Avacta Group, a clinical stage oncology drug company and developer of diagnostics based on its Affimer and pre|CISION platforms, has conditionally agreed to acquire Launch Diagnostics for an upfront cash consideration of £24 million with an earn-out based on future business performance capped at £13 million.
The acquisition is the first step in a M&A-led growth strategy by Avacta for its diagnostics division, with the vision of building an integrated and differentiated IVD business with global reach serving professionals and consumers.
The company believes that there is a significant commercial opportunity in the EU and the UK markets, which are fragmented, to build its position in the immunodiagnostics and molecular diagnostics value chain by acquiring companies that are complementary to Avacta’s core strengths in research and development.
Launch Diagnostics is an independent IVD distributor in the UK with over 30 years’ track record, with its headquarters in Kent and around 70 staff. It provides immunodiagnostic and molecular test products, technical support and maintenance to healthcare providers. Launch Diagnostics serves private and public sector customers throughout the UK, France, Belgium, Luxembourg and Republic of Ireland, with 95% repeat business.
Key management of Launch Diagnostics will remain in place with the exception of principal selling shareholder who will retire and will be replaced by a Managing Director from within the business. Avacta intends to run Launch Diagnostics as a separate business, retaining the brand and culture that has driven its success.
Dr Alastair Smith, Chief Executive Officer of Avacta, said: “This acquisition will add an established distribution channel to Avacta with three decades of customer relationships and deep market knowledge to drive future product development, strategy and growth. It is the landmark first step in our ambitious M&A-led growth strategy for Avacta’s diagnostics division that has been a year in the making.
“Our vision is to build an integrated, differentiated, global reach IVD business serving professionals and consumers, that uses the benefits of its Affimer platform to differentiate immunodiagnostic products in a competitive market. This is a transformational moment for Avacta Diagnostics, adding a well-established route to market for existing and future in-house and acquired products in the UK and across several key European markets.
“Avacta’s Therapeutics division continues to make good progress as expected in the clinical development of AVA6000, its first therapeutic product based on its proprietary pre|CISION technology as it progresses with the fourth cohort of patients in the phase 1 dose escalation study ALS-6000-101.”
John Twycross, Managing Director of Launch Diagnostics, said: “For over 30 years, the senior leadership team have built Launch Diagnostics to become one of the largest independent diagnostics distributors in the United Kingdom, providing pathology solutions encompassing high quality diagnostic reagents and instrumentation from world leading manufacturer’s to the health services of the United Kingdom, Belgium, Luxemburg, France and the Republic of Ireland.
“We are delighted that, as Launch Diagnostics becomes part of the diagnostics division of Avacta, there is a shared ambition to continue the growth of the group with a continuing focus on excellence and the ability to offer a wide range of trusted and efficient diagnostics solutions, both from existing and emerging technologies, to all our customers.”