Axis-Shield spends $10m to protect diagnostics patents

The Dundee-based firm expects the acquisition from Washington State-based Catch to add to its profits from 2012.

Catch makes chemicals used to detect "homocysteine", a substance found in the blood that can be an early indicator that a patient is at risk from heart, lung or brain diseases.

Axis-Shield already sells some of Catch's chemicals and said the deal would allow it to extend its product range into the clinical chemistry market.

The takeover will also help the Scots firm to protect its patents for homocysteine tests, the company said.

Ian Gilham, Axis-Shield's chief executive, said: "The acquisition reinforces Axis-Shield's leading position in homocysteine testing and, importantly, strengthens the patent protection of this important marker until 2019.

"We remain focused on the further growth of sales of homocysteine as the market moves in favour of the more convenient clinical chemistry format."

The deal builds on an existing cross-licensing agreement signed with Catch in 2004. The agreement was signed after Axis-Shield had accused the US company of infringing its patents but the case was settled out of court.

Dr Mike Mitchell, a healthcare analyst at Seymour Pierce, said: "The rationale (for the deal], ultimately, is about market share capture - on that basis, time will tell as to the success of the deal, but the positioning of the business means we would not expect integration to be problematic.

"Axis-Shield anticipates the opportunity to 'significantly improve' product margins for Catch reagents - for the year ending 31 December, profits attributable to the assets being acquired were about $100,000."

Mitchell noted that the deal would be financed by a new five-year $10m loan facility.