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Topics Mergers & Acquisitions Medical Injection Molding
Companies & Associations
SUNNYVALE, CALIF. (Sept. 28, 1:50 p.m. ET) — Medical diagnostics firm Cepheid plans to buy a plastics molder to overcome supply constraints for cartridges it relies on for its systems, according to a news report.
GenomeWeb News reported Sept. 27 that Cepheid President and CEO John Bishop told analysts that the firm’s diagnostic systems sales were hurt in the third quarter by “intermittent interruptions in the supply of Xpert cartridge parts.”
Bishop did not identify the current molder of its cartridge parts or which molder it is targeting to acquire. Cepheid CFO Andrew Miller reportedly told analysts the price of the acquisition would be in the mid-teens of millions of dollars. Cepheid would move the molding operating into a new facility, buy new equipment to boost molding volumes and also eventually set up a molding operation in Cepheid’s facility in Sweden.
Sunnyvale-based Cepheid has developed a compact, fast, automated molecular diagnostic workstation system called GeneXpert. The system relies on patented cartridges.
Cepheid officials told analysts that its third quarter revenue would be in the $79 million to $81 million range, below its target and below analyst’s expectations. They blamed the shortfall on a shortage of cartridges as Cepheid was developing higher capacity production tooling and processes.
Cepheid systems are employed in clinics around the world to check on infectious diseases such as tuberculosis. The firm had sold 3,350 systems globally by the end of its second quarter, June 30. Its second quarter sales was $81 million and net profit, $1.1 million.
Cepheid officials could not be reached as of press time.