July 25, 2002 — Amersham plc, a London-based supplier of biotech research and medical diagnostic products, bought Motorola’s CodeLink Bioarray System business today for $20 million.
The acquisition allows Amersham to expand its microarray product line from “self-spotting” arrays that allow customers to create slides for analyzing genes to pretreated biochips that can test thousands of strands of DNA at a time.
Researchers use microarrays to study healthy and flawed genes to better understand genetic diseases. That, in turn, allows them to design and test therapeutic drugs. Motorola’s life sciences division began developing CodeLink in 1998 and was marketing it primarily to academic research labs and pharmaceutical research and development companies.
William Castell, Amersham’s chief executive, said CodeLink will allow Amersham to grow its customer base by offering pre-arrayed slides. Amersham, with sales offices in about 50 countries, posted a net income of about $113 million in 2001. The company already has 10 percent of the $500 million microarray market, Castell said, and with CodeLink he projected that its share eventually will reach 20 percent to 25 percent.
CodeLink’s upfront equipment costs — less than $100,000 — and its sensitive detection capabilities will make it competitive with rivals such as Affymetrix Inc. and Agilent Technologies, Castell said. “High quality and low cost will get us into the market and leverage the relationships we already have,” Castell said.
The CodeLink platform also holds potential in clinical diagnostics. Designers of medical diagnostic devices say biochips’ size, response time and specificity are suitable for future clinical testing of diseases or genetic conditions.
“People are using arrays as research tools into diagnostics,” Castell said. “In five years we will see significant use of arrays in appropriate settings.”
Amersham will retain 80 of Motorola’s 214 CodeLink staff and keep the operation in Tempe, Ariz., where Motorola maintains its research laboratories. Most of the 80 retained employees work as researchers, but a few key sales representatives also will remain on staff, Castell said.
The sale is part of Motorola’s continuing effort to reduce costs. The Schaumburg, Ill.-based corporation announced in 2000 plans to reduce its costs by more than 20 percent by trimming its roughly 150,000 workforce and closing and consolidating facilities. It now has less than 100,000 employees.
Motorola’s life science group includes one other small tech operation that is making a diagnostic biochip called the eSensor. The eSensor is incorporated into a disposable cartridge that then fits into an electronic reader for rapid analysis. Motorola is studying business models and financing options for eSensor, which unlike CodeLink is still under development.
“CodeLink was an established business, with customers and a product,” said Motorola spokeswoman Anne Steussy. “eSensor is not at that stage.”