The story has been updated to include the financial terms of the deal, which were disclosed in a US Securities and Exchange filing on Friday.
NEW YORK – In a move to build out its digital PCR portfolio, Bio-Rad Laboratories is acquiring French dPCR firm Stilla Technologies.
Terms of the binding offer call for Hercules, California-based Bio-Rad to purchase all equity interests in Stilla for approximately $225 million in cash, as well as potential future milestone payments of up to $50 million, the company disclosed in a Friday regulatory filing. The acquisition is expected to be completed by the end of the third quarter.
Separately, Bio-Rad said its fourth quarter revenues were down 2 percent year over year.
With the acquisition Bio-Rad picks up Stilla's revenue-generating Nio+ system, a mid-range priced instrument that will contribute to Bio-Rad's bottom line by 2026.
"Stilla's platform would enhance our product strategy in applied research and clinical diagnostics while allowing us to expand our offerings in digital PCR," said Jon DiVincenzo, Bio-Rad's chief operating officer, on a call with investors to discuss the acquisition and Bio-Rad's fourth quarter and full-year financial results.
Stilla, which is based in the Paris suburbs and has US offices in Boston, launched its seven-channel all-in-one Nio+ system in November 2023, highlighting its ease of use and ability to multiplex up to 21 targets and process up to 48 of the firm's 16-well Ruby consumable chips per day. The company also markets genetic and molecular diagnostic tests in cell and gene therapy, as well as assays for transplant testing and infectious diseases, and food and environmental testing.
"We are thrilled with the prospect of joining Bio-Rad, a leader in the field of digital PCR," Stilla CEO Rémi Dangla said in a statement. "With Stilla's passion for product development and Bio-Rad's extensive life science expertise, operational excellence, and global reach, together we can bring substantial value to the work of applied research and biopharma customers around the globe," he added.
Bio-Rad CEO Norman Schwartz said on the call that Stilla's dPCR solutions would be complementary to Bio-Rad's QX Droplet Digital PCR (ddPCR) and QX Continuum franchises and increase its reach in the increasingly competitive digital PCR space.
"We continue to invest in the technology both internally and through acquisitions," Schwartz said, adding, "There continue to be lots of opportunities … and of course we have yet to really scratch the surface on the diagnostic side."
The Stilla platform "allows us to participate in the market where we don't really compete today," Schwartz said, enabling Bio-Rad to further expand in applied research and clinical diagnostics and reach customers who expect higher throughput and automation.
DiVincenzo said that after Stilla launched its all-in-one solution last year, the company simply found itself "with a great product without a real global reach." Bio-Rad aims to add its own content to the Stilla system, he added.
Bio-Rad does not anticipate the Stilla system to cannibalize its ddPCR sales, Bio-Rad CFO Roop Lakkaraju said, as it slots into the high end of the dPCR market. Its QX Continuum — which is making "significant progress" in development, executives said on the call — targets the entry level of the digital PCR market, whereas its legacy ddPCR systems fit the remaining markets.
Financial results
Separately on Thursday, Bio-Rad reported that its fourth quarter revenues were down 2 percent year over year while its full-year 2024 revenues fell 4 percent.
For the quarter ended Dec. 31, 2024, Bio-Rad reported a 2 percent decline in revenues to $667.5 million from $681.2 million in Q4 2023, driven by lower sales in its life sciences business. On average, analysts expected revenues of $679.8 million for the quarter.
On the call, DiVincenzo said Bio-Rad has taken further steps to realign its cost structure, implementing a 5 percent workforce reduction to yield up to $55 million in savings in 2025 and fully annualized savings of up to $65 million achieved in 2026.
Lakkaraju said the broad-based cuts were motivated by softness across different areas of the market, with the majority in R&D and SG&A areas.
The firm's Q4 life science segment sales declined approximately 6 percent year over year to $275.0 million, driven by ongoing weakness in biotech and biopharma end markets. Clinical diagnostics segment revenues, meanwhile, increased approximately 1 percent year over year to $392.5 million.
Bio-Rad's net loss for the quarter was $715.8 million, or $25.57 per share, compared to net income of $349.7 million, or $12.14 per share, in the year-ago period. On a non-GAAP basis, Q4 EPS was $2.90, above analysts' average expectation of $2.88.
The company said it recognized a $977 million loss in the fair market value of its investment in Sartorius AG, which substantially contributed to the net loss.
For full-year 2024, Bio-Rad's revenues decreased approximately 4 percent to $2.57 billion from $2.67 billion in 2023, beating the consensus Wall Street estimate of $2.58 billion.
Life science segment sales for 2024 were $1.03 billion in 2024, which the firm said was a decrease of approximately 13 percent over 2023 on a currency-neutral basis, while full-year clinical diagnostics revenues were $1.54 billion, up approximately 4 percent over 2023 on a currency-neutral basis.
Company highlights in 2024 included the acquisition of Saber Bio, investments in Geneoscopy and Oncocyte, expansion of the ddPCR assay library, and a partnership with Allegheny Health Network to generate ddPCR minimal residual disease monitoring clinical evidence.
Bio-Rad reported a full-year 2024 net loss of $1.84 billion, or $65.36 per share, compared to a net loss of $637.3 million, or $21.82 per share, in 2023. Non-GAAP EPS was $10.31, beating the average analyst estimate of $10.06 per share. Bio-Rad recognized a change in the fair market value of its investment in Sartorius AG, which substantially contributed to the net loss, it said.
Bio-Rad ended the year with $488.1 million in cash and cash equivalents and $1.18 billion in short-term investments.
Regarding research funding globally, DiVincenzo said Bio-Rad sees modest increases in Germany and the UK and early signs of improvement in China due to stimulus programs but continued softness in France.
Last week, the Trump administration issued a directive to cap all indirect grant costs at 15 percent on all US National Institutes of Health grants. DiVincenzo said Bio-Rad would need more information about the directive to evaluate its potential impact and added that Bio-Rad did not consider the indirect spending actions in its outlook.
Overall, "NIH funding is not a significant component of our total sales," he said. Specifically, the US academic and government segment represents approximately a high-single-digit percent of Bio-Rad revenue, a subset of which is federally funded research, including from the NIH, with Bio-Rad's estimated federally funded research exposure totaling approximately 4 percent of its revenue.
On the call, Schwartz also noted that the indirect cost cap, "has come as a little bit of a shock to researchers," with capital equipment expenditure the most likely budget item impacted in the near term.
Bio-Rad anticipates non-GAAP currency-neutral revenue growth in 2025 of approximately 1.5 percent to 3.5 percent for 2025, excluding any revenue from acquisitions. On the call, Lakkaraju said Bio-Rad expects 1.5 percent to 3.5 percent revenue growth in life sciences and 2 percent to 3 percent growth in clinical diagnostics. On an as-reported basis, he said the firm expects Q1 revenues to be 5 percent to 7 percent lower year over year followed by sequential improvement.
Schwartz said on the call that midsized or larger M&A deals would be on Bio-Rad's radar screen once Stilla is accelerated through its global distribution network.
Shares of Bio-Rad finished Friday trading on the New York Stock Exchange down more than 9 percent at $277.16.