On a strategic level, this move is set to provide Delphi with the Applied Biosystems Group with more business, continuing Delphi's strategy of reaching out to different audiences. Financial terms of the arrangement were not disclosed.
Under the terms of the agreement, Delphi Medical Systems, Texas Operations has leased a facility in Stafford, Texas, previously utilised by Applied Biosystems to manufacture multiple life science instrument platforms. In addition, Delphi Medical Systems - Texas Operations will hire employees from Applied Biosystems.
"This way of outsourcing on the part of Applied Biosystems enables an uninterrupted product supply to its customer base, avoiding a learning curve normally associated with typical outsourcing initiatives where the manufacturing assets are relocated or duplicated," said Christophe Sevrain, managing director, Delphi Medical Systems.
"Employees already experienced in building these instruments will remain and continue building the products, thus lowering risks for all involved. The employees of the Delphi Medical Systems - Texas Operations have expertise in manufacturing science instruments," he added.
The Applied Biosystems Group serves the life science industry and research community by developing and marketing instrument-based systems, consumables, software, and services for use in analysing nucleic acids (DNA and RNA), small molecules.
The move is a first for Delphi, who have previously stated an interest in outsourcing other manufacturing operations. Indeed, this move additionally targets one of Delphi's targeted marketing segments - in-vitro diagnostics.
Other agreements already made by Delphi include April's licensing agreement to manufacture and market vital signs monitors using breakthrough cardiac technologies and products from Inovise Medical.
In February 2005, Delphi entered into a five-year agreement with Cardinal Health to develop and manufacture respiratory devices for Cardinal Health's Respiratory Care business.