WOLF, ASTORG SAY TEAMS WILL REMAIN IN PLACE
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BY RON SHINKMAN
Luxembourg private equity firm Astorg has beefed up its reproductive medicine portfolio with pending acquisitions of equipment supplier Hamilton Thorne and the IVF/ART business of Cook Medical.
Massachusetts-based Hamilton Thorne Ltd. – parent company of subsidiary Hamilton Thorne, Inc. – announced last week that Astorg is acquiring the company outright for $228 million, or $1.63 per share in U.S. dollars. That’s roughly a 54% premium over its recent trading price on the Toronto Stock Exchange. The deal is expected to close by late 2024.
Hamilton Thorne Executive Chairman David Wolf said in an email that all of the company’s employees will remain onboard after the transaction closes, including himself. And while the company is U.S.-based, it trades on a Toronto exchange because “the Canadian markets represented a desirable alternative for a company of our size and scale,” Wolf noted.
“When two high profile tank failures occurred in 2018, I sat there in disbelief along with so many of my colleagues.”
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Stock Performance
The company reported 2023 net income of $1.1 million on revenue of $67.2 million. However, that included a $1.7 million gain based on foreign currency fluctuations. Otherwise, the company reported an operating loss of $607,000 last year. In 2022, it lost $2.1 million on revenue of $58.2 million, although that included a nearly $4.1 million loss tied to currency fluctuations. Its 2022 operating profit was $1.9 million.
For the first quarter of 2024, Hamilton Thorne reported a loss of $2.1 million on revenue of $19.4 million. That included an operating loss of more than $936,000. In the first quarter of 2023 it reported net income of more than $896,000 on revenue of $16.7 million. That included operating income of $77,405.
Exit
Brian Leonard, chief executive officer and president of IVF on Demand, a Pennsylvania-based supplier for reproductive medical practices, observed that Hamilton Thorne was in a tight spot that made it look for a buyer, prompted in part by some acquisitions that did not spur hoped-for growth. Among the acquisitions Hamilton Thorne has made in recent years include Belgian consumables manufacturer Gynetics last October, as well as equipment manufacturer Planer Ltd. in 2019.
“Hamilton Thorne likely could have continued down the path they were on with the hopes of improving margins and (pre-tax earnings) but the headwinds they faced forced this less-than-ideal exit,” Leonard said in an email, in reference to the company’s recent losses.
Merger
At virtually the same time the Hamilton Thorne acquisition was underway, Astorg also announced that it had signed a letter of intent to acquire the IVF and other assisted reproductive technology business of Bloomington, Ind.-based Cook Medical
Financial terms of that transaction were not disclosed. The company said that all 93 employees who work in Cook’s ART division would immediately receive job offers from Astorg. After the transactions closed, Astorg said the Cook assets and Hamilton Thorne would be merged. Although the deal also includes Cook’s manufacturing facility in Pennsylvania, the spun off venture will continue to manufacture products for Cook for three years after the transaction closes. After that, the factory’s 209 employees will join the merged companies.
“I believe Astorg took advantage of two companies actively looking for an exit while also seeing a handful of synergies,” Leonard said. He added that Cook’s ART division mostly focused on consumables, while Hamilton Thorne is focused more on capital equipment.
Hamilton Thorne Ltd. has eight brands and sells about five dozen products to fertility medical practices, including computer assisted sperm analysis platforms, laser-guided imaging of oocytes and spindles, and numerous consumables in support of both sperm analysis and imaging. Brijinder Minhas, vice president of the healthcare division for MidCap Advisors, LLC, said the company developed one of the first automated and computerized platforms for semen analysis.
Cook’s ART line includes a benchtop incubator as well as products to assist in cervical ripening. Minhas observed that its best-known products are embryo transfer catheters, pumps and aspiration needles.
Cook Medical Senior Vice President D.J. Sirota said in a statement that “Astorg has exciting plans to build an IVF/ART manufacturing hub at our facility in Vandergrift…creating a core location for manufacturing operations for Cook ART products.”
