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Applied DNA buys Vandalia Research assets for $1.5 million

During a news conference on April 10, 2015,

During a news conference on April 10, 2015, at the Huntington Opportunity Resource Center in Huntington Station, Applied DNA Sciences CEO James Hayward shines UV light on his watch which he marked using one of his company's DNA marking kits. Credit: Barry Sloan

Applied DNA Sciences Inc., a Stony Brook biotech that makes anti-counterfeiting products using plant DNA, has acquired the assets of a private out-of-state, large-scale DNA producer for $1.5 million in cash.

Vandalia Research Inc., a spinoff of Marshall University in Huntington, West Virginia, closed on a deal Friday to sell its physical and intellectual assets to Applied DNA, including 10 patented Triathlon machines capable of manufacturing billions of strands of DNA for use by researchers in the pharmaceutical industry.

"By combining them with us we have, without doubt in our opinion, the largest capacity to manufacture DNA on the planet," Applied DNA president and CEO James A. Hayward said in an interview. In addition to the equipment, the company gets Vandalia's patents and its portfolio of customers, Hayward said.

Applied DNA currently has the capacity to make large amounts of plant DNA for use in its security and authentication DNA products. The acquisition gives the company the ability to add another stream of revenue by selling DNA for nonsecurity purposes, with the potential to open up sales of its security services to pharmaceutical companies who want protection from counterfeit drugs.

Vandalia's four employees -- including its chief executive, Derek Gregg -- will serve as consultants through the rest of the year as Applied DNA moves the equipment to Long Island. Vandalia, which manufactured DNA sequences for researchers in the gene therapy, vaccine and pharmaceutical industry, posted $728,000 in revenue last year, and $2.5 million during its best year in business, Hayward said.

"We believe we can build the sales," Hayward said. "We already know those industries incredibly well."

Shares of Applied DNA fell 2 cents Tuesday to close at $4.87 on the Nasdaq Stock Market, and are up $1.98 year to date.

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