Gradipore to acquire US plasma business

Gradipore (ASX:GDP) has agreed to acquire a plasma therapeutics business in the US for AUD$6.42 million, providing it with a source of plasma for the development of a therapeutic product using its separations technology to purify plasma components.

The deal with Atlanta-based Serologicals Corporation, which was announced in late December, is expected to be finalised by the end of the month. It includes Serologicals' 10 plasma collection centres across the US, and a central testing laboratory facility, and Gradipore plans at this point to retain the majority of the 180 employees of the business including the management team.

Gradipore's executive vice-chairman John Manusu said in a statement that the acquisition would provide Gradipore with financial stability while it pursued its therapeutic ambitions. The business is earnings positive, with annual sales of US$28 million last year. The acquisition is expected to boost Gradipore's profits by AUD$2 million.

The move will allow Gradipore, which is in the process of refocusing its business strategy following last year's restructuring of the board and senior management, to transform itself into a niche player in plasma therapeutics, said non-executive chairman Stephen Kwik.

"The important thing as far as Gradipore is concerned, is that acquiring a source of raw materials is of tremendous advantage to us," Kwik said.

Adding to the attraction, he said, is the fact that Serologicals already has FDA approved protocols in place to collect hyperimmune plasma. "That's also a tremendous asset to have," Kwik said.

Higher 2004 profit

Meanwhile, Serologicals has tipped that its 2004 earnings will increase compared to its estimated 2003 projection on higher sales of its drug research products.

The company said earnings in 2004 will increase by as much as 36 per cent to between 70 cents and 75 cents a share, while revenue will increase by as much as 22 per cent to between US$165-170 million.

Earnings per share assuming full dilution from the conversion of the company's outstanding convertible debentures is expected to range from 64 cents to 69 cents a share.

The results do not include any impact from the company's therapeutic plasma business, which is in the process of being sold to Gradipore.

Additional reporting by Reuters