bioMérieux S.A.

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bioMérieux S.A.

Chemin de l'Orme
Marcy l'Etoile
F-69280
France
Telephone: +33 4 78 87 20 00
Fax: +33 4 78 87 20 90
Web site: http://www.biomerieux.com

Public Company
Incorporated: 1963 as BD Mérieux
Employees: 5,400
Sales: EUR 931 million ($1.3 billion) (2004)
Stock Exchanges: Euronext Paris
Ticker Symbol: BIM
NAIC: 339112 Surgical and Medical Instrument Manufacturing; 325414 Biological Product (Except Diagnostic) Manufacturing

bioMérieux S.A. is one of the world's largest specialists in the development of in vitro diagnostic methods, systems, and applications. The company's products are used to identify, measure, and quantify bacteria, viruses, and body substances, in order to help identify the appropriate course of treatment. bioMérieux develops and manufactures automated testing instruments and their software as well as the reagents and in vitro systems used to identify substances. Clinical diagnosis forms the largest part of the group's activities, at nearly 87.5 percent of total revenues. The company also has expanded into the field of industrial microbiological control, providing diagnostic and measurement systems to determine air, food, water, and other environmental quality levels. bioMérieux has developed a highly international business, with a presence in more than 130 countries and a worldwide network of sales and manufacturing subsidiaries. The company also operates nine research and development centers throughout the world. bioMérieux traces its origins to Marcel Mérieux, who served as an assistant to Louis Pasteur. The Mérieux family remains highly involved in the company, with Alan Mérieux serving as company chairman. The family also retains control of more than 60 percent of shares following the company's initial public offering on the Euronext Paris Stock Exchange in 2004. In that year, the company posted sales of EUR 934 million ($1.3 billion).

Vaccine Offshoot in the 1960s

The Mérieux name was closely connected with the field of diagnostics and vaccine research almost from the sector's beginnings at the turn of the 20th century. Marcel Mérieux served as an assistant to Louis Pasteur during Pasteur's groundbreaking research in the late 19th century. In 1897, Mérieux set up his own laboratory, Institut Mérieux, which became a world-renowned producer of vaccines, a position the institute would retain into the 21st century.

As part of its work, Institut Mérieux began developing testing methods and, especially, reagents in order to identify the presence of and the quantity and quality of bacterial and viral infections. The use of reagents became an important element in the fight against disease, and Institut Mérieux's reagents operations grew into an important division within the institute. Joining Marcel Mérieux in the institute was his son, Charles, who later became the institute's head.

The discovery of penicillin led to the development of other antibiotics and especially the recognition that many antibiotics were more effective against certain bacteria than other bacterial types. Reagents, used to identify and quantify the source of an infection, became an increasingly important diagnostic tool. The need for investment in developing and producing new reagents and diagnostic systems led Institut Mérieux to spin off its reagents division into a joint venture with the United States' Becton, Dickinson. Created in 1963, the new company, known as BD Mérieux, was led by a new generation of the Mérieux family, Alain Mérieux.

BD Mérieux's separation from Institut Mérieux took place toward the end of the 1960s. In 1968, Rhone Poulenc acquired a stake in Institut Mérieux, which would have given the French pharmaceuticals giant control of 50 percent of BD Mérieux. Yet Becton, Dickinson was not interested in continuing the joint venture with Rhone Poulenc, then controlled by the French government. Instead, the American company asked Alain Mérieux to buy out Institut Mérieux's 50 percent of the joint venture.

Alain Mérieux's purchase of the stake in BD Mérieux proved to be a first step toward the reagent company's transformation into an independent entity. By 1974, Becton, Dickinson had reduced its own position in the company to that of minority shareholder. With majority control of the company, Alain Mérieux changed the company's name, to bioMérieux.

By the late 1980s, bioMérieux had expanded onto an international scale. The company became one of the leaders of the in vitro diagnostics market. Although still quite small in comparison with the in vitro and reagents operations of many of the pharmaceuticals industry's giants, bioMérieux emerged as one of the largest specialist companies in the field.

Acquiring Scale into the 2000s

Nonetheless, bioMérieux needed to gain sufficient scale to compete in the increasingly global market. Through the 1990s, the company adopted a two-pronged approach toward growth. On the one hand, the company made a small number of acquisitions. On the other hand, the company began developing a worldwide network of research partnerships and alliances.

Among the company's first acquisitions was that of API Systems. Based in France, API had become a world-leading developer and producer of manual testing systems for bacterial identification and, of importance, bacterial susceptibility to antibiotic compounds. The acquisition of this technology was particularly important into the 1990s, as the overuse and nonspecific use of antibiotics had resulted in the development of more and more strains of antibiotic-resistant bacteria. Indeed, by the turn of the 21st century, hospitals found themselves increasingly confronted with bacterial strains that proved resistant not only to traditional antibiotics, but also to many of the more powerful modern antibiotics. Susceptibility testing played an important role in helping to prevent the development of resistant bacteria.

bioMérieux made a second significant acquisition in the late 1980s. In 1988, the company turned to the United States, where it acquired VITEK Systems. That company had pioneered and become a world leader in the development of automated bacterial testing and diagnostic systems.

Into the 2000s, bioMérieux completed two more acquisitions. The first of these came at the end of 1998, with the purchase of Micro Diagnostics Inc. That U.S. company, based in Chicago, was a specialist in diagnostic and testing media for industrial applications. The addition of Micro Diagnostics enabled bioMérieux to expand beyond its focus on the healthcare and pharmaceuticals markets to include reagent and testing systems for areas such as environmental control, waste and water management, the food industry, and the like.

