NEWS

Diagnostic Deals: A Roundup of February’s Mergers, Acquisitions, Alliances, Licenses and Other Major Transactions

After January’s flurry of deals, the M&A front has been relatively quiet so far this month. But relatively low volume of M&A deals has been more than offset by surges in strategic alliances and partnerships. Here’s an overview of the key deals and trends.

M&A
Dollar-wise, the biggest M&A deal so far was the closing of Grifols’s acquisition of Hologic’s blood screening business. The acquired assets include a San Diego plant, development rights and Hologic’s access to patented technologies under license agreements. In addition to the $1.85 billion purchase price, the sale enables Hologic to get out of blood screening, which Hologic CEO Steve MacMillan described as a "drag on our growth" and concentrate on its core women’s health and molecular diagnostics business.

Both sides to the deal appeared vindicated a week later when Hologic issued its 2017 first quarter results reporting a 6 percent increase in year over year revenue by 8 percent growth in molecular diagnostics (from $129.6 million to $139.9 million) and "continued strength" across Aptima women’s health products on the automated Panther and Tigris platforms. The report also made Grifols look pretty smart, especially the part citing a 7 percent rise in Hologic’s blood screening revenues for the period ($65.2 million) thanks to "Zika-related sales and strong international ordering patterns."

Other than Quest’s acquisition of northwest nonprofit PeaceHealth Laboratories’ outreach lab operations, most of the other M&A activity for the month involved smaller start-ups, foreign ventures and genomics firms.

Last but not least, there are unconfirmed reports (from Reuters) that LabCorp is in talks to acquire contract research organization Pharmaceutical Product Development for over $8 billion. However, the Reuters report adds that there are other bidders for PDP. LabCorp demonstrated its affinity for CROs when it shelled out $6 billion for Covance in 2015.

Strategic Alliances
Among the most active companies in February so far is Quest Diagnostics which in addition to the PeaceHealth Laboratories acquisition noted above, cut a deal to secure its physician clients access to Veracyte’s Affirma Gene Expression Classifier non-invasive test for diagnosing thyroid cancer [See related Veracyte story on page 11] and expanded its hospital partnership network to include New York City’s Montefiore Health System.

Thermo Fisher was also busy starting the month by expanding its year-old deal with Invivoscribe Technologies to co-develop oncology tests for its Ion PGM Dx System to include in vitro assays for the TF Applied Systems Biosystems 3500Dx Genetic Analyzer. A week later, the biotech firm announced a similar deal with Asuragen to co-develop diagnostic kits for the 3500Dx CS2 instrument. Following a busy January (See LIR, Diagnostic
Deals, Jan. 23, 2017
), Illumina stayed active announcing a new collaboration with Invivoscribe aimed at developing new in vitro diagnostic assays for the former’s MiSeqDx next generation sequencing platform for the US market.

Trend-wise, the month was notable for collaborations pairing diagnostics companies with big pharma firms to develop new drug diagnoses and treatments, such as:

  • Perthera’s collaboration with Novartis to identify breast and lung cancer patients for pharmaceutical clinical trials;
  • The collaboration between Exosome Diagnostics and Merck KgaA on oncology drug development; and
  • GenomeDx Biosciences agreement with Astella using the former’s genomic profiling tumor technology to identify patients who are candidates to use the latter’s XTANDI prostate cancer drug.
MERGERS & ACQUISITIONS
Acquiring Company Target Deal Summary
Quest Diagnostics PeaceHealth, nonprofit health system in Alaska, Wash, Ore
  • Price: Undisclosed
  • Status: To close in 2Q 2017
  • Quest acquires PeaceHealth Laboratories’ outreach laboratory services operations
  • PeaceHealth keeps 11 labs which Quest will professionally manage
Grifols Hologic, Inc.’s blood screening assets
  • Price: $1.85 billion cash gross proceeds
  • Status: Closing of deal announced in Dec.
  • G and H were partners in blood screening business with H doing R&D and manufacturing and G concentrating on commercialization
  • H leaves blood screening to concentrate on its core women’s health diagnostics and imaging business
Anatrace Molecular Dimensions
  • Price: Undisclosed
  • Status: Closed
  • Establishes Anatrace in European structural bio research market
Miragen Therapeutics Signal Genetics
  • Price: Undisclosed
  • Status: Closing of Oct. merger agreement
  • Signal absorbed into Miragen
  • Miragen assumes Signal’s Nasdaq listing under symbol "MGEN"
  • Merged entity has roughly $60 million in cash and short-term investments
Integrated DNA Technologies GeneWorks’s oligonucleotide manufacturing business
  • Price: Undisclosed
  • Status: Closed
  • Acquisition of Australian company via IDT Singapore subsidiary
  • Latest in string of deals expanding IDT presence in Asia-Pacific, including 2015 acquisition of oligonucleotide business of Singapore’s AITbiotech
Partnership between management group and pair of investment firms:

