BioFX Laboratories

Dec 17, 2019

Breadth of Offerings for the In Vitro Diagnostics Industry EDEN PRAIRIE, Minn.--(BUSINESS WIRE)--Aug. 13, 2007--SurModics,Inc. (Nasdaq: SRDX), a leading provider of surface modification anddrug delivery technologies to the healthcare industry, announced todaythat it has acquired BioFX Laboratories, Inc., a provider ofsubstrates to the in vitro diagnostics industry, for $11.3 million incash at closing and up to an additional $11.4 million in cash upon thesuccessful achievement of specified revenue targets. BioFX Laboratories is a leading manufacturer of substrates, acritical component of diagnostic test kits used to detect and signalthat a certain reaction has taken place. BioFX offers bothcolorimetric and chemiluminescent substrates, as well as otherproducts for use in in vitro diagnostic tests. BioFX's product lineand customer base complement SurModics' other product offerings forcustomers developing diagnostic test kits. The worldwide market for invitro diagnostic tests is estimated to exceed $20 billion. "The acquisition of BioFX Laboratories allows us to broaden ourproduct and technology offerings in the important and growing in vitrodiagnostics market," said Bruce Barclay, President and CEO ofSurModics. "We believe that the addition of BioFX's high qualityproduct line and technical expertise will solidify our position as aleading supplier of components to this market. We have a large andexpanding customer base in this market, and the addition in the pastyear of recombinant autoimmune antigens to our already successful lineof stabilization products has been well received. We believe theaddition of BioFX's products will be similarly well received. Inaddition, the opportunity to sell our existing products to BioFX'scurrent customers offers significant growth potential. By combiningthe BioFX products with our own, we can offer more high value criticalcomponents to a broader customer base in the in vitro diagnosticsmarket." Anticipated Acquisition Benefits -- Drives multiple elements of SurModics' seven point strategic growth plan, including "climbing the value chain" and revenue diversification -- Broadens SurModics' product portfolio in the in vitro diagnostics market -- Creates cross selling opportunities for each company's products by way of complementary customer bases -- Acquisition expected to be accretive to SurModics fiscal 2008 earnings "Our In Vitro Technologies business unit allows us to participatein the healthcare industry without some of the regulatory and otherrequirements present in our other business units. Currentlyconstituting approximately 30% of SurModics' total revenue, our InVitro Technologies business unit is performing exceptionally well, asevidenced by its 35% growth in year-to-date revenue," added Barclay. "The additional investment in our In Vitro business signifies both itsimportance to SurModics and our confidence in the potential benefitsof this market to our future." "BioFX has a well deserved reputation for providing highperformance, high quality substrates to the in vitro diagnosticsmarket," said Doug Astry, General Manager of SurModics' In VitroTechnologies business unit. "BioFX is particularly strong incolorimetric substrates, where it continues to displace competitivetechnologies. In addition, BioFX has a growing presence inchemiluminescent substrates, which is a larger segment of the market.We have been very impressed by the team at BioFX and look forward toworking together to grow our combined business." "We are very excited to join forces with SurModics," said CharlesW. Hewitt, Ph.D., CEO of BioFX Laboratories. "We believe our productofferings and customers are highly complementary. The ability to offercustomers a more complete solution to their product development needspresents a compelling opportunity for the combined organizations." Based in Owings Mills, Maryland, BioFX will operate within the InVitro Technologies business unit of SurModics. Dr. Hewitt will leadthe team in Maryland. The In Vitro Technologies business unit willremain headquartered in Minnesota. Financials SurModics paid $11.3 million in cash at closing and may pay up toan additional $11.4 million in cash upon the successful achievement ofspecified revenue targets. BioFX generated sales of $3.5 million incalendar year 2006, having achieved 16% growth compared with calendaryear 2005 sales. The company is profitable and cash flow positive. Theacquisition is expected to be accretive to SurModics' fiscal 2008earnings and beyond. About SurModics, Inc. SurModics, Inc. is a leading provider of surface modification anddrug delivery technologies to the healthcare industry. SurModicspartners with the world's foremost medical device, pharmaceutical andlife science companies to develop and commercialize innovativeproducts that result in better patient outcomes. Core offeringsinclude: drug delivery technologies (coatings, microparticles, andimplants); surface modification coating technologies that impartlubricity, prohealing, and biocompatibility capabilities; andcomponents for in vitro diagnostic test kits and specialized surfacesfor cell culture and microarrays. Collaborative efforts include asustained drug delivery system in human trials for treatment ofretinal disease and the drug delivery polymer matrix on thefirst-to-market drug-eluting coronary stent. SurModics isheadquartered in Eden Prairie, Minnesota and its BrookwoodPharmaceuticals subsidiary is located in Birmingham, Alabama. For moreinformation about the company, visit www.surmodics.com. The content ofSurModics' web site is not part of this release or part of any filingsthe company makes with the SEC. Safe Harbor for Forward Looking Statements This announcement contains forward looking statements. Statementsthat are not historical or current facts, including statements aboutbeliefs and expectations, are forward looking statements. Theseforward looking statements cover, among other things, the futureprospects of SurModics. Forward looking statements involve inherentrisks and uncertainties, and important factors could cause actualresults to differ materially from those anticipated, including thefollowing: (1) costs or difficulties relating to the integration ofthe BioFX Laboratories and SurModics businesses may be greater thanexpected and may adversely affect our results of operations andfinancial condition, and whether the acquisition is accretive tofiscal 2008 earnings; (2) the expected benefits of the transaction,including revenue growth, increased profitability and shareholderreturns, may take longer than anticipated to achieve or may not beachieved in their entirety or at all; (3) the expected benefit ofhaving complementary product offerings and complementary customerbases will depend in part on customer acceptance of the productofferings of the combined In Vitro Technologies business unit; (4)developments in the regulatory environment, as well as market andeconomic conditions, may adversely affect the business andprofitability of SurModics; and (5) other factors identified under"Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-Kfor the fiscal year ended September 30, 2006, and updated in oursubsequent reports filed with the SEC. These reports are available inthe Investors section of our web site at www.surmodics.com and at theSEC web site at www.sec.gov. Forward looking statements speak only asof the date they are made, and we undertake no obligation to updatethem in light of new information or future events. CONTACT: SurModics, Inc.