequently enters
in the consolidated balance sheet of bioMérieux from this date and is funding
through long-term debt 5. 

For
this acquisition, bioMérieux wanted to change its way to manage acquisition, in
order to maximize the chance of success, that’s why, bioMérieux deliberately decided
to not include BioFire in its complex processes. It wanted to let BioFire free
in an operational way, meaning that it still manage the supply and
manufacturing that stay in Salt Lake City, US, 
and in a certain way, it could continue to run its business 6. Unless
this strategy that could appear as a win-win situation, we can think that
things are not looking so good. 

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