Companies usually try to say all the right things about win-win situations when they strike merger deals, but it’s always good to check back after a few months to see if the honeymoon is over. So last week I tracked down Mark Stevenson, one of the principals involved in the November merger of Carlsbad, CA-based Invitrogen and Foster City, CA-based Applied Biosystems.
He had some good news. The newly-merged company, rechristened Life Technologies (NASDAQ: LIFE), is truly keeping its headquarters in Carlsbad, CA, where Invitrogen was based. Plus, while the merged company plans to save $80 million by cutting overlapping administrative jobs, the combined company will employ more people in San Diego County than were employed by Invitrogen, says Stevenson, president and chief operating officer of the new company. Life Technologies even expects to grow this year, despite the global economic downturn.
“We feel that San Diego is a great biotech hub,” Stevenson says. “It has a mix of really good academic centers, clinical translational research, and an entrepreneurial startup environment.”
The rationale of the merger was to bring together the leader in high-powered DNA sequencing machines (Applied Biosystems) with the leader in consumable biological lab supplies (Invitrogen), Stevenson says. The deal provides “critical mass” around the world with a sales force of 3,000 people, and a total of 9,500 employees. The combined company now has a $300 million annual R&D budget, which allows it to place “big bets” on personalized medicine and regenerative medicine that wasn’t possible before, Stevenson says.
A few trends are working in Life Technologies’ favor. About half of its revenue comes from academic customers, who tend to win multi-year federal research grants that are mostly insulated from the downturn, Stevenson says. The pharmaceutical and biotech industries have taken a well-documented beating, which makes it difficult to sell them as many expensive instruments as in years past. But that trend is being offset by economic stimulus programs in China, Japan and other countries that are pumping money into biomedical research, Stevenson says. In the U.S., the company hopes a stimulus plan will include more money for the National Institutes of Health, or at least loosen restrictions on embryonic stem cell research that could enable more private investment to flow into the sector, he says.
As it stands, Life Technologies now has 1,050 employees in Carlsbad, and another 1,475 in the San Francisco Bay Area at its Foster City campus, says company spokesman Bill Craumer. The primary reason to keep the company based in Carlsbad is the ability to access a deep biotech talent pool, and the ability to recruit more talented workers to the sun and beaches of Southern California, Stevenson says.
In the job postings that Biocom tracks for its members, Life Technologies is one of the few that still regularly has multiple open positions, says Tim Ingersoll, a spokesman for Biocom, the regional life sciences trade association. Greg Lucier, the chairman and CEO of Life Technologies, has strong community ties, having served a two-year stint as Biocom’s chairman.
“We’re ecstatic they’ve chosen to keep the headquarters in Southern California,” Ingersoll says. “They are one of the companies going down the path toward bedside genome sequencing, and that’s going to lower the cost of health care.”
Life Technologies also is one of the companies, along with San Diego-based Illumina, pushing the edges of sequencing technology to make it possible to sequence an entire human genome much more cheaply, possibly for as little as $1,000. If this can be done—and it still hasn’t been proven—it could usher in a new era in which people get a drug regimen that’s tailored to respond to their genetic profile rather than the current one-size-fits-all model of medicine. “We were in the business of really changing the way medicine happens, and it would impact life,” Stevenson says, explaining how they came up with the new name.
It’s heady stuff, this life business, but the big corporate name apparently allows people there to retain a sense of humor. “One of the jokes within the company is how there’s no need for a work/LIFE balance anymore,” Stevenson says.