The award commends Exiqon for a well-executed market entry strategy, continued focus on innovation, key partnerships with industry and Cancer Research Centers, and market-driven product development approach – all of which position the company as a formidable force in its industry.
Exiqon's core competencies are in gene expression analysis, microRNA detection, and microRNA profiling through its miRCURY LNA™ detection platforms, and strong intellectual property in the microRNA domain. These products and services have helped establish Exiqon as one of the leading participants in the microRNA space.
"Exiqon strategically entered the U.S. cancer molecular diagnostics and allied pharmaceutical services market through its $45 million acquisition of privately-held Oncotech," notes Frost & Sullivan Senior Analyst Dr. Sudeep Basu. "The February 2008 all-share deal also strengthens Exiqon's position in the overall U.S. life sciences research and clinical diagnostics markets."
Exiqon's acquisition of Oncotech was both well-timed and well-executed as it came on the heels of the company's May 2007 IPO – one that closed more than seven-times oversubscribed. With sufficient available capital, Exiqon chose the path of downstream integration in to the cancer molecular diagnostics market by acquiring Oncotech. The salient features of the deal include minimal overlap in the businesses and good synergies between the companies' core competencies. These features, together with Exiqon's excellent executive leadership, have ensured the smooth integration of Oncotech.
Through the deal, Exiqon gains access to Oncotech's well-established network of hospitals and physicians. This large customer base, together with a well trained and targeted sales force, is an invaluable asset for Exiqon. A significant transfer of "know how" from Oncotech related to negotiating the U.S. regulatory and reimbursement space is also a vital gain for Exiqon.
From a strategic decision-making standpoint, Exiqon has made the right choices. Given the difference in their businesses, Exiqon targets research organizations and companies whereas Oncotech targets hospitals and physicians by way of its sales force. Hence, it was important that the sales forces not be combined. Exiqon's decision of maintaining dedicated sales teams for its diversified business portfolios will go a long way to ensure customer loyalty and boost sales for the two business segments.
Analysis of the other deal parameters also supports the strategic move. The time taken for completion of the acquisition was 92 days, which is very close to the industry average and hence indicative of minimal hurdles. Exiqon has unequivocally shown that it is growth driven and not cost-cutting driven. The revenue growth three months post-acquisition is strongly indicative of the successful acquisition strategy. Exiqon will use the Oncotech brand name to market its microRNA-based cancer molecular diagnostic tests globally and the first such test is slated for release later this year.
"Pharmaceutical companies now have a rapidly growing interest in biomarker development and companion diagnostics," continues Dr. Basu. "Exiqon's proficiency in high throughput screening (HTS), together with a Bio-Bank of 150,000 tumor tissue samples at Oncotech, positions Exiqon as a partner-of-choice for pharmaceutical companies."
Exiqon is thus a very well-deserved recipient of the Frost & Sullivan 2008 North American Growth Strategy Leadership Award in the U.S. cancer molecular diagnostics market. Each year, Frost & Sullivan presents this Award to the company that has demonstrated an exceptional long-term growth strategy within its industry.
Frost & Sullivan Best Practices Awards recognize companies in a variety of regional and global markets for demonstrating outstanding achievement and superior performance in areas such as leadership, technological innovation, customer service, and strategic product development. Industry analysts compare market participants and measure performance through in-depth interviews, analysis, and extensive secondary research in order to identify best practices in the industry.
Exiqon combines leading-edge scientific expertise in gene expression with proprietary LNA™ technology. The company's products, services and scientific staff enable life science researchers to make groundbreaking discoveries. Moreover, the company addresses the unmet need for a new approach to the diagnosis of cancer. Exiqon markets its products directly on exiqon.com, or through distributors, and partners its proprietary Locked Nucleic Acids (LNA™) technologies through industry leaders. Exiqon is located in the Medicon Valley area of Copenhagen, Denmark and is listed on the NASDAQ OMX in Copenhagen.
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