Source: Forbes.hu
“It's like the parties have known and loved each other for a long time and are now getting married.” The American Certara acquired the Hungarian cheminformatics company, Chemaxon. We'll show you what the offer was about and what is public about the deal.
Certara, a model-based drug development company based in Pennsylvania, has acquired the Hungarian Chemaxon with the aim of strengthening its drug research software portfolio - as reported by Forbes.hu. Ferenc Csizmadia, the Hungarian majority shareholder and co-founder (whom everyone calls Csizi), would like to invest in other areas, and he needed capital for this. Csizi owns 93.08 percent of the Chemaxon Kft. shares (through Metabol Group Kft.), the remaining share is owned by András Volford.
Forbes introduced the company last November (Forbes Magazin 2023/11). As we wrote in the company portrait at that time, the name Chemaxon is known by few people in Hungary, even though the cheminformatics company is part of the global elite in the pharmaceutical industry. Its software is used by 18 of the 20 leading pharmaceutical companies in the world – big guns such as Pfizer, Sanofi, AstraZeneca and Roche, among others.
Their software, called Marvin, is one of the most widely used chemical design software in the world, which gives researchers and drug developers a relatively accurate estimate of the physicochemical properties of a molecule that will be produced.
They grew into a billionaire company organically, without raising capital. Even this time, the goal was not necessarily to sell the entire company, but last year it was already felt that they did not shy away from attracting external capital. Chemaxon, which employs nearly 200 people, achieved sales of HUF 6.2 billion in 2023, just below the previous year's HUF 6.4 billion. In addition to Budapest, Chemaxon also has offices in Boston, San Diego and Basel, important centers of their target markets.
In our interview from last February, Ferenc Csizmadia (Csizi) said they had received several purchase offers, practically every day.
Chemaxon and Certara are not strangers to each other. They had been cooperating long before the acquisition negotiations started. They have been in a partnership for about ten years, so they "scanned each other" thoroughly - said Richard Jones, managing director of Chemaxon, to Forbes.hu.
For example, Certara's D360, a tool widely used by the chemical industry to help develop compounds by gathering data, has been integrated with Chemaxon's Design Hub, a tool that helps design molecules. According to the analogy of the Managing Director: “It's like the parties have known and loved each other for a long time and are now getting married.”
There were six other interested applicants in the hat, all of whom would have bought Chemaxon (the negotiations were at different stages), and of course, they accepted the most profitable offer, after more than a year of negotiation. It was also important for them that the company culture and the attitude towards the employees resonate with the new owner.
"This is a company with Hungarian founders and Hungarian owners which was literally started in the garage and has achieved serious international success under the leadership of Ferenc Csizmadia," the managing director emphasized.
Certara proposed a purchase offer of $90 million – however, the exact amount will only be determined after the transaction closes.
Chemaxon is expected to generate more than $20 million in revenue from software sales this year.
"Certara is a billion-dollar company with all the resources that allow us to achieve the goals that Chemaxon could not have achieved without this acquisition," Richard explained.
Chemaxon was launched in 1998, more than 25 years ago, and entered the market with an innovative product. They helped their pharmaceutical and chemical customers with their simple tool that is launchable from a browser by providing access to the components and data that mattered to them from anywhere. As we move into the era of artificial intelligence (AI) and machine learning, scientists and researchers can make faster and more informed decisions.
However, it is not easy or cheap to incorporate machine learning into a company, as is the case with Chemax.
"It would have taken years to build it from scratch on its own, while Certara has a separate machine learning and AI department (Certara AI), into the work of which Chemaxon will also be integrated" – explained Richard.
In a joint statement sent by the companies to Forbes.hu, William Feehery, CEO of Certara, said that the motive behind the acquisition was that it unites two businesses which complement each other and whose common mission is to reduce drug development costs and risks and to develop new drugs faster than ever before.
By implementing biosimulation and generative AI, we can improve the predictive and analytical capability of drug research – he explained.
The transaction is scheduled to close in the second half of 2024, with official approval still pending. However, in October, the company can already be part of Certara, and in addition to the integration plan, they are also working on longer-term goals, led by Richard.
As we mentioned in our article at the end of last year, Csizi continues to work on his project called Ancestralize with his wife and son. This development can diagnose exactly what the user needs for a healthy life and what health risks he or she needs to pay attention to.
With the help of molecular biologists and medical researchers, they are building a database to find the most likely diseases based on the observed symptoms, laboratory results and risk factors.