New BD Diagnostics and SDIX Collaboration: Will 1 + 1 = 3?

New Partnerships Between Diagnostic Companies Have Created Synergies with the Potential to Deliver Real Innovation in Food Safety Testing.

In my last blog, I discussed Life Technologies’ acquisition of Matrix MicroScience. A new collaboration between SDIX and BD Diagnostics, a segment of BD (Becton, Dickinson and Company), also is intriguing.

BD has been relatively quiet in the food space over the past decade. Many people rely on BD media for food microbiology analysis, but BD hasn’t really built on this foundation.

SDIX continues to expand and build upon its easy to use lateral flow devices (LFD). Also, the company has developed some clever and effective enrichment medias that when combined with the LFDs make the overall detection that much stronger and better.

Now these two companies are partnering to enable BD to offer new detection capabilities. SDIX will provide the antibodies and phage technology while BD will develop the detection system and market the product.

What niche is BD targeting and why are they utilizing an antibody-based approach? In 2009, BD acquired HandyLab and its molecular technology for $275M. While principally targeted to enhancing their competitive position in HAI (healthcare associated infections), the HandyLabs box also could offer a competitive advantage in food microbiology given its automation and ease of use (EOU).

The U.S. food market seems to increasingly be using molecular methods, and BD has an excellent molecular solution. So why is BD now investing in an antibody-based approach?

The question that comes to mind for me is how this new BD/SDIX product—which is probably one to two years away from commercialization—might be better than new product announcements from Roka, 3M, and most recently Neogen’s ANSR?

BD better have some good market success for this new detection platform. The upfront payment of $1.25M alone, combined with up to $2.5M in performance payouts and royalties, means BD will have to sell 250,000 tests just to cover this upfront signing fee (based on the assumption that the test selling price would be $8, and the margin would be in the 60-65% range). This doesn’t include R&D, sales, marketing, and support expenses associated with this project.

 

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