TOKYO — Konica Minolta will buy a U.S. startup that assists pharmaceutical companies in new-drug development, the latest move in its efforts to step up its health care operations.
The Japanese company said Monday it will acquire Invicro for 32 billion yen ($285 million) in November. Founded in 2008, Massachusetts-based Invicro is a contract research organization providing imaging services to the pharmaceutical and biotechnology industry to assist with new-drug development. Its strength is in numerical analysis and identifying biomarkers to find an illness and assess its progress. Invicro serves 140 companies, including Japanese drug makers, and is expected to generate an operating profit of $17 million on sales of $106 million in fiscal 2018.
The deal marks the second-largest acquisition for Konica Minolta, which will make a full-blown entry to drug-development assistance via this purchase. Konica Minolta has a proprietary technology known as High Sensitive Tissue Testing to analyze proteins and detect cancer. Combining this with Invicro’s biomarkers would help to give a detailed picture of drug efficacy, for instance.
Konica Minolta projects that research and development spending by drugmakers will top 17 trillion yen in 2020. The company seeks to help lower the costs of drug development and shorten the time necessary, with the Invicro acquisition.
Konica Minolta has been sharpening focus on health care operations, in light of uncertainties in its mainstay business of office equipment. In July, the company announced an acquisition of cancer diagnosis company Ambry Genetics, based in California. In a joint investment of up to 110 billion yen with the Innovation Network Corp. of Japan, Konica Minolta will shoulder around 60% of the spending.
“We aim to be a leading company in precision medicine,” which identifies effective treatments based on the patient’s genetic, environmental and lifestyle factors, President Shoei Yamana said.
The two key pillars of this effort would be Ambry Genetics, strong in genetic testing for breast and colon cancer, and Invicro, equipped with such latest technologies as artificial intelligence.
Other precision equipment makers are also shifting focus to health care, amid declines of office equipment and digital camera businesses. Fujifilm Holdings in April bought lab chemicals provider Wako Pure Chemical Industries for around 155 billion yen. Canon in 2016 bought Toshiba Medical Systems for around 665.5 billion yen.
Konica Minolta does not have same cash resources as the two rivals. So rather than get into expensive drug development, it opted toward diagnosis and drug-development assistance. The real battle now begins as the company works to put the business into place and generate profit.