Biotech company carves a large niche in tools for research
MINNEAPOLIS — More than 600,000 times, researchers have cited Bio-Techne Corp. in academic papers as a manufacturer of tools that helped in their search for new tests and treatments.
The company, Minnesota’s biggest biotech company, makes tiny bits of biology plus analytical machines and kits used in academic laboratories and pharmaceutical research and development labs worldwide. Its customers are trying to solve some of the most pressing questions in life sciences, from the vagaries of gene expression to drugs for cancer, autoimmune diseases and diabetes.
Now the dawn of the age of precision medicine therapies like cancer immunotherapy holds the potential for some of the company’s most exciting and lucrative contributions to science.
Minneapolis-based Bio-Techne has gone on a bit of a tear in recent years, with revenue cresting at an all-time high of half a billion dollars last year and three analyst firms initiating coverage with optimistic outlooks since the start of 2017. An aggressive run of acquisitions and management changes since 2013 has come with new transparency and goal-setting, and analysts say the difference shows.
“We consider the company the top strategic asset in an increasingly target-poor life science tools industry,” Deutsche Bank Securities analyst Dan Leonard wrote in January, placing a “buy” rating on Bio-Techne stock with a target price of $115 a share. The stock stood just under $107 as of market close Tuesday.
Bio-Techne has produced depend- able wet-lab research tools for decades, which helps explain why so many University of Minnesota biol- ogy grads want to work there. Nearly a third of the company’s workforce has a degree from the university.
Analysts like how Bio-Techne is growing, combining well-considered acquisition targets with the company’s long-running reputation for producing top-quality raw proteins and antibodies for use in research.
In 2014, Bio-Techne paid $300 million to acquire a molecular diagnostics device company called ProteinSimple. That portfolio included a machine called Wes, which retails for about $60,000 and was the first device to automate the common — and commonly frustrating — research method called the Western Blot. The Wes requires higher-margin “consumable” Western Blot products, which are also sold by Bio-Techne.
“That’s $60,000 in revenue, but after that, in order to operate the system (users) are going to need the cartridges,” Leerink Partners analyst Puneet Souda said in an interview. “Once your installed base starts growing, that starts to drive your consumables. This is a very good consumables company, so we know they will execute well on that end. That’s something I see as a major growth driver in the future.”
Bio-Techne has set an ambitious goal of hitting $1 billion in annual revenue through a combination of internal innovation and well-curated acquisitions.
It recently launched its first entry in the veterinary products market: a test system for common pet parasites that contains the industry’s only nontoxic biodegradable chemical preservative. The company has also made moves to expand its footprint in stem cell science, striking a new co-development and licensing agreement with a small biotech startup in Connecticut called MultiClonal Therapeutics.