Chembio Diagnostics Inc. has reached an agreement to purchase a German developer of test results readers for $5.5 million in cash, executives said.
The Medford-based manufacturer of rapid tests for HIV, syphilis, Zika, Ebola and other tropical diseases said it would purchase opTricon GmbH in Berlin.
The companies have collaborated since 2015 on handheld readers capable of reading the results of Chembio’s point-of-care tests that use blood and saliva samples. The readers are battery-powered.
“Long-term success in the point-of-care infectious diseases market requires innovation that extends beyond the diagnostic test to include data capture, transmission and storage,” Chembio CEO John J. Sperzel said on Monday. “The acquisition of opTricon will enable us to further advance our innovative technology development.”
He also said opTricon’s office in Berlin’s Science & Technology Park will become Chembio’s Europe office. OpTricon will continue to produce results readers for customers who don’t compete with Chembio.
In a securities filing on Monday, Chembio said it would fund the acquisition with some of the proceeds of a $25 million stock sale. The company also said it would use the proceeds to support future growth and for other general corporate purposes.
The announcement and securities filing came after Monday’s stock market close. On Tuesday, Chembio shares dropped $1.83, or nearly 19 percent, to $8.05 on the Nasdaq Stock Market. On Tuesday the stock fell 18.5 percent to $8.05. A year ago the shares traded at $6.40.
The opTricon purchase is expected to close on Oct. 31.
Chembio also said Monday the installation of robots for one of its production lines in Medford is nearly complete and the manufacture of tests will start before year end.
Sperzel said, “Manufacturing automation is an essential element of our growth strategy as we expand our commercial reach and create additional market opportunities through new product development and technology collaborations.”