Cadence Design Systems provides computing technologies for communications, automotive, aerospace, and defense.The company is now bringing drug discovery into its scope with a $500 million deal Acquisition of OpenEye Scientifica private provider of simulation software for computational drug design.
OpenEye does not develop drugs, but its software is used by the pharmaceutical and biotech companies that develop it. The company’s software-as-a-service offering, Orion, provides molecular modeling and simulation capabilities. San Jose, Calif.-based Cadence said in its acquisition announcement Monday that growing demand for new drugs is driving demand for computing power capable of 3D analysis of molecular structures. The company noted that biomimicry has emerged as a key tool for providing insight into molecular interactions at the atomic level.
“Cadence’s deep computational software expertise drives further innovation in algorithms that improve the reliability, efficiency and speed of molecular simulations,” Cadence President and CEO Anirudh Devgan said in the announcement. “We look forward to welcoming such an accomplished team and are excited to accelerate innovation and increase R&D productivity in the pharmaceutical and biotech industries.”
OpenEye was founded in 1997 and is headquartered in Santa Fe, New Mexico.The company said its products are used by pharmaceutical giants including Pfizer and AstraZeneca, as well as smaller biotech companies such as black diamond therapy. Other clients include academic institutions.
Cadence describes its business strategy as “intelligent system design.” The company provides computing software to electronic systems and semiconductor customers who use it to develop their own products. Most of the company’s revenue comes from licensing its software and intellectual property. Cadence reported revenue of nearly $3 billion in 2021, an 11% increase from the previous year.exist Second Quarter 2022 Financial Results Released after the market close on Monday, Cadence reported revenue of $858 million, up 17.8% from a year earlier.
On a conference call to discuss second-quarter financial results, Devgan said that OpenEye’s qualities of interest to Cadence include the use of its software by 19 of the top 20 pharmaceutical companies, as well as a strong software go-to-market strategy — as a service offering. OpenEye will enable Cadence to reach new customers in the life sciences. But the move also pits the tech company against well-known competitors in computational drug design, such as Dassault Systèmes and Schrodinger.
The OpenEye acquisition was a cash transaction. Cadence expects to close the transaction in the third quarter of this year.
Photo: metamorworks, Getty Images
