Bio-Rad Eyes Digital PCR, Liquid Biopsy Growth with RainDance Acquisition

January 18, 2017
Bio-Rad Eyes Digital PCR, Liquid Biopsy Growth with RainDance Acquisition
Source: Getty Images

Bio-Rad Laboratories has signaled its growing interest in digital PCR and liquid biopsy with its plans announced this week to acquire RainDance Technologies for an undisclosed price.

“We look forward to expanding our offering to provide life science and clinical diagnostics customers with solutions for a wide range of nucleic acid detection applications,” Bio-Rad President and CEO Norman Schwartz said Monday in the company’s announcement of the acquisition on Monday. “The company's droplet-based solutions will extend our reach into next-generation sequencing applications and strengthen our position in the area of Droplet Digital™ PCR.”

Droplet Digital PCR (ddPCR) is based on water-oil emulsion droplet technology in which a sample is fractionated into 20,000 droplets, with PCR amplification of the template molecules occurring in each individual droplet.

Bio-Rad introduced the first commercially available ddPCR platform in 2011, the QX100 Droplet Digital PCR System, and followed up two years later with its latest-version QX200.

“This is a truly enabling technology and it can be applied in a lot of really interesting and exciting ways. I'd say, the leading application right now is in the liquid biopsy technology space,” Shannon Hall, a Bio-Rad executive vice president and president of the company’s Life Sciences Group, told analysts November 1, following the release of third-quarter results.

Liquid biopsy has been among areas of research that RainDance has focused on through the development of its droplet microfluidic technology. RainDance’s digital PCR tools include its RainDrop® system introduced in 2013, followed by its RainDrop Plus™ system launched in November.

RainDance and Bio-Rad are two of four digital PCR manufacturers; the others are Life Technologies and Fluidigm. While Bio-Rad has significant market share, “RainDance technology is definitely faster than BioRad and has the ability to partition droplets 500 times faster than BioRad systems,” Divyaa Ravishankar, senior industry analyst with Frost & Sullivan, told Clinical OMICs.

“[Bio-Rad] also gains access to some important accounts such as Myriad Genetics, which are high users of RainDance Technologies, and partnerships with Pacific Biosciences to co-develop assays,” Ravishankar added.

Myriad accounted for 29% of RainDance’s total revenue in 2013 (about $4.98 million) and 51% of total revenue in 2014 (about $15.58 million), according to the S-1 registration statement RainDance filed two years ago when it sought to go public. Myriad and GE Ventures have been among investors that have enabled RainDance to raise more than $100 million since its founding in 2004.

PacBio and RainDance launched a partnership in 2015 to co-develop and commercialize novel solutions for de novo whole genome assembly, by combining RainDance’s digital droplet technology and single-molecule barcoding capabilities with PacBio’s long-range DNA amplification technology.

Digital PCR is among top technologies used in liquid biopsy for detecting circulating tumor (ct) cells and ctDNA, along with NGS and quantitative PCR. Together the value of these and six other technologies totals about $2 billion with a CAGR of 15% for the next 4 years, Ravishankar said.

Headquartered in Billerica, MA, RainDance markets products for digital PCR, as well as for sample enrichment for NGS through its ThunderStorm® and ThunderBolts™ systems.

The RainDance deal is the first announced by Bio-Rad since the conference call, where Schwartz disclosed that the company was considering potential mergers-and-acquisitions (M&A).

“We've got a pretty good book of things that we're looking at, evaluating. And certainly, I'm really hoping that something will come to pass in the next three to six months,” Schwartz told analysts on the call.

RainDance appeared on track to go public when it filed its S-1 in March 2015 for a $60 million initial public offering. The company disclosed no specific plan for the proceeds, but did say it finished 2014 with a net loss of $8.849 million on total revenue of $30.551 million, an improvement over 2013’s $14.334 million net loss on $17.174 million in revenues.

RainDance also disclosed that its customer base included 10 of the top 30 U.S. cancer research centers, including Mayo Clinic, MD Anderson Cancer Center, Memorial Sloan Kettering Cancer Center, Moffitt Cancer Center, and National Cancer Institute—as well as overseas customers such as Ontario Institute for Cancer Research, and Université Paris Descartes.

RainDance withdrew its planned IPO in August 2015, blaming market conditions just as investor appetite for biotech stocks began to sour. Six months later, RainDance disclosed in a published report that it had begun a roughly 10% reduction in its workforce, shrinking from 115 to about 110 employees.

A RainDance spokeswoman referred questions to Bio-Rad, which won’t discuss the deal until its upcoming fourth-quarter and full-year 2016 financial results conference call. The call will be scheduled shortly, a Bio-Rad spokeswoman told Clinical OMICs.

Bio-Rad said it expects the RainDance acquisition to close during the first quarter of this year.

“For now, it will be business as usual for customers and distributor partners,” RainDance CEO Kathy Ordoñez said in a letter to customers posted Monday on her company’s website.

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