Invitrogen Acquires ABI

Well, it has been a very busy week in San Diego biotech. We’re all getting ready for the big BIO 2008 conference, and we also got the news that Invitrogen(IVGN) acquired Applied Biosystems (ABI). The deal appears to have “something for everyone,” as Invitrogen CEO Greg Lucier will remain CEO, but the new company will take the ABI name and be headquartered in Carlsbad, just north of San Diego.

How will the companies integrate? The idea seems good on paper (as did the Time/Warner AOL merger), as the products are complementary: IVGN has the consumables that can be used with ABI’s instruments. Lucier has been quoted in saying that the merger will “double the consumables business.” One thing that is glaringly obvious to me, having been through several biotech company integrations, is that the sales forces of the two companies will be vastly different and perhaps difficult to integrate. Although instruments and the consumables used in them seem very straightforward to sell together, it is very difficult to get an instrument sales person, who is accustomed to a longer sales cycle and larger commissions, to sell smaller items. We’ll see how the sales force is structured–there is no reason why the different types of account managers can’t work together.

Lucier has assuaged fears of the return of integration problems that occurred during previous mergers, stating that the IT infrastructure is much more robust now. I believe that, as my casual conversations with IVGN employees seem to reflect that much has been done in integrating six sigma principals into many aspects of operations, likely including IT.

I have always been intrigued at how casually biotech and life sciences companies treat brands, as it appears all Invitrogen products will be re-branded as ABI (although I have no inside information that this will happen). We’ve seen this happen many times (GE Healthcare, Millipore, recently) and normally, Invitrogen has been the great “amalgamator” (Life Technologies, PanVera, Molecular Probes). In other industries, brands are treated very carefully, as it is understood how important brand equity is in attracting and keeping customers. Perhaps in the life sciences, we are all used to constant change by now?

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