Tokyo and Aliso Viejo, California (July 6, 2017) -Konica Minolta, Inc. (Konica Minolta) (TOKYO: 4902) (ISIN: JP3300600008) and Ambry Genetics Corporation (Ambry) today announced the signing of a definitive agreement for a subsidiary of Konica Minolta to acquire Ambry. The transaction is partially funded by Innovation Network Corporation of Japan (INCJ). $800 million will be paid upon closure, and there will be an additional payment of up to $200 million based on certain financial metrics over the next two years, valuing the acquisition up to a total of $1.0 billion.
Founded in 1999, Ambry is a privately held healthcare company in the U.S., led by founder, President and Chairman Charles L.M. Dunlop and CEO Dr. Aaron Elliott. Ambry has the world’s most comprehensive suite of genetic testing solutions for inherited and non-inherited diseases as well as for numerous clinical specialties, including oncology, cardiology, pulmonology, neurology, and general genetics. They are recognized as a leader in diagnostic solutions for hereditary conditions in the United States, by having performed more than one million genetic tests and identified more than 45,000 mutations in at least 500 different genes. Ambry is known as a pioneer and thought leader in genetic testing being the first laboratory in the world to offer such tests as hereditary cancer panels and clinical exome sequencing.
Konica Minolta views the addition of Ambry as the first stepping-stone to create an exciting new medical platform aimed at fulfilling the potential of precision medicine – an emerging approach to healthcare where genetic or molecular analysis is used to match patients with the most appropriate treatment for their specific disease. Precision medicine aims to improve a patients’ quality of life and save the healthcare system money by eliminating unnecessary and ineffective treatments. Konica Minolta plans to bring Ambry’s capabilities first to Japan, and then to Europe.
“This acquisition is the first in a series of strategic initiatives to secure a leading position for Konica Minolta in precision medicine”, said Shoei Yamana, President and CEO of Konica Minolta. “The future of medicine is patient-focused. Together with Ambry, we will have the most comprehensive set of diagnostic technologies for mapping an individual’s genetic and biochemical makeup, as well as the capabilities to translate that knowledge into information the medical community can use to discover, prevent, and cost-effectively treat diseases. This will not only serve as the future foundation for our healthcare business, but will pave the way for a fundamental shift in the way medicine is practiced globally.”
The acquisition of Ambry and the advancement of precision medicine marks a strategic and important shift for Konica Minolta’s healthcare business. Leveraging its long history of innovation in materials science, nanofabrication, optics, and imaging, Konica Minolta has developed a comprehensive range of technologies and services in the healthcare field spanning digital X-ray diagnostic imaging systems, diagnostic ultrasound systems, and ICT service platforms for medical institutions.
Ambry’s genetic testing capabilities complement Konica Minolta’s advanced imaging technology to create the most comprehensive range of healthcare diagnostics for use by pharmaceutical companies, healthcare providers, payers, and consumers. In 2015, Konica Minolta pioneered advanced immunostaining technology – High-Sensitivity Tissue Testing (HSTT)1 – that uses fluorescent nanoparticles to detect and quantify the proteins that drive disease states and offers far greater precision and accuracy than conventional immunostaining techniques. With initial applications in oncology, the proprietary technology can determine the exact cellular location and amount of specific proteins that manifest in cells, offering an early-stage, highly precise diagnosis and insights into a patient’s disease that can inform research and a clinicians’ treatment plan.
“We’re excited by this opportunity to combine both our companies’ technologies to unlock new opportunities for precision medicine,” said Charles Dunlop, President and Chairman of Ambry Genetics. “As a part of Konica Minolta, we will have the resources, technology, and scale to advance biomedical research and enable the matching of more patients in more countries with specialized medicines that target the underlying cause of their illness.”
Konica Minolta’s HSTT technology will be further enhanced by Ambry’s genetics-based screening techniques, which enable clinicians to analyze both tumor and normal tissue to diagnose hereditary cancer, while also providing guidance regarding drug eligibility and response. Ambry recently launched a combined genetic test for both inherited and acquired mutations in DNA mismatch repair genes to indicate appropriate treatment options for cancer patients who may benefit from PD-1/PD-L1 immunotherapy. PD-1 and PD-L1 checkpoint inhibitors help the patient's immune system recognize attack and destroy PD-L1-positive cancer cells that would otherwise evade detection by the immune system.
“The combination of these bioinformatics capabilities, alongside Konica Minolta’s HSTT technology, will create new opportunities for drug discovery and clinical trials not currently available,” said Kiyotaka Fujii, Senior Executive Officer, President, Global Healthcare, Konica Minolta. “Konica Minolta will look to accelerate innovations by drawing on the strengths of both companies. In addition to introducing Ambry’s genetic-testing capabilities to the Japan market, we will look to develop new bio-imaging and proteomic services and solutions to benefit doctors, patients, and pharmaceutical companies.”
Under the terms of the agreement, Konica Minolta via Konica Minolta Healthcare Americas, Inc., (MHUS), a wholly owned subsidiary of Konica Minolta, and INCJ, will make an upfront, all-cash payment of $800 million to Ambry. MHUS will invest 60% and INCJ will account for the remaining 40%. In addition, Ambry shareholders will receive up to $200 million in incremental consideration based on certain financial metrics over the next two years, valuing the acquisition up to a total of $1.0 billion.
The transaction is expected to close in the third quarter of fiscal year 2017, subject to customary regulatory approvals. Ambry would thereafter become a consolidated subsidiary of Konica Minolta, continuing to operate under the Ambry name and headquartered in Aliso Viejo, California.