The entire Cook enterprise reported revenue of about $2.3 billion in 2022, but as a private company it does not break out exact figures, or for its various divisions. It had struck a deal in 2023 to sell its ART business to the CooperCompanies for $875 million. However, CooperCompanies backed out of the deal last August, according to the Federal Trade Commission.
The acquisitions will be folded into Astorg’s portfolio of biotech firms, including hg medical, Demetra, Nemera, Echosens and Sebia, among others.
Leonard noted that Astorg’s portfolio could certainly leverage its resources to develop new technologies.
“Alternatively, they could keep business as usual while merging resources and cutting costs to improve the collective financial health,” he said. “That is the more likely outcome as with most private equity firm transactions.”
Wolf told Inside Reproductive Health that he will be able to provide more details on the transaction after Hamilton Thorne’s proxy materials are mailed in some weeks’ time.
The content and themes expressed within the article are that of the news. The advertiser does not have editorial control over the content of this article, and Inside Reproductive Health maintains full editorial independence. The views and opinions expressed in this article do not represent the views of the Advertiser or of Inside Reproductive Health.
GIVE ME A TIME MACHINE, THIS IS HOW I’LL STOP THE TWO CATASTROPHIC 2018 TANK FAILURES FROM EVER HAPPENING!
By Dr. William Baird, HCLD
Cryotank failures are devastating – it’s everyone’s worst nightmare in the field of IVF. When two high profile tank failures occurred in 2018, I sat there in disbelief along with so many of my colleagues.
Thousands of people lost their last chance at starting or expanding their families in those tanks – people with advanced ages, cancer patients, military personnel, and embryos of siblings that can no longer be conceived. Clinics were slapped with millions of dollars in lawsuits that are taking years to resolve because of the complexity that comes with human and manufacturing errors.
There were a few things that caused these tank failures, but ultimately it comes down to action and responsibility. Attempts were made to prevent these failures, but they either weren’t completed or done correctly. In one of the cases, the staff was able to flip a switch. The alarms were bothering them so much they turned them off on a Friday, then forgot to turn them back on. They dumped buckets of liquid nitrogen (LN) into the tanks that were empty by Monday. Vapor tanks are very unforgiving and more complicated than people think – they can be good one minute and bad the next. I don’t think this is always taken into consideration as labs move to these large tanks.
Technology and humans can both fail – that’s why these failures happened, and it’s important to note that both of these failures occurred in large vapor tanks. A failure is always catastrophic for the patients affected, but these large vapor tanks are holding thousands of samples. If you lose a typical dewar, you’re going to lose 100 or more individual patient samples. It’s still a failure and it’s horrific, but you’re not making 2500+ phone calls to patients to let them know that you’ve lost their irreplaceable samples. I am of the strong belief that you do not, literally, put all your eggs in one basket.
CAP has specific regulations in place to prevent catastrophes, but labs need to be more responsible for how fragile and important these specimens they’re storing are.
How would I have prevented these tank failures? Three things:
1 - Smaller tanks
2 - A greater sense of staff responsibility
3 - A state of the art, fool-proof, tank monitoring system
Our team at Boreas was already working on our initial product, a weight-based monitoring system called the CryoScout™, when these two tank failures occurred. The failures were the catalyst to finish what we started and create a monitoring system that was more accurate and reliable than anything else on the market, with an alarm system that couldn’t be manipulated.
Weight is far more accurate when it comes to measuring LN inside a cryotank than temperature is, but we needed to do more than that. We needed to build a system that couldn’t be turned off due to alarm fatigue, and gives you the ability to be proactive vs. reactive when monitoring your tanks. That’s why we started Boreas Monitoring and built the Cryoscout™. We provide relevant data points about your tank health that gives you the time to take corrective action.
As it stands today, most IVF labs are still at too high of a risk of repeating the 2018 tank failure catastrophes. Your lab staff, the courts, and most importantly, your patients expect a better system. We can help your lab create an implementation plan to protect your cryotanks, patients, and irreplaceable samples from catastrophes like the 2018 tank failures. Just grab a time with us to book your demo using the link below and we’ll set up a meeting to help.
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