Cadence Design to Buy OpenEye Scientific

Under the terms of the definitive agreement, Cadence will pay approximately $500 million in cash.

Under the terms of the definitive agreement, Cadence will pay approximately $500 million in cash.

Cadence Design Systems, Inc. announced that it has entered into a definitive agreement to acquire privately held OpenEye Scientific Software, provider of computational molecular modeling and simulation software being widely and increasingly used by pharmaceutical and biotechnology companies for drug discovery.

The addition of OpenEye’s technologies and experienced team with its scientific expertise accelerates Cadence’s Intelligent System Design strategy and expands its total addressable market (TAM), bringing Cadence’s computational software expertise to apply algorithmic, simulation and solver advances to life sciences.

Cadence continues executing its Intelligent System Design strategy and has successfully leveraged its computational software expertise to expand into the system analysis space to address the electromagnetics, thermal and computational fluid dynamics (CFD) challenges in the high-tech electronics, aerospace and defense, and automotive sectors. Cadence is now extending that computational software core competency to molecular modeling and simulation that is targeted to life sciences.

OpenEye has developed physics-based approaches and the cloud-native Orion software platform to accelerate advances in human health. The acquisition allows pharmaceutical and biotechnology companies to benefit from drug discovery solutions that combine OpenEye’s molecular modeling and simulation software solutions for drug discovery with Cadence’s algorithmic and solver expertise, large data management infrastructure, and AI/ML and cloud solutions.

“Drug discovery is an increasingly complex process that requires significant investment in research and development,” says Dr. Anirudh Devgan, president and CEO of Cadence. “The pending acquisition of OpenEye, with its scientifically tested methodologies and expertise, accelerates Cadence’s Intelligent System Design strategy with our entry into a new system domain of life sciences. Cadence’s deep computational software expertise drives further innovation in algorithms that enhance the reliability, efficiency and speed of molecular simulations.”

“We founded OpenEye to stretch the boundaries of what’s possible in computational drug discovery,” says Dr. Anthony Nicholls, CEO of OpenEye Scientific. “Our 3D search technology, programming toolkits, and more recently, our cloud platform, Orion, have led the industry for more than 25 years, and this opportunity to join with Cadence to pursue even greater scale and accuracy is simply amazing. We foresee a time when pharmaceutical design, no matter the modality, is predominantly computational. The realization of that goal with our skills and Cadence’s resources and expertise is going to have a profound impact on human health.”

Under the terms of the definitive agreement, Cadence will pay approximately $500 million in cash. The acquisition is expected to contribute immaterial revenue this year and about $40 million in fiscal 2023. It is expected to close in the third quarter of 2022, subject to completion of Hart-Scott-Rodino regulatory review and customary closing conditions.

Sources: Press materials received from the company and additional information gleaned from the company’s website.

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