Diagnostic Deals: A Roundup of the Key Mergers, Acquisitions, Alliances, Licenses and Other Strategic Transactions From the Past Month

Based on the early returns, the market analysts that predicted 2018 would see a slowdown in strategic Dx deal making appear to be right. But while deal volume was low on both the M&A and alliance front, there were a few splashes.

M&A
February witnessed the first major new M&A deal of 2018, Roche’s announced $1.9 billion acquisition of Flatiron Health, a NYC-based oncology electronic health records. Roche Pharmaceuticals CEO Daniel O’Day called the purchase, which is scheduled to close in the first half of 2018, “an important step in our personalized healthcare strategy,” citing Flatiron’s positioning “to provide the technology and data analytics infrastructure needed not only for Roche, but for oncology research and development efforts across the entire industry.”

Qiagen and Quest Diagnostics also got on the 2018 M&A board, the former by announcing its entry into the multiplex infectious disease testing market via acquiring Barcelona-based PCR technology firm STAT-Dx for a purchase price of up to $197 million. Meanwhile, Quest boosted its mobile services capabilities by announcing plans to purchase Mobile Medical Examination Service for an undisclosed price.

One industry giant you should not expect to see a lot of on the M&A front in 2018 is Abbott, which said that it plans to spend the year absorbing the huge debts it took on as a result of last year’s spending spree including, of course, the Alere merger. But investors showed no signs of concern with Abbott’s $20 billion in long-term debt, especially after the firm announced earnings way above expected levels—both for the fourth quarter and all of 2017. While the 52% and 32% growth rates, respectively, were ballooned by the Alere deal, comparable operations-basis growth was also rock solid at 7% for Q4 and 5% for the year.

Strategic Alliances
After a furious January, alliance-making and partnership activity hit the skids this month in terms of both deal volume and value. Among the few notables:

• Quest’s agreement to offer Thermo Fisher Scientific’s non-small cell lung cancer panel via its Texas oncology center of excellence and under which Quest will have preferred access to Thermo Fisher’s Oncomine-branded clinical and biopharma technology pipeline;

• The collaboration spun out of last year’s acquisition of Ambry Genetics by Konica Minolta pitting Ambry and Konica-owned Invicro aimed at developing customized genomics and imaging services for development of new oncology drugs and biotechnology applications; and

• The partnering of Mayo Clinic with informatics firm SkylineDx designed to leverage the former’s proprietary algorithm for metastasis risk factor identification to develop new tests to guide clinical decision making for melanoma treatment.

Here’s a summary of the key diagnostic deals from late January through most of February: