BioSource to Acquire DNA Fragment Maker

BioSource International Inc., a biotech company headquartered in Camarillo, has signed an agreement to purchase a Northern California business that develops DNA fragments.

The deal, expected to be final within 60 days, calls for BioSource to acquire all the stock of Keystone Laboratories of Menlo Park in exchange for 500,000 shares of BioSource common stock, currently valued at about $1.53 million. The 500,000 shares amount to about 8.5% of BioSource’s outstanding shares.

BioSource manufactures immunological reagents for use in biomedical research. The reagents--chemicals, test kits and about 700 other products--are used to measure the amounts of certain proteins in research animals. Keystone would become a division of BioSource.

“The acquisition is going to add about $1 million to our revenue stream, roughly 12% of our revenues for the year,” said James H. Chamberlain, president, chairman and chief executive of BioSource.

BioSource, which was previously a Keystone customer, uses the DNA pieces in the manufacturing of its test kits and reagents.

Keystone manufactures DNA segments, which are portions of genes, by duplicating their components. DNA is the genetic material found in the cells of living organisms that passes on hereditary traits from one generation to another. BioSource and other biomedical researchers use the DNA to make proteins.

Chamberlain said having the DNA on hand will cut costs and speed the company’s research and development.

The transaction also positions BioSource for entry into the potentially lucrative DNA market. Chamberlain said Keystone expects to reach $1 million in sales in 1995 with minimal marketing. He said he expects those sales figures to increase quickly with the aid of BioSource’s sales and marketing staff.

“Keystone’s customers are the same as ours--people doing biomedical research. There’s about an 80% overlap,” Chamberlain said. “DNA is a basic supply for so many labs these days. It’s unbelievable. The market for DNA is about $40 million in the United States alone, $100 million worldwide.”

Chamberlain said BioSource will use its existing international distributors to market Keystone’s products around the world. About 30% of BioSource’s business is done with international buyers.

BioSource reported net income of $356,904 on revenues of $3,591,730 for the first six months of 1995, compared to a net income of $2,941 on revenues of $3,247,137 for the same period last year.