BioméRieux S.A. Business Information, Profile, and History

Company Perspectives:

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

bioMérieux's ambition is to become a key player in the in vitr o diagnostics field of infectious diseases and other pathologies, suc h as cardio-vascular diseases or cancers. It has implemented the foll owing strategy: focusing its development on applications with a high potential; launching new products to better satisfy the needs of pati ents 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 techn ologies via strategic alliances and targeted purchases that guarantee growth and technological independence; pursuing a balanced financial strategy to seize on growth opportunities.

History of BioméRieux S.A.

bioMérieux S.A. is one of the world's largest specialists in t he development of in vitro diagnostic methods, systems, and applicati ons. The company's products are used to identify, measure, and quanti fy bacteria, viruses, and body substances, in order to help identify the appropriate course of treatment. bioMérieux develops and m anufactures automated testing instruments and their software as well as the reagents and in vitro systems used to identify substances. Cli nical 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 diagn ostic and measurement systems to determine air, food, water, and othe r environmental quality levels. bioMérieux has developed a hig hly international business, with a presence in more than 130 countrie s and a worldwide network of sales and manufacturing subsidiaries. Th e company also operates nine research and development centers through out the world. bioMérieux traces its origins to Marcel M&eacut e;rieux, who served as an assistant to Louis Pasteur. The Méri eux family remains highly involved in the company, with Alan M&eacute ;rieux serving as company chairman. The family also retains control o f more than 60 percent of shares following the company's initial publ ic offering on the Euronext Paris Stock Exchange in 2004. In that yea r, 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 diagn ostics and vaccine research almost from the sector's beginnings at th e turn of the 20th century. Marcel Mérieux served as an assist ant 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 v accines, 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. Th e use of reagents became an important element in the fight against di sease, and Institut Mérieux's reagents operations grew into an important division within the institute. Joining Marcel Mérie ux in the institute was his son, Charles, who later became the instit ute's head.

The discovery of penicillin led to the development of other antibioti cs and especially the recognition that many antibiotics were more eff ective 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 de veloping and producing new reagents and diagnostic systems led Instit ut Mérieux to spin off its reagents division into a joint vent ure with the United States' Becton, Dickinson. Created in 1963, the n ew company, known as BD Mérieux, was led by a new generation o f the Mérieux family, Alain Mérieux.

BD Mérieux's separation from Institut Mérieux took plac e toward the end of the 1960s. In 1968, Rhone Poulenc acquired a stak e in Institut Mérieux, which would have given the French pharm aceuticals giant control of 50 percent of BD Mérieux. Yet Bect on, Dickinson was not interested in continuing the joint venture with Rhone Poulenc, then controlled by the French government. Instead, th e American company asked Alain Mérieux to buy out Institut M&e acute;rieux's 50 percent of the joint venture.

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

By the late 1980s, bioMérieux had expanded onto an internation al scale. The company became one of the leaders of the in vitro diagn ostics market. Although still quite small in comparison with the in v itro 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 com pete in the increasingly global market. Through the 1990s, the compan y adopted a two-pronged approach toward growth. On the one hand, the company made a small number of acquisitions. On the other hand, the c ompany 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 importanc e, 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 develo pment of more and more strains of antibiotic-resistant bacteria. Inde ed, by the turn of the 21st century, hospitals found themselves incre asingly confronted with bacterial strains that proved resistant not o nly 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 1 980s. In 1988, the company turned to the United States, where it acqu ired VITEK Systems. That company had pioneered and become a world lea der in the development of automated bacterial testing and diagnostic systems.

Into the 2000s, bioMérieux completed two more acquisitions. Th e 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 specialis t in diagnostic and testing media for industrial applications. The ad dition of Micro Diagnostics enabled bioMérieux to expand beyon d 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 bioMéri eux purchased the diagnostics division of Akzo Nobel subsidiary Organ on Teknika. This purchase helped to boost bioMérieux's presenc e not only in the United States but on a global level. The Organon ac quisition also played a significant part in the development of bioM&e acute;rieux'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 p artnerships 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 U nited States and Affymetrix, Inc. That alliance provided for the join t development of genotyping testing procedures. In 1998, the companie s strengthened their alliance by extending it to include clinical dia gnostic tests using Affymetrix gene variation testing systems.

A new alliance came in 1999, when bioMérieux joined with Lyonn aise des Eaux in France to launch a joint research and development pr ogram in order to extend Affymetrix's GeneChip system to water testin g and management. Into the early 2000s, bioMérieux continued s igning up partnerships, notably with Celera, CEA, and Eli Lilly.

The need for scale nonetheless remained an important issue for the co mpany. 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 compa ny, specialized in the dermatological and cosmetics industries and he aded by its founder, Pierre Fabre, who enjoyed a friendship with Alai n Mérieux. Fabre's company, with revenues of nearly EUR 1.2 bi llion, was also nearly twice the size of bioMérieux. The two c ompanies touted the potential of synergies between their merged opera tions, to be named bioMérieuxPierre Fabre.

The merger quickly unraveled, however, as the purported synergies fai led to materialize. Meanwhile, Fabre and Mérieux were unable t o agree on the direction of the newly enlarged company, which reporte dly caused a deterioration in the friendship between the two men. In the end, Fabre and Mérieux chose friendship, and in 2002 the c ompanies agreed to split up again.

Instead, bioMérieux went public, listing its stock on the Euro next Paris Stock Exchange in 2004. The initial public offering proved to be one of the more successful for the year, and was oversubscribe d by some five times. The newly public company continued to seek out partnerships as well as extensions to its existing alliances. In Marc h 2005, for example, the company reached an agreement with the Chines e 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 Exo nHit Therapeutics. bioMérieux intended to remain at the forefr ont of the in vitro diagnostics market into the new century.

Principal Subsidiaries: bioMérieux Argentina; bioM&eacu te;rieux Australia; bioMérieux Austria; bioMérieux Belg ium; bioMérieux Brazil; bioMérieux Canada; bioMé rieux Chile; bioMérieux China; bioMérieux Columbia; bio Mérieux Denmark; bioMérieux Germany; bioMérieux Greece; bioMérieux Finland; bioMérieux Inc. (USA); bioM érieux India; bioMérieux Italy; bioMérieux Japan ; bioMérieux Korea; bioMérieux Mexico; bioMérieu x New Zealand; bioMérieux Norway; bioMérieux Poland; bi oMérieux Portugal; bioMérieux Russia; bioMérieux Spain; bioMérieux Sweden; bioMérieux Switzerland; bioM érieux Thailand; bioMérieux The Netherlands; bioM&eacut e;rieux B.V. (The Netherlands); bioMérieux Turkey; bioM&eacute ;rieux United Kingdom; bioMérieux West Africa.

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

Chronology

• Key Dates:
• 1897: Marcel Mérieux established Institut Mérieu x 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 P oulenc.
• 1974: Becton Dickinson becomes minority shareholder in BD M&ea cute;rieux, which changes its name to bioMérieux.
• 1987: bioMérieux acquires API Systems in the United Sta tes.
• 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 E aux in France.
• 2000: The company merges with Pierre Fabre to form bioM&eacute ;rieuxPierre Fabre.
• 2002: bioMérieux and Pierre Fabre agree to split up.
• 2004: bioMérieux goes public on the Euronext Paris Stoc k Exchange.
• 2005: The company extends alliances with Affymetrix and ExonHi t Therapeutics.