Operon joins German rival

Two will form new synthetic DNA company

Operon Biotechnologies' entry into a joint venture with one of its rivals in the custom DNA market is expected to double its size and give it a leading position in Europe.

The Huntsville-based company will form a new company with Germany-based MWG-Biotech, which is expected to reduce pricing pressure for synthetic custom DNA and other biotech products used by researchers, said Operon managing partner Patrick Weiss.

The companies make the same product, he said, and that has driven prices down.

"Over the past 10 years overcapacity in the market has put a lot of pressure on all custom oligonucleotide synthesis service suppliers," Weiss said. "Prices have decreased to a level where very few companies are able to keep up with the level of investment and innovation needed to meet the market demand for lower cost and higher quality of products and services."

Weiss said the joint venture will allow the companies to work together on research and development and process improvements. Operon employs about 100 people in Huntsville.

"This will give the market, and in particular, (MWG) in biotechnology, pharmaceutical, food and environment industries access to improved DNA services and innovative DNA-based testing," said Bruno Poddevin, head of MWG subsidiary Eurofins Genomics Service Cluster.

The deal calls for closing MWG's operation in North Carolina and moving that production work to Huntsville. Operon's operation in Germany will close and move its work into the MWG facilities. The company's headquarters will remain in Huntsville, Weiss said, and he expects to add local employees as a result of the agreement.

The deal was about a year in the making, Weiss said, and enables Operon to reach a leading position in Europe, where MWG was its leading competitor. He said the U.S. field is more crowded with competitors, but the combined company expects annual sales between $50 million and $60 million, he said.