Qiagen, a Netherlands-based global provider of sample and assay technologies, has acquired Ingenuity Systems, a Redwood City, Calif.-based provider of software solutions to efficiently and accurately analyze and interpret the biological meaning of genomic data.

Qiagen acquired Ingenuity Systems for $105 million in cash (subject to customary purchase price adjustments). The acquisition of Ingenuity, which had 2012 net sales of approximately $20 million, was effective April 29, 2013, and funded from existing cash reserves. In 2013, Qiagen expects to report adjusted net sales (non-GAAP basis) of approximately $15 million from Ingenuity, which excludes fair value adjustments to acquired deferred revenue related to sales contracts executed by Ingenuity prior to the acquisition. The transaction is expected to be dilutive to full-year 2013 adjusted diluted EPS by approximately $0.03 per share and to 2014 adjusted diluted EPS by approximately $0.02 per share, and become accretive in 2015.

The foundation of Ingenuity's product portfolio is the Ingenuity Knowledge Base, a 14-year effort to accurately, manually curate, model and computationally structure the vast amount of biomedical literature, including genomic variations implicated in human disease and thousands of disease models. The Ingenuity Knowledge Base and software applications enable users to accurately interpret the meaning of increasingly large amounts of biological data to better guide scientific experiments and medical treatment decisions.

"The interpretation of biological information is becoming a cornerstone of Qiagen's ecosystem of sample and assay technologies for molecular testing—both in life sciences research and in diagnostics. We are establishing a leading role in this field and intend to further expand the value proposition and scope of our offering," said Peer M. Schatz , CEO of Qiagen N.V. "Ingenuity has created unparalleled leadership with its Knowledge Base and interpretation solutions to unlock the value of complex genomic and other biological information. Combining the highest-quality knowledge content with powerful search capabilities and easy-to-use interfaces, the Ingenuity suite provides customers with scientifically and clinically relevant insights into diseases.

Schatz continued, “We are looking forward to expanding the seamless integration of leading biomedical information solutions into our full range of molecular testing solutions, thereby providing our customers a unique experience from sample to interpreted result and recommendations for next steps. Integration of Ingenuity's solutions into a powerful, full-range ecosystem of Qiagen's molecular testing solutions, such as PCR and next-generation sequencing, promises to offer significant value to Qiagen customers and shareholders."

Ingenuity's Knowledge Base is built on algorithms that pair all human gene variants with biological interpretations based on known outcomes and findings. These pairings are collected and reviewed by experts in a standardized way from a wide range of sources including clinical and scientific publications with the support of advanced technology and refined processes. This process and the associated learning algorithms translate sourced data into interoperable and linkable collections of relevant information. The leadership of Ingenuity's products grows out of a long-standing commitment to ensure the highest standards, particularly in the use of expert teams, supported by the most advanced technology.

"Today we can sequence an entire human genome in just a couple of days for less than a few thousand dollars, but the data analysis can take from months to years. The Ingenuity suite of products enables this rapid and accurate interpretation in a matter of minutes, and this is fundamentally impacting scientific research and the ability to diagnose and manage patient care," said Jake Leschly, president and CEO of Ingenuity Systems. "The Ingenuity mission from day one has been to accelerate scientific discovery and enhance clinical decision-making through a rich understanding of biological systems. As part of Qiagen, we will offer our biological knowledge content and software in the context of a best-in-class ecosystem of molecular testing solutions and to a greatly expanded range of customers around the world."

Ingenuity is also developing a new product to enable broader adoption of NGS in molecular diagnostics by offering an optimized and scalable solution for interpreting and scoring clinical variants identified by sequencing-based molecular diagnostic tests. The company has been actively forming relationships with reference laboratories to bring the power of this technology to these customers, including through cloud-based applications.