The next major acquisition was completed in 2001, when bioMérieux purchased the diagnostics division of Akzo Nobel subsidiary Organon Teknika. This purchase helped to boost bioMérieux's presence not only in the United States but on a global level. The Organon acquisition also played a significant part in the development of bioMérieux's new polycarbonate-based testing system, BacT/Alert 3D, launched in 2002.

Public Company in the New Century

During this period, bioMérieux had been actively seeking out partnerships and alliances to expand its product range as well as its scope of operations. An early alliance formed by the company came in 1996, between the group's bioMérieux Vitek subsidiary in the United States and Affymetrix, Inc. That alliance provided for the joint development of genotyping testing procedures. In 1998, the companies strengthened their alliance by extending it to include clinical diagnostic tests using Affymetrix gene variation testing systems.

A new alliance came in 1999, when bioMérieux joined with Lyonnaise des Eaux in France to launch a joint research and development program in order to extend Affymetrix's Gene-Chip system to water testing and management. Into the early 2000s, bioMérieux continued signing up partnerships, notably with Celera, CEA, and Eli Lilly.

The need for scale nonetheless remained an important issue for the company. At the end of 2000, the company came up with an answer to that problem, announcing an agreement to merge with fellow French company Pierre Fabre. Like bioMérieux, Fabre was a family-owned company, specialized in the dermatological and cosmetics industries and headed by its founder, Pierre Fabre, who enjoyed a friendship with Alain Mérieux. Fabre's company, with revenues of nearly EUR 1.2 billion, was also nearly twice the size of bioMérieux. The two companies touted the potential of synergies between their merged operations, to be named bioMérieuxPierre Fabre.

The merger quickly unraveled, however, as the purported synergies failed to materialize. Meanwhile, Fabre and Mérieux were unable to agree on the direction of the newly enlarged company, which reportedly caused a deterioration in the friendship between the two men. In the end, Fabre and Mérieux chose friendship, and in 2002 the companies agreed to split up again.

Company Perspectives:

Mission & Strategy: Become a key player in the in vitro diagnostics field.

bioMérieux's ambition is to become a key player in the in vitro diagnostics field of infectious diseases and other pathologies, such as cardio-vascular diseases or cancers. It has implemented the following strategy: focusing its development on applications with a high potential; launching new products to better satisfy the needs of patients and the imperatives of public health in general; reinforcing its worldwide network to seize growth opportunities; continuing with its sustained effort in research and development; investing in new technologies via strategic alliances and targeted purchases that guarantee growth and technological independence; pursuing a balanced financial strategy to seize on growth opportunities.

Instead, bioMérieux went public, listing its stock on the Euronext Paris Stock Exchange in 2004. The initial public offering proved to be one of the more successful for the year, and was oversubscribed by some five times. The newly public company continued to seek out partnerships as well as extensions to its existing alliances. In March 2005, for example, the company reached an agreement with the Chinese Academy of Medical Sciences to launch an R&D center in Beijing. By October of that year, the company also had extended its alliance with Affymetrix and strengthened a cancer detection alliance with ExonHit Therapeutics. bioMérieux intended to remain at the forefront of the in vitro diagnostics market into the new century.

Principal Subsidiaries

bioMérieux Argentina; bioMérieux Australia; bioMérieux Austria; bioMérieux Belgium; bioMérieux Brazil; bioMérieux Canada; bioMérieux Chile; bioMérieux China; bioMérieux Columbia; bioMérieux Denmark; bioMérieux Germany; bioMérieux Greece; bioMérieux Finland; bioMérieux Inc. (USA); bioMérieux India; bioMérieux Italy; bioMérieux Japan; bioMérieux Korea; bioMérieux Mexico; bioMérieux New Zealand; bioMérieux Norway; bioMérieux Poland; bioMérieux Portugal; bioMérieux Russia; bioMérieux Spain; bioMérieux Sweden; bioMérieux Switzerland; bioMérieux Thailand; bioMérieux The Netherlands; bioMérieux B.V. (The Netherlands); bioMérieux Turkey; bioMérieux United Kingdom; bioMérieux West Africa.

Principal Competitors

Siemens AG; Abbott Laboratories; Sanofi-Aventis; Eli Lilly and Co.; Asahi Kasei Corporation; GE Medical Systems; Baxter International Inc.; Medtronic Inc.; Otsuka Pharmaceutical Company Ltd.

Key Dates:

1897:: Marcel Mérieux established Institut Mérieux in order to develop vaccines.
1963:: Institut Mérieux spins off reagents division into BD Mérieux, a joint venture with Becton Dickinson, and Alain Mérieux becomes head of BD Mérieux.
1968:: Alain Mérieux buys out Institut Mérieux's stake in BD Mérieux after the institute is acquired by Rhone Poulenc.
1974:: Becton Dickinson becomes minority shareholder in BD Mérieux, which changes its name to bioMérieux.
1987:: bioMérieux acquires API Systems in the United States.
1988:: The company acquires VITEK Systems in the United States.
1996:: bioMérieux forms an alliance with Affymetrix, Inc. in the United States.
1999:: bioMérieux forms an alliance with Lyonnaise des Eaux in France.
2000:: The company merges with Pierre Fabre to form bioMérieuxPierre Fabre.
2002:: bioMérieux and Pierre Fabre agree to split up.
2004:: bioMérieux goes public on the Euronext Paris Stock Exchange.
2005:: The company extends alliances with Affymetrix and ExonHit Therapeutics.