Microgenics Announces Management Buyout From Hoffman La-Roche; Leading Diagnostics Manufacturer Re-Emerges as Independent Company

Business Wire, Oct 28, 1998

PLEASANTON, Calif.--(BW HealthWire)--Oct. 28, 1998--Microgenics Corporation, a leading supplier of diagnostic reagents, announced today the acquisition of the CEDIA(R) immunoassay technology and product line from Hoffman La-Roche in a management-led buyout, with the financial support of Morgan Stanley Ventures.

Microgenics' strategy will be to make its drugs of abuse, therapeutic drug monitoring and thyroid test products more widely available through direct sales, distributors and OEM partnerships. Microgenics will also seek new, non-diagnostics applications for its CEDIA(R) technology.

"We are very pleased that Microgenics will once again have the opportunity to expand the potential of the CEDIA(R) products and technology beyond applications for the Hitachi instrument line," said Pyare Khanna, Ph.D., Microgenics president and chief executive officer. "We will aggressively develop applications for other open analyzer systems, and actively seek partnerships and OEM relationships with other diagnostic instrumentation companies."

Microgenics manufactures and markets 28 immunoassay products based on its genetically engineered, non-isotopic CEDIA(R) technology. The company will provide direct sales, service and support to its U.S. customers. Microgenics is establishing regional offices in Germany and Australia to directly serve its customers in key international markets and to better support its current and future OEM partners and distributors.

In addition to Yamanouchi Pharmaceuticals and Beckman as OEM partners, Roche Diagnostics Systems also becomes an OEM partner for the sale of certain CEDIA(R) products on its Hitachi clinical chemistry analyzers. As part of the acquisition, Microgenics also acquired the rights to co-exclusively distribute Hitachi analyzers to its CEDIA(R) customers on a worldwide basis.

Microgenics will extend its drugs of abuse test product line, launching innovative new products in 1998 for Methadone Metabolite and LSD confirmation testing, and will continue developing additional products for drugs of abuse and immunosuppressive drug monitoring. In addition, the company is exploring applications of the CEDIA(R) technology to high throughput screening for pharmaceutical drug discovery research.

Microgenics was founded in 1981 in Concord, Calif., and marketed its first diagnostic product based on its patented CEDIA(R) technology in 1986. In 1992, Boehringer Mannheim Corporation (BMC) purchased Microgenics. In 1998, the U.S. Federal Trade Commission required Roche to divest BMC's CEDIA(R) drugs of abuse test business as part of the commission's approval for Hoffman La-Roche to acquire BMC.

As a result, members of Microgenics' management were able to negotiate the worldwide buy-out of this technology and customer base for all applications. The CEDIA(R) business has grown from $8 million end user sales in 1992 to about $50 million in 1997.

In addition to Dr. Khanna as president and CEO, the Microgenics executive team includes Bob Wolf, vice president, marketing and sales; Bill Coty, Ph.D., vice president, research and development; and David Clayton, chief financial officer. The team brings extensive experience in the diagnostics and biotechnology fields. The board of directors includes Dr. Khanna, as well as Richard Bastiani, Ph.D., former president of Syva Company, and Scott Halsted, general partner of Morgan Stanley Venture Partners.

To support continued growth of its CEDIA(R) business, Microgenics will employ 140 to 150 people worldwide by the end of 1998. The company is headquartered in Pleasanton, Calif., where it occupies an 85,000 square foot facility containing full capacity for manufacturing, distribution, research and development, marketing and administrative functions.