Konica Minolta to acquire U.S.-based Ambry Genetics in a deal valued at US$1 billion.

Konica Minolta, Inc.and Ambry Genetics Corporationannounced the signing of a definitive agreement for a subsidiary of Konica Minolta to acquire Ambry. The transaction is partially funded by Innovation Network Corporation of Japan (INCJ).

A reported $800 million will be paid upon closure, and there will be an additional payment of up to $200 million based on certain financial metrics over the next two years, valuing the acquisition up to a total of $1 billion.

Founded in 1999, Ambry is a privately held healthcare company in the U.S., led by founder, president and chairman Charles L.M. Dunlop and CEO Dr. Aaron Elliott. Ambry has a comprehensive suite of genetic testing solutions for inherited and non-inherited diseases as well as for numerous clinical specialties, including oncology, cardiology, pulmonology, neurology, and general genetics.

They are recognizedin diagnostic solutions for hereditary conditions in the United States, by having performed more than one million genetic tests and identified more than 45,000 mutations in at least 500 different genes. Ambry isthe first laboratory in the world to offer such tests as hereditary cancer panels and clinical exome sequencing.

Konica Minolta views the addition of Ambry as the first stepping-stone to create a new medical platform aimed at fulfilling the potential of precision medicinean emerging approach to healthcare where genetic or molecular analysis is used to match patients with the most appropriate treatment for their specific disease.

Precision medicine aims to improve a patient'squality of life and save the healthcare system money by eliminating unnecessary and ineffective treatments. Konica Minolta plans to bring Ambrys capabilities first to Japan, and then to Europe.

This acquisition is the first in a series of strategic initiatives to secure a leading position for Konica Minolta in precision medicine,said Shoei Yamana, president and CEO of Konica Minolta. The future of medicine is patient-focused. Together with Ambry, we will have the most comprehensive set of diagnostic technologies for mapping an individuals genetic and biochemical makeup, as well as the capabilities to translate that knowledge into information the medical community can use to discover, prevent, and cost-effectively treat diseases. This will not only serve as the future foundation for our healthcare business, but will pave the way for a fundamental shift in the way medicine is practiced globally.

The acquisition of Ambry and the advancement of precision medicine marks a strategicshift for Konica Minoltas healthcare business. Leveraging its long historyin materials science, nanofabrication, optics, and imaging, Konica Minolta has developed a comprehensive range of technologies and services in the healthcare field spanning digital X-ray diagnostic imaging systems, diagnostic ultrasound systems, and ICT service platforms for medical institutions.

Ambrys genetic testing capabilities complement Konica Minoltas advanced imaging technology to create the most comprehensive range of healthcare diagnostics for use by pharmaceutical companies, healthcare providers, payers, and consumers.

In 2015, Konica Minolta pioneered advanced immunostaining technologyHigh-Sensitivity Tissue Testing (HSTT)1that uses fluorescent nanoparticles to detect and quantify the proteins that drive disease states and offers far greater precision and accuracy than conventional immunostaining techniques.

With initial applications in oncology, the proprietary technology can determine the exact cellular location and amount of specific proteins that manifest in cells, offering an early-stage, highly precise diagnosis and insights into a patients disease that can inform research and a clinician'streatment plan.

Were excited by this opportunity to combine both our companies technologies to unlock new opportunities for precision medicine, said Charles Dunlop, president and chairman of Ambry Genetics. As a part of Konica Minolta, we will have the resources, technology, and scale to advance biomedical research and enable the matching of more patients in more countries with specialized medicines that target the underlying cause of their illness.

Konica Minoltas HSTT technology will be further enhanced by Ambrys genetics-based screening techniques, which enable clinicians to analyze both tumor and normal tissue to diagnose hereditary cancer, while also providing guidance regarding drug eligibility and response.

Ambry recently launched a combined genetic test for both inherited and acquired mutations in DNA mismatch repair genes to indicate appropriate treatment options for cancer patients who may benefit from PD-1/PD-L1 immunotherapy. PD-1 and PD-L1 checkpoint inhibitors help the patient's immune system recognize attack and destroy PD-L1-positive cancer cells that would otherwise evade detection by the immune system.

The combination of these bioinformatics capabilities, alongside Konica Minoltas HSTT technology, will create new opportunities for drug discovery and clinical trials not currently available, said Kiyotaka Fujii, senior executive officer, president, global healthcare, Konica Minolta. Konica Minolta will look to accelerate innovations by drawing on the strengths of both companies. In addition to introducing Ambrys genetic-testing capabilities to the Japan market, we will look to develop new bio-imaging and proteomic services and solutions to benefit doctors, patients, and pharmaceutical companies.

Under the terms of the agreement, Konica Minolta via Konica Minolta Healthcare Americas, Inc., (MHUS), a wholly owned subsidiary of Konica Minolta, and INCJ, will make an upfront, all-cash payment of $800 million to Ambry. MHUS will invest 60 percent and INCJ will account for the remaining 40 percent. In addition, Ambry shareholders will receive up to $200 million in incremental consideration based on certain financial metrics over the next two years, valuing the acquisition up to a total of $1 billion.

The transaction is expected to close in the third quarter of fiscal year 2017, subject to customary regulatory approvals. Ambry would thereafter become a consolidated subsidiary of Konica Minolta, continuing to operate under the Ambry name and headquartered in Aliso Viejo, California.

GCA Corporation acted as financial advisor to Konica Minolta and Baker McKenzie acted as legal advisor for this transaction. Intrepid Investment Bankers acted as financial advisor to Ambry and Jones Day acted as legal advisor. _____________________________________________________

Reference:

1A portion of the research on HSTT was commissioned under a project by the New Energy and Industrial Technology Development Organization (NEDO), Japan.

(Source: Business Wire)

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Konica Minolta Aiming for Top Position in Precision Medicine, $1B Acquisition - Pharmaceutical Processing