- PerkinElmer has struck a deal to buy BioLegend for $5.25 billion to add antibody capabilities that could drive growth of its discovery and analytical solutions business.
- BioLegend provides antibodies and reagents for use in applications such as proteogenomics, single cell research and bioprocessing. While the applications are primarily in the discovery and analytical business, PerkinElmer said the deal could benefit its diagnostics franchise.
- Evercore ISI analysts hailed the deal, the latest in a series of takeovers inked by PerkinElmer, as potentially transformative for the discovery and analytical business, though noted there's competition from BD and Thermo Fisher Scientific in the antibody market.
The business development team at PerkinElmer has been busy. Boosted by revenues from COVID-19 testing, PerkinElmer has unveiled a series of takeovers this year, snapping up Immunodiagnostic Systems Holdings, Nexcelom Bioscience and Oxford Immunotec for a combined $1 billion.
Now, PerkinElmer has taken its dealmaking to another level with the acquisition of the fast-growing antibody provider BioLegend. Before the pandemic, BioLegend was growing at around 20% a year. Revenues for 2022 are forecast to hit $380 million. The Evercore analysts expect the deal to "transform" PerkinElmer's discovery and analytical unit into a high-single-digit growth business. In 2019, the last year before the pandemic affected sales, the unit grew its revenues by 3%.
PerkinElmer is betting that BioLegend can continue to grow quickly. As the Evercore analysts note, there are questions about whether that will happen. BD and Thermo Fisher also play in the antibody market but do not enjoy the pace of growth of BioLegend, raising concerns about the sustainability of its upward trajectory.
The Evercore analysts downplayed the concerns, arguing BioLegend's focus on conjugated antibodies are more differentiated and harder to make than products in the primary antibody market. The analysts also pointed to BioLegend's ability to retain customers over the past five years as evidence that it has unique capabilities.
PerkinElmer shared news of the takeover alongside second quarter results that beat expectations. Organic growth of 59% in the diagnostics franchise and 22% in the discovery and analytical solutions business enabled PerkinElmer to raise full-year guidance by $200 million to $4.57 billion.
The target reflects the assumption that sales will slow in the second half of the year. PerkinElmer has generated revenues of $2.5 billion over the first half of 2021 and expects to bring in around $1 billion in both the third and fourth quarters.