Castle Rock firm Venaxis acquires Boulder-based BiOptix Diagnostics

BOULDER — Castle Rock biotechnology firm Venaxis Inc. (Nasdaq: APPY) has acquired Boulder-based BiOptix Diagnostics Inc. in an all-stock transaction worth roughly $2.6 million, with plans for the combined operation to be located in Boulder.

In a regulatory filing made late Tuesday, Venaxis officials said the company had acquired all of the outstanding Series 1 preferred stock of BiOptix, accounting for more than 98 percent of the outstanding voting stock of BiOptix. In exchange, the selling BiOptix shareholders received an aggregate 627,010 shares of Venaxis, representing about 14 percent of the Venaxis outstanding common stock following the transaction.

The deal closed Monday, with Venaxis shares closing that day at $4.11 each. But after closing at $4.36 Tuesday, the company’s share price was down 12.6 percent to $3.81 after news of the acquisition.

Venaxis CEO Steve Lundy, who will remain in charge of the merged firm, said by phone Wednesday afternoon that Venaxis will move to BiOptix’s Boulder office at 1775 38th St., and that all 12 BiOptix employees are expected to stay onboard with Venaxis. BiOptix CEO Rick Whitcomb will take on another senior role with the company, and Venaxis has four full-time employees who will be part of the new company.

BiOptix makes an Enhanced Surface Plasmon Resonance device that is used for the detection of molecular interactions. The device is aimed specifically at helping biotechnology researchers understand earlier in the drug-discovery process whether their target molecules are effective against the disease targeted.

The technology was developed with University of Colorado professor Dr. John “Jan” Hall, who shared the Nobel Prize for Physics in 2005.

Venaxis is a diagnostic company that had been focused on development and commercialization of a rapid blood test for appendicitis. But the company failed to gain Food and Drug Administration clearance for the test and last year began seeking out strategic alternatives. Venaxis earlier this year had announced a deal to acquire India-based Strand Life Sciences, but that deal was terminated two months later. The company has been operating in recent months basically with some cash and other assets, waiting for the right acquisition opportunity.

“The operating business we’ll be focused on is BiOptix,” Lundy said.

Lundy said no decision has been made yet on the branding for the company going forward, noting that the BiOptix branding will remain at least for the time being.

BiOptix had been in the initial stages of rolling out its first commercial project, the 404pi system, which has a list price in the neighborhood of $200,000, Lundy said in an investor conference call Wednesday morning.

Lundy said in the conference call that Venaxis officials believe BiOptix’s technology “has the potential to make significant inroads into the estimated $1 billion market for label free detection instruments and related consumables.” Lundy said Venaxis plans to aid those commercialization efforts by investing in sales and marketing, manufacturing processes and product enhancements.

On Wednesday afternoon, he said he anticipates head count in Boulder to grow.

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