  • Ampersand Capital Partners
  • 1315 Capital
Novartis subsidiary Genoptix
  • Price: Undisclosed
  • Expected Closing Date: First quarter
  • Novartis acquired G, which provides hematology and solid tumor molecular profiling for oncologists and pathologists, in 2011 for $470 million
  • Novartis to keep G’s biopharma business, to be renamed Navigate BioPharma Services
WuXi AppTec (large Chinese CRO) HD Biosciences
  • Price: Undisclosed
  • Status: Closed
  • Shanghai-based HD provides AGM-based target validation, plate-based pharmacology and other preclinical services
  • Acquisition bolsters WX preclinical and biology services capabilities
  • HD is latest in series of WX’s strategic acquisitions which include XenoBiotic Labs and NextCODE Health
STRATEGIC ALLIANCES, PARTNERSHIPS & COLLABORATIONS
Partner 1 Partner 2 Deal Summary
Interpace Diagnostics Viatar CTC Solutions
  • Collaborate on preclinical research studies assessing indeterminate pancreatic cancer biopsies in patients with pancreatic cysts with hopes of developing Dx test(s)
Asterand Bioscience MolecularMD
  • Objective: Development of custom clinical trial assays and companion diagnostic products
  • Dynamic: MolecularMD to access Asterands’ human tissue resources to furnish latter’s biopharma clients end-to-end workflow for biomarker and cancer drug target validation
Illumina Illumina
  • Objective: Develop and commercialize in vitro diagnostic assays for Illumina’s MiSeqDx nextgeneration sequencing platform
  • Dynamic: Deal allows Invivoscribe to bring IVD assays and associated bioinformatics software through the US Food and Drug Administration for US sale and distribution
IncellDx Celsee Diagnostics
  • Research partnership to combine respective technologies for predicting patient responses to metastatic lung cancer immunotherapy
RPRD Diagnostics Children’s Minnesota
  • Objective: Enable CM to develop a pharmacogenomic testing process
  • Dynamic: CM to use RPRD’s pharmacogenomics testing platform within its cancer and blood disorder clinic and neurology/psychology practice
NeuroPointDX Ovid Therapeutics
  • Objective: Identify biomarkers for developing a treatment for Angelman syndrome
  • Dynamic: NeuroPointDX to use its metabolomics platform to analyze patient profile data from ongoing Phase II trial of OV101, a compound Ovid is developing to prevent disruption of tonic inhibition for both Angelman and fragile X in Angelman
Protagen National Cancer Institute
  • Objective: Identify and test biomarkers of patient response to cancer immunotherapy
  • Dynamic: Protagen to transfer its SeroTag platform for measuring autoantibody levels for thousands of antigens simultaneously to NCI
  • NCI to use platform to identify biomarkers predicting immunotherapy responsiveness, monitor patients receiving treatment and for early detection of immune-related adverse events
AMRI Bruker Daltonics and HighRes Biosolutions
  • Research alliance deploying mass spectrometry technology for drug discovery
  • Dynamic: AMRI to implement BD’s MALDI PharmaPulse system at its Integrated Drug Discovery Center with plans to run 100,000 samples per day using system
  • BD and HR to train and work with AMRI researchers to develop protocols for high-throughput screening in drug discovery
Exosome Diagnostics Merck KGaA
  • Objective: New drug development for oncology, etc.
  • Dynamic: Use of Exosome technology platforms for nucleic acid and protein detection from circulating exosomes
  • Exosome gives Merck access to its newly launched Shahky instrument for exosomal protein capture and quantitative analysis
Perthera Hope for Stomach Cancer
  • Perthera to provide its Precision Cancer Analysis service for molecular profiling of tumors
  • Profiling to be done by HSC staff on HSC patients at no cost to them
Perthera Novartis
  • Objective: Identify breast and lung cancer patients for clinical trials
  • Dynamic: Novartis to access roughly 1,000 cancer patients who have used Perthera’s Precision Cancer Analysis service for molecular profiling of cancers
Thermo Fisher Scientific Asuragen
  • Objective: Develop and commercialize capillary electrophoresis-based in vitro diagnostics
  • Dynamic: Asuragen to use its AmplideX PCR/CE technology to develop diagnostic kits for Thermo Fisher’s 3500 Dx Series Genetic Analyzer CS2 instrument
ThermoFisher Scientific Invivoscribe Technologies
  • Expansion of deal made a year ago to co-develop oncology tests for Ion PGM Dx System
  • Sides have now agreed to collaborate on development and commercialization of in vitro assays for Applied Biosystems 3500Dx genetic analyzer
Epinomics Stanford Univ’s Park Institute for Cancer Immunotherapy
  • Objective: Improve cancer immunotherapies via biomarkers and epigenomics tech
  • Dynamic: Stanford team to utilize biomarkers defined by Epinomics’ immune intelligence framework to improve outcomes and reduce adverse events in immunotherapy clinical trials
Guardant Health Univ. of Texas MD Anderson Cancer Center
  • Multi-year partnership
  • Objective: Establish G’s liquid biopsy tech as standard-of-care tool for guiding cancer patient treatment
  • Dynamic: G to help MD Anderson build on-site liquid biopsy centers for developing new assays using G’s cell-free DNA sequencing tech
GenomeDx Biosciences Astellas
  • Objective: Improve treatment of prostate cancer patients
  • Dynamic: Researchers to determine whether use of GDx’s technology can be used in genomic tumor profiling to identify prostate cancer patients who can benefit from XTANDI®, Astellas’s prostate cancer treatment drug
Qiagen Genomics England
  • GE to use Qiagen’s HGMD Human Gene Mutation Database for its 100,000 Genomes Project
  • Objective: Provide reporting and analysis of genomic data to scientists and clinicians at GE medical centers across UK
Royal Phillips Westchester Medical Center Health Network member Bon Secours Charity Health System
  • Value: $180 million
  • Multi-year deal under which Phillips will provide BSCHS broad range of diagnostic services and technologies as well as business consultation
  • BSCHS arrangement based on existing 15-year, $500 million Phillips-WMCHealth partnership
Tempus Univ. of Michigan
  • Objective: Find new treatment options for pancreatic cancer patients at UM’s cancer center
  • Dynamic: Tempus to furnish genomic and gene expression sequencing and analysis
  • T announced similar deal with Ohio Univ. Seidman Cancer Center last month
  • Other T academic medical center clients include Univ. of Penn. Abramson Cancer Center and Mayo Clinic
Quest Diagnostics Veracyte
  • Quest gets access to Veracyte’s Afirma Gene Expression Classifier, a lab-developed test that uses fine needle aspiration biopsies to evaluate thyroid nodules for cancer obviating need for surgery
  • Dynamic: Quest MD clients will be able to order Affirma and refer to Veracyte for genomic analysis
  • Effective Date: 2Q 2017
  • Following deal announcement, 10 BCBS plans issued positive coverage determination for Affirma
Quest Diagnostics Montefiore Health System
  • Latest in series of Quest-hospital partnerships
  • Objective: Quest to perform low complexity diagnostic lab tests freeing MHS to focus on core business
  • Dynamic: Some tests performed at Quest’s Teterboro, NJ facility; rest performed at MHS hospitals under latter’s direction
DISTRIBUTION AGREEMENTS
Property Owner Distributor Deal Summary
Premaitha Health Integrated Gulf Biosystems
  • Product: Noninvasive prenatal Iona test
  • Territory: Middle East, including United Arab Emirates, Dubai and Saudi Arabia
  • Premaitha also appointed unnamed distribution partner for Kuwait
MDNA Life Sciences BL&H
  • Product: Prostate Mitomic Test, MDNA’s PCR-based liquid biopsy prostate cancer test
  • Territory: South Korea
  • Exclusive
Globavir Biosciences Suyog Diagnostics
  • Product: PanGlob Dengue rRT-PCR kit for detecting dengue virus
  • Territory: India
  • Deal also calls for collaborating on launch of MulGlob, a multiplex test for multiple pathogens
Cynvenio Biosystems Milenia Labs
  • Product: Cynvenio’s ClearID Breast Cancer liquid biopsy test
  • Territory: Mexico
  • Exclusive
LICENSES
Licensor Licensee Deal Summary
Pathoquest Laboratoire Cerba (part of Cerba Healthcare group)
  • Product: P’s IDTTect blood-based NGS test for precision diagnosis of infectious disease
  • Territories: Exclusive France, Belgium, Luxembourg
  • LC also gets right to use test on non-exclusive basis in other designated European countries, Africa and the Middle East
  • P also gets right to introduce test directly to microbiology laboratories within specific reference hospitals
Metabolon Zhejiang Dian Diagnostics, independent Chinese medical laboratory firm
  • Product: Metabolon’s Discovery HD4 metabolomics platform
  • Dian to install Discovery HD4 in its Hangzhou lab
  • Dian to commercialize Metabolon’s metabolomics-based products and services throughout China
SUPPLY, SERVICE & TESTING AGREEMENTS
Supplier Client Deal Summary
Quest Diagnostics Harvard Pilgrim Health Care
  • HPHC physicians get access to Quest’s Data Diagnostics® point-of-care health analytics technology
Quest Diagnostics PeaceHealth, nonprofit health system in Alaska, Wash, Ore
  • As part of Quest’s deal to acquire PeaceHealth Laboratories’ outreach laboratory services operations, Quest inked contract to manage the 11 labs that PeaceHealth will keep
OraSure Technologies subsidiary DNA Genotek Chinese personal genomics firm WeGene
  • OraSure to supply its Oragene-DNA, all-in-one system for self-collection of DNA in saliva DNA to WeGene
  • WeGene to use kits for genetic testing and personalized healthcare services in East Asia
  • Earlier in week, WeGene announced that it had settled its patent-infringement and breach-of-contract disputes with Ancestry.com involving its saliva DNA collection kits
Siemens Healthineers Two hospitals in Turkey
  • 5-year agreement with estimated value of $108 million (based on patient population of 90 million)
  • Healthineers to design and run all medical labs in multiple disciplines, furnish equipment, provide maintenance and handle technical staffing
Indivumed Regeneron Pharmaceuticals
  • Indivumed to provide Regeneron tissue samples for cancer research
  • Indivumed to handle molecular data collection and furnish Regeneron associated de-identified patient information obtained via its existing collaboration with Geisinger Health System
NEW PRODUCTS
Company(ies) Product(s)
Meridian Bioscience
  • TruQuick, a menu of point-of-care tests for diagnosing tropical, infectious, sexually transmitted, respiratory, gastrointestinal, cancer and cardiac diseases
Genomenon
  • Mastermind, a software tool for gene and variant curation
Swift Biosciences
  • Accel-NGS XL Library Prep Kit for whole-genome sequencing on Pacific Biosciences instruments
Cofactor Genomics
  • Pinnacle, an RNA-based oncology assay which analyzes a patient’s individual cancer profile
Biodesix
  • Expansion of existing GeneStrat liquid biopsy test to include ROS1 and RET mutations (in addition to EGFR sensitizing, EGFR resistance, KRAS, BRAF and EML4-ALK alterations)
Sygnis
  • TrueHelix, a web-accessible bioinformatics platform for next-generation sequencing analysis services
Mawi DNA Technologies
  • iSWAB-Microbiome, a tool for collecting and stabilizing microbial content and diversity within gut, rectal, vaginal, skin, oral or soil samples
Cancer Genetics
  • Focus::HERSite, a genomic panel for hereditary breast and ovarian cancer syndrome
Takara Bio USA
  • In-Fusion Cloning Primer Design Tool that researchers can access free online to join together linear fragments of DNA in a single, 15-minute reaction
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