Accelrys CEO hints at more buyouts after VelQuest acquisition

January 5, 2012 | By Ryan McBride

Tools

As reported here Tuesday, Accelrys ($ACCL), one of the world's biggest providers of R&D software, has expanded into the quality control arena with its $35 million buyout of VelQuest. And the company's chief is talking about future M&A activity. In a chat with FierceBiotech IT on Wednesday, Accelrys CEO Max Carnecchia indicated that his company isn't ruling out additional buyouts to bolster its growth strategy.

"I don't think that [the VelQuest purchase] in any way precludes us from doing acquisitions in some of our more traditional home markets ... in life sciences," Carnecchia said in the interview. "Stay tuned."

Carnecchia spoke with us from VelQuest's offices in Hopkinton, MA, where San Diego-based Accelrys plans to keep VelQuest founder Ken Rapp and his team in place. Prior to its purchase of VelQuest, Accelrys integrated its electronic laboratory notebook (ELN) software, used in biopharma research labs, with VelQuest's software, used in quality control labs, for major pharma outfits such as AstraZeneca ($AZN), Bristol-Myers Squibb ($BMS) and Johnson & Johnson ($JNJ). The plan is to promote VelQuest's software to more of Accelrys' ELN customers in biopharma as well as those in the food and beverage and industrial chemicals sectors.

Accelrys clearly sees an opportunity in quality control (QC) and quality assurance (QA) that is similar to the more established ELN market—where paper-based processes in labs are digitized to boost efficiency and reduce human error. Right now, Carnecchia said, most biopharma QC/QA operations aren't using software like VelQuest's. And many companies are still managing the procedures that are done to, say, ensure that a drug is manufactured properly on Excel or with homegrown software that is expensive to deploy relative to an off-the-shelf application like VelQuest's SmartLab.

"It's a procedure execution platform," VelQuest founder Rapp said of his company's technology. "Down at the bench, all the labs are running standard test methods, our focus and expertise is in the quality lab space. We have hundreds of building blocks."

Carnecchia said VelQuest has had double-digit growth in recent years, but he stopped short of providing specific revenue figures. Accelrys plans to reveal more about the financial impact of the acquisition in March, he said. We'll be watching to see how the company's foray into the QA/QC arena pans out.