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Short-hairpin, long view
HUNTSVILLE, Ala.—With an eye toward preserving, if not strengthening, the open access principles that have guided Open Biosystems since its founding in 2001, Thermo Fisher Scientific announced in early July its purchase of the company, best known for its short-hairpin RNA (shRNA) and antibody libraries and tools aimed at the genomic research market.
Troy Moore, a founder and former CSO of Open Bio and now director of virology with Thermo Fisher, says aligning with Thermo Fisher will allow the company to take the next step forward to reaching a broader market for its products and services.
"From day one this was the most likely path that we would take," Moore says. "This is a common path for many companies that need more money. We continued to plow the money back into R&D and we could have made the decision to pace ourselves and [make it] a 10- or 15-year kind of endeavor. Or we can do what we did and find a partner who can get us there faster."
With Thermo Fisher, Open Bio has surely aligned itself with the biggest dog in the fight, but that was not a leading factor in deciding to sell to the company, which was among many suitors for Open Biosystems.
"The number one concern for us was that a company embraces our open source biology model," Moore adds. "Of all the groups we talked to about this, Thermo Fisher clearly showed us that is was more than just talk and they saw us as a strategic fit."
One strong argument in Thermo Fisher's favor to show it was serious about Open Biosystems' model, was the similarity between Open Bio's Open Access program and Thermo Fisher's Global RNAi Initiative—efforts in which each company has set up formal programs for the open sharing of research results among scientists in research institutes and academia.
"We work with academia and non-profits that are doing whole-genome screening to establish a community among the leading screening institutes," says Mike Deines, global director of marketing for the genomics unit of Thermo Fisher. "We have built a community of more than 30 members, with the mission to collectively advance the state of the technology and research."
With each company running a similar program in different, though adjacent areas, Deines says, there is ample opportunity for the companies to learn from the strengths of each other's programs. Further, with the resources at hand with Thermo Fisher, there is the opportunity to strengthen the Open Access program by bringing group members to a single location, as opposed to the quarterly conference calls Open Bio currently conducts for the program.
In addition, Deines sees synergies between the work Open Biosystems is doing to develop new products and ongoing work being conducted internally for the Thermo Fisher's Colorado operation, which Thermo acquired via its acquisition of RNAi and oligo specialist Dharmacon in 2004.
Deines, who came to Thermo Fisher through the Dharmacon acquisition, states, "The team here can very much relate to the size and stage that Open Biosystems is now and that we can help them adapt to the integration and focus on their technology."
With its new parent company's vast resources and also recently free of ongoing litigation with Sigma-Aldrich, which Moore admitted put a strain on the company, it appears Open Biosystems and its products are poised to make an ever-greater impact on the market.
Moore is quick to point out, however, that the decision to sell was not based on any financial hardship brought about by the legal battle.
"We weathered that quite well, but we got to a point where we wanted to grow more rapidly," Moore says. "As important as our open source philosophy is, this wasn't ever meant to be a 'lifestyle' business. Our aim was to bring our technology to as many people as we could and be profitable."
The final purchase price for Open Biosystems, which reported revenue of $14 million in 2007, was not disclosed by either party. Though using a broad range of multiples for similar tools and reagents companies sold in the past couple of years, the final price likely fell in the $35 million $70 million range. DDN