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

Two-thirds of the way through the month, March has seen a relatively high volume of strategic deals but mostly of the marginal variety, particularly with regard to M&A activity.

The headline M&A deal for the month was LabCorp’s acquisition of the ownership interests of Washington-based Pathology Associates Medical Laboratories (PAML) in five joint ventures: Colorado Laboratory Services, Kentucky Laboratory Services, MountainStar Clinical Laboratories, PACLAB Network Laboratories and Tri-Cities Laboratory. Under the terms of the deal, which does not include PAML’s California joint ventures, LabCorp will furnish outreach testing and reference lab services currently provided by PAML while PAML’s joint owners, Catholic Health Initiatives and Providence Health & Services, continue to provide in-patient hospital lab services.

Strategic acquisitions by LabCorp are nothing new. After all, the diagnostic giant has been locked in something of an M&A race with rival Quest Diagnostics for several years. However, the PAML deal is a bit of a role reversal from recent practice. Acquisition of health system outreach labs has largely been Quest’s modus operandi (for example, Quest’s February acquisition of northwest nonprofit PeaceHealth Laboratories’ outreach lab operations) with LabCorp focusing instead on acquiring specialty labs to bolster the sophistication of its product lines.

Other items of March M&A news that you may have missed were a pair of revelations disclosed by PerkinElmer in its recent SEC filing regarding 2016 deals, including the fact that the company:

  • Paid $63.5 million in cash to acquire Bio Scientific;
  • Had also acquired Delta Instruments for $8.8 million.

Strategic Alliances
While M&A activity was relatively slow, strategic partnerships and alliances continued to chug along at a rapid pace. Key deals from March include:

  • The one-year extension of the collaboration between Quest and Vermillion for commercialization of the latter’s OVA 1 ovarian cancer test;
  • The strategic research partnership among Illumina, IBM Watson and Munich Leukemia Laboratory integrating IB Watson for Genomics with Illumina’s BaseSpace and tumor sequencing process to simplify genomic data interpretation;
  • Royal Phillips’s collaboration with OneLife (which includes a minority equity stake in OneLife) combining proprietary technologies to develop pregnancy and early child care diagnostics products.

Continuing recent patterns, March featured a number of strategic alliances between diagnostics firms and big pharma, such as SenzaGen’s granting AstraZeneca the right to use its GARD platform for rapid genomic allergen detection for development of a genomic test differentiating allergens from irritants for use in drug development research.

Key Coverage Determinations
Although several companies secured favorable diagnostic coverage determinations in March, the big winner was Vermillion, manufacturer of the OVA1 ovarian cancer early detection test—the test covered in the expanded commercialization agreement between Vermillion and Quest mentioned above. On March 1, Vermillion announced that Aspira Labs, the wholly-owned subsidiary that manufactures the test, had secured a major contract for OVA1 with Blue Cross Blue Shield of Michigan. Less than a week later, Aspira Labs was granted Medi-Cal (the California Medicaid program) out-of-state provider status, effectually expanding OVA1 access to 12 million new patients.

Key Product Developments
Diagnostic firms whose products achieved significant approvals in March included:

  • OncoCyte, which reported that its early lung cancer detection test achieved favorable results in a 300-patient study ahead of a planned launch for the second half of 2017;
  • Agendia, whose MammaPrint 70-gene signature test measuring risk of breast cancer recurrence received a1A label, the highest medical evidence level granted under German Association of Gynecological Oncology guidelines; and
  • Beckman Coulter Diagnostics, which announced the FDA clearance and commercial launch of its DxC 700 AU chemistry analyzer.

Here’s a graphic rundown of the key deals from March (so far):

Acquiring Company Target Deal Summary
Ampersand Capital Partners and 1315 Capital Genoptix (from Novartis)
  • Price: Undisclosed (Novartis paid $411 million for Genoptix in 2011)
  • Status: Expected to close in Q1
  • Former Prometheus Laboratories CEO Joseph Limber will be Genoptix CEO
  • Novartis to keep Genoptix’s biopharma business, which will be renamed Navigate BioPharma Services
BioreclamationIVT TransCell Science
  • Price: Undisclosed
  • Status: Expected to close in Q1
  • TransCell is a privately held CRO specializing in primary cell-based phenotypic screening assays
Laboratory Corporation of America Holdings Pathology Associates Medical Laboratories, LLC—jointly owned by Providence Health & Services and Catholic Health Initiatives
  • Price: Undisclosed
  • Status: Deal signed to be implemented in stages
  • LabCorp also acquires PAML’s interest in 5 joint ventures
  • Providence, CHI and hospital joint venture owners will continue providing in-patient hospital lab services
  • LabCorp will provide outreach testing services and reference lab services currently provided by PAML and joint ventures
Johnson & Johnson Abbott Medical Optics
  • Price: $4.33 billion
  • Status: Closing of September 2016 buyout agreement
  • Acquired portfolio of AMO ophthalmic products generates annual revenues of $1.1 billion
MedDay Pharmaceuticals Profilomic
  • Price: Undisclosed
  • Status: Closed
  • MedDay bolsters its SPECMET cerebrospinal fluid-based metabolomics research platform by acquiring Profilomic’s lab equipment, database and metabolomics and lipidomics research team
OncoDNA BioSequence
  • Price: Undisclosed
  • Status: Closed
  • OncoDNA acquires Spanish personalized cancer genomics firm that it designated 2 years ago as exclusive distributor of its clinical oncology molecular diagnostics products in Spain
  • OncoDNA to leverage BioSequence deal to expand into Portugal and Latin America
Aviva Systems Biology GenWay Biotech
  • Price: Undisclosed
  • Status: Closed
  • Acquisition advances Aviva’s strategy to become leading provider of proteomic solutions
  • GenWay has ISO13485 accreditation for development, validation and production of antibodies and proteins for use in US FDA-regulated and CE marked products
Angeon Group (private equity investment group) InstantLabs Medical Diagnostics
  • Price: Undisclosed
  • Status: Closed
  • Angeon acquires controlling equity interest
  • InstantLabs Medical Diagnostics name changed to InstantLabs
Instrumentation Laboratory (subsidiary of Werfen) Accriva Diagnostics
  • Price: Undisclosed
  • Status: Closed (end of January)
  • Acquisition of Accriva’s in vitro diagnostic blood testing at the Point-of-Care line positions IL as a market leader in hospital-based POC Hemostasis testing
  • Acquired product line spans coagulation, platelet aggregation, CO-Oximetry and incision devices
Partner 1 Partner 2 Deal Summary
Quest Diagnostics Vermillion
  • Objective: Commercialization of Vermillion’s OVA1 ovarian cancer test
  • Dynamic: 1-year extension of existing services agreement with option to renew for additional year
  • Vermillion agrees to provide Quest monthly confirmation of number of OVA1 tests performed, listing ordering Quest labs and accounting for amounts owed and payments received under agreement
  • Quest gets right to access records to verify accuracy of above information
Roche Poplar Healthcare
  • Objective: Expansion of Roche’s molecular Dx testing network
  • Dynamic: Expansion of existing deal to make Poplar a designated Roche Molecular Center of Excellence for 5 years
Weill Cornell Medicine Memorial Sloan Kettering Cancer Center
  • Objective: develop liquid biopsy tests to predict cancer spread and recurrence
  • Dynamic: Entitled the Sohn Collaborative for Liquid Biopsy at Weill Cornell Medicine, project to investigate biomarkers predicting if cancer will spread and to which organs
  • Supported by $600K grant from Sohn Conference Foundation
Metrion Biosciences Concept Life Sciences
  • Objective: Develop integrated services to support ion channel drug discovery
  • Dynamic: New services will combine Metrion’s knowhow in ion channel assay development, validation and compound screening with Concept’s chemistry and toxicology expertise
GeneNews Limited Multi-specialty physician group in Midwest (name withheld)
  • Partnership under which GeneNews to provide its BreastSentry®, ColonSentry®, earlyCDT®-Lung and Prostate Health Index products to medical group’s patients
NeoGenomics Definiens
  • Objective: Discover new cancer biomarkers
  • Dynamic: Expands existing research alliance to assays for clinical trials and clinical testing
  • Definiens to provide automated quantitative biomarker solutions to support immunohistochemistry services NeoGenomics provides to its pharma services and clinical clients
SenzaGen AstraZeneca
  • Objective: Create genomic test to differentiate respiratory allergens from irritants for use in new drug development
  • Dynamic: Use SenzaGen’s GARD platform for rapid genomic allergen detection and AstraZeneca’s inhaled substance libraries to develop a genomic signature to identify molecules causing respiratory tract irritancy
Illumina and IBM Munich Leukemia Laboratory
  • Objective: Leukemia and lymphoma treatment research
  • Dynamic: Use IBM Watson and Illumina NovaSeq platform to develop new cognitive technology platform for use in personalizing treatments
  • In January, IBM agreed to integrate Watson for Genomics with Illumina’s BaseSpace and tumor sequencing process to simplify genomic data interpretation
Illumina Analytik Jena
  • Objective: Develop and commercialize automated ultra high-throughput sample preparation system
  • Dynamic: Work together to create specially configured versions of AJ’s CyBio Felix automated liquid handling platform to enable the preparation of up to 6 reaction plates with Illumina’s Infinium XT reagents
Almac Diagnostics European Organization for the Research and Treatment of Cancer
  • Objective: Streamline patient inclusion in clinical trials of molecularly targeted treatments, and standardize NGS and gene expression analysis
  • Dynamic: Almac to create molecular profiles of EORTC cancer patient samples
Royal Philips LabPON
  • Objective: Development of new pathology database
  • Dynamic: Each side to contribute its data and knowhow to create "deep learning" algorithms that can be used to develop a state-of-the-art database that can be used to study, diagnose and treat cancer and other diseases
Royal Philips Onelife Health
  • Objective: Create pregnancy and early child care solutions
  • Dynamic: Use Onelife’s Femisphere app for guiding pregnancy and first year after birth treatment decisions as a platform
  • App complements Philips uGrow tool for capturing data from smart baby monitors and other connected devices to provide personalized feedback to new parents
  • Royal Phillips acquires minority interest in OneLife
Angsana Molecular & Diagnostics Ignyta
  • Objective: Cancer therapy research
  • Dynamic: Angsana to provide cancer screening out of its Hong Kong and Singapore labs for Phase 2 clinical trial in Asia for entrectinib, a tyrosine kinase inhibitor
  • Screening will use Angsana’s RNA-based cancer panel to detect TRK and other fusions in study subjects
Tempus Duke University
  • Objective: Find new treatment options for brain cancer
  • Dynamic: Tempus to furnish sequencing and analysis for Duke clinical study using engineered poliovirus for treating glioblastoma patients
  • Other T academic medical center research partners include Ohio Univ., Univ. of Penn. Abramson Cancer Center and Mayo Clinic
ZS Genetics Hitachi High Technologies America
  • Objective: Develop and commercialize ZS’s DNA sequencing platform
  • Dynamic: Combine ZS’s sequencing technologies with HTA’s expertise in electron microscopy
Bluejay Diagnostics Hitachi Chemical
  • Objective: Develop noninvasive, point-of-care test to detect the antibody immunoglobulin E (IgE) in tears which can be used to determine if conjunctivitis caused by allergen
  • Dynamic: Bluejay gets access and exclusive development, marketing and manufacturing rights to Hitachi’s Allerwatch device for diagnosing allergic conjunctivitis
  • Deal covers Americas and Europe—device already marketed in Japan
GenePeeks 3 Sisters Surrogacy and The Donor Solution
  • Objective: Provide preconception genetic screening to prospective parents
  • Dynamic: Donor and 3 Sisters clients get access to GenePeeks’ Virtual Progeny Analytics screening technology that uses DNA from 2 would-be parents to predict a child’s genome before conception
  • Service to be provided via GenePeeks’ CLIA-certified lab
Akesogen Emory University School of Medicine
  • Objective: Identify predictive markers for diseases more common in older people
  • Dynamic: Collaborate on Emory Healthy Aging Study to build a patient database that can be used to detect genomic markers for Alzheimer’s and other diseases
NantHealth and Allscripts Cancer Treatment Centers of America
  • Objective: Creation of Pathways, a new clinical decision support service platform for MDs
  • Dynamic: Merger of NantHealth’s Eviti clinical decision support tool and Allscripts’ Sunrise electronic health record system
Cynvenio Biosysterms Color
  • Objective: Provide combined version of each firm’s liquid biopsy and hereditary cancer tests
  • Dynamic: Combined product can be used to test breast cancer patients for alterations in 30 genes on Color’s hereditary cancer panel + somatic cancer mutations in 27 genes covered in Cynvenio’s ClearID breast cancer test
  • Cynvenio recently gave Milenia Labs exclusive rights to market ClearID in Mexico
Interpace Diagnostics Group, Inc. Viatar CTC Solutions Inc.
  • Objective: Use of liquid biopsies for early pancreatic cancer detection, prognosis and disease monitoring
  • Dynamic: Combined use of Viatar’s circulating tumor cell collection technology with Interpace’s PancraGEN™ assay for assessing indeterminate pancreatic cancer biopsies in patients with pancreatic cysts
Northwell Health NYC Health + Hospitals
  • Objective: Cut lab costs for in-network hospitals
  • Dynamic: Construct $47.7 million shared, centralized laboratory in Queens, NY
Property Owner Distributor Deal Summary
Novigenix Dr Risch Medical Laboratory
  • Product: Colox, Novigenix’s PCR-based blood test for early detection of colorectal cancer
  • Territories: parts of Switzerland and Liechtenstein
  • Unilabs holds Colox distribution rights in French Swiss market
Biodesix Progenetics
  • Products: Biodesix’s GeneStrat and VeriStrat liquid biopsy tests
  • Territory: Israel
  • Progenetics also Israeli distributor of Biocept, Trovagene and OncoDNA liquid biopsies
  • Bioyong Industries recently named distributor of VeriStrat in China
Biolog MediLoc Laborsysteme
  • Products: Biolog’s Gen III MicroPlate panel for identifying bacterial species and other cell analysis products
  • Territories: Germany and Austria
Luxcel Biosciences HD Biosciences
  • Products: Luxcel’s mitochondria assays and technologies, including respirometric screening technology assay for differentiating specific mitochondrial toxicity from non‐specific toxicity, for preclinical drug safety testing,
  • Territory: Not disclosed
  • Co-marketing and sales deal
Licensor Licensee Deal Summary
IntegraGen Laboratoire Cerba
  • Product: IG’s oncology biomarker for microRNA hsa-miR-31-3p used for predicting response to metastatic colorectal cancer treatments
  • Territories: France, Belgium, Netherlands, Luxembourg, Middle East and Africa
  • LC gets right to develop tumor expression assay based on biomarker
  • Marketing to start in Q2
Nerviano Medical Sciences Trovagene
  • Product: PCM-075, Nerviano’s investigational drug for acute myeloid leukemia
  • Territory: Global
  • Trovagene gets exclusive commercialization and development rights
  • Deal signals Trovagene’s strategic repositioning from diagnostics to therapeutics
Atlantic Cancer Research Institute BioVendor – Laboratorní Medicína
  • Product: ACRI’s Vn96 synthetic peptide for extracellular vesicle isolation
  • BioVendor, a Czech biotech, gets non-exclusive right to use Vn96 to develop in vitro diagnostics and research-use-only immunoassays
University of California, San Francisco MioDx
  • Products: Technologies for monitoring patient response to immunotherapy—one measures response to immune checkpoint inhibitor therapies, the other assesses risk of adverse events associated with immunotherapy treatments
  • Territories: Not disclosed
Supplier Client Deal Summary
Biocept Catalyst Pharmaceuticals
  • Catalyst to use Biocept’s Target Selector liquid biopsy platform to screen for early signs of small cell lung cancer in subjects of clinical trial for Firdapse, a drug used to treat rare diseases
Accumen Inc. Arizona Hospital and Healthcare Association
  • 3-year agreement making Accumen affiliated lab services partner of AzHHA
True Health Diagnostics Cigna
  • True Health made in-network provider of laboratory testing services, effective March 15
Company(ies) Product(s)
Myriad Genetics
  • US launch of EndoPredict test for early-stage breast cancer that assesses risk of cancer recurrence after surgery and identifies patients who can safely skip chemotherapy
Thermo Fisher Scientific
  • Thermo Scientific iCAP Triple-Quadrupole Inductively Coupled Plasma Mass Spectrometry (iCAP TQ ICP-MS) system
MagBio Genomics
  • cfKapture 21 kit for isolating cell-free DNA in plasma samples
  • True Advance, a new service to validate DNA samples and address other quality issues in NGS and liquid biopsy testing
Canon Biomedical
  • Added series of 21 new cystic fibrosis genotyping assays to its Novallele line
GenomOncology and med fusion
  • Expansion of med fusion’s LungSEQ and 50SEQ Plus FISH lab services to include PD-L1 expression testing
BioReference Laboratories (via its GenPath Women’s Health unit)
  • ClariTest, a noninvasive prenatal test to be performed at Illumina labs until company develops its own NIPT testing capacity
  • OncoTect iO Quantitative, a single-cell PD-L1 assay kit for research use only
Agilent Technologies
  • 6545XT AdvanceBio, a new mass spectrometry instrument for biomolecule characterization in drug development research
Agilent Technologies
  • GenetiSure Dx Postnatal Assay for cytogenetic testing
Sage Science
  • SageHLS, a platform that extracts and purifies large DNA fragments directly from bacterial and tissue cultures, blood samples or other cell sources
Courtagen Life Sciences
  • Expanded its Spotlight test menu for epilepsy, developmental delay, endocrinology, and mitochondrial disease by adding 10 new gene panels
Zymo Research
  • Discovery Series, a new generation of its DNA and RNA purification kits
Invivoscribe Technologies
  • 3 new in vitro diagnostic assays for company’s Ion PGM Dx System
  • Evercord, a service enabling expectant parents to collect, store and retrieve newborn’s cord blood and tissue in case it’s needed later for therapeutic use (to launch in Q2)
Eurofins Genomics
  • EXTREmers, DNA synthesizer platform for oligonucleotides
  • Autism Data Collection database
Horizon Discovery Group
  • HDx cell-free DNA Reference Standard in Synthetic Plasma, a tool for extracting DNA for liquid biopsy testing

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