Kitchener-Waterloo, Ont.’s Nicoya Lifesciences has acquired fellow biotechnology company, United Kingdom (UK)-based Applied Photophysics.
“This combined portfolio positions us to better serve the researchers in the drug development process.”
The deal, which closed in May, expands Nicoya’s drug development capabilities and global reach. Nicoya has acquired all of Applied Photophysics’ tech, intellectual property, platforms, customers, and team. The transaction brings Nicoya’s headcount to approximately 100 employees. The startup plans to turn Applied Photophysics’ UK headquarters into its European hub.
Nicoya sells advanced analytical instruments to researchers across the biotech and pharmaceutical industries. In a LinkedIn post announcing the deal, Nicoya founder and CEO Ryan Denomme described Applied Photophysics as a leader in biophysical characterization, an important tool for early drug discovery.
Denomme told BetaKit that Applied Photophysics, which is more than 50 years old, provides tools that give clients some of the data they need “to select drug candidates that have the highest chance of success in treating a disease safely and effectively.”
“Combined with Applied Photophysics, we can now enable researchers with the ability to assess function, structure, and stability—all of which are crucial elements to developing and advancing a biologic therapeutic,” Denomme said. “This combined portfolio positions us to better serve the researchers in the drug development process. Additionally, through Applied Photophysics’ footprint and customer base, the combined portfolio/companies will enable us to grow into markets beyond North America, namely the UK, Europe, and Asia.”
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Nicoya expects this transaction to double the startup’s annual revenue, triple the size of its customer base, and “provide a foundation for substantial profitability.” The company said it expects to see continued organic growth of 25 percent. Denome declined to disclose the purchase price or Nicoya’s current revenue, but did share that the acquisition triples Nicoya’s customer base to nearly 3,000.
The transaction was financed using a roughly equal combination of equity and debt from Nicoya’s existing investors, led by Graphite Ventures and debt provider SWK Holdings Corporation. Garage Capital, MaRS IAF, Laurier Startup Fund, ArchAngel, and GTAN also participated, and Agilent Technologies, WhiteCap Venture Partners, BDC Capital’s Growth & Transition Capital Team, and Export Development Canada supported, among others.
The deal comes amid an environment where biotech funding has plummeted, as United States President Donald Trump has introduced policies aimed at gutting agencies responsible for conducting, funding, and regulating drug research.
This marks Nicoya’s second acquisition to date, following its purchase of Kitchener-Waterloo’s “lab-in-a-box” platform company LSK Technologies in 2022, months after announcing a $20-million CAD extension to its $10-million January 2020 Series A round.
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Spun out of the University of Waterloo in 2012, Nicoya uses nanotechnology, microfluidics (the science of manipulating and controlling fluids), and artificial intelligence to develop products that help scientists better understand and develop treatments for diseases such as cancer, hepatitis, and Alzheimer’s.
Nicoya currently offers a suite of tools designed to analyze biomolecular interactions. The startup sells its products to researchers in academic institutions looking to understand structural biology, pharmaceutical companies that want to determine whether to advance candidates during the drug discovery and screening phase, and biotech firms seeking help with biologics characterization. The startup’s offerings include Alto, a digital proteomics solution designed to help accelerate drug discovery efforts.
Denomme said Nicoya primarily serves oncology, vaccine development, immunology, gene editing, and biologics engineering applications.
“For decades, Applied Photophysics has provided the scientific community with trusted technologies for deep biophysical insights,” Applied Photophysics CEO Tim Flanagan said in a statement. “Integrating these proven capabilities with Nicoya’s [surface plasmon resonance] platforms and their focus on user-friendly workflow automation will provide researchers with more powerful and efficient solutions to meet today’s complex drug development demands.”
Feature image courtesy Nicoya Lifesciences.