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

The strategic slowdown in the diagnostics sector continues. Late February to March was relatively light in both deal volume and value, especially compared to the same period in 2017. As usual, the impetus for the activity that did occur was supplied by the molecular, genetics and innovative segments of the market.

M&A
On March 9, Danaher announced that it had inked a definitive agreement to acquire privately held genomics firm Integrated DNA Technologies (IDT). Although the price was not disclosed, sources estimate the value of the deal in the neighborhood of $1.9 billion—coincidentally, the same price as 2018's first billion- dollar deal, Roche's purchase of oncology EHR vendor Flatiron Health announced last month. The IDT acquisition comes less than two years after Danaher's $4 billion purchase of Cepheid and is the firm's biggest Life Sciences play since the acquisition of Pall for $13.8 billion in 2015.

The other M&A deals during the period were more modest in scope and size. Agilent was the most active announcing a pair of acquisitions, including:

• An agreement to purchase Iowa-based capillary electrophoresis products maker Advanced Analytical Technologies for $250 million in cash; and

• SEC 10Q filing disclosure of its decision to exercise the $105 million option to acquire the remaining shares of Lasergen, the NGS technology firm in which it already owned a 48% stake as a result of an $80 million deal in March 2016.

The other big M&A story was the deal that did not come off—at least not the way it was supposed to, namely, the merger of Rosetta Genomics and Genoptix. After the former's shareholders rejected the $10 million merger deal, the sides announced they were on to Plan B, under which Genoptix would acquire Rosetta's PersonalizeDx business for $1 million in cash and then acquire the remainder of Rosetta for another $8 million. While the deal was approved by the boards of both companies, the shareholders have yet to weigh in. Meanwhile, Rosetta granted Genoptix