Cyprotex, the UK-based provider of ADME (Absorption, Distribution, Metabolism and Elimination) and toxicity services, has broadened the scope of its toxicological assay and screening capabilities by acquiring US contract research organisation CeeTox.
The UK company is paying an initial consideration of £0.63 million for the business and assets of CeeTox, which provides in vitro toxicological assays and screening data mainly to the cosmetics and personal care Industries.
This portion will be funded from Cyprotex’s internal cash resources, while a further 5% is payable on specified net sales over the next four years, to a maximum amount of £3.1 million.
The acquisition is being handled by Cyprotex’s US trading subsidiary, Apredica, and is expected to be earnings-neutral in its first year.
Based in Kalamazoo, Michigan, CeeTox was founded in 2003 and acquired two years later by North American Science Associates (NAMSA), a medical research organisation that offers consulting, clinical and laboratory services to medical device, in vitro diagnostic and biologics manufacturers.
NAMSA retains a licence for the application of CeeTox's in vitro toxicology expertise to medical-device testing.
The acquired business recorded sales of around £2.3 million in the year ended 30 September 2013 and made an operating loss of approximately £0.9 million.
The expectation is that Cyprotex will continue to run CeeTox from Kalamazoo until the business and assets are relocated to the UK company’s US base in Watertown, Massachusetts.
Acquiring CeeTox “affords Cyprotex the opportunity to grow revenues significantly”, said the latter’s chief executive officer, Dr Anthony Baxter.
In particular, the deal enables Cyprotex “to offer a more complete assay and screening service to the cosmetics and personal care industry, already an expanding customer segment, and will materially extend the company’s footprint in its established core pharmaceutical and agrochemical industry markets”, Baxter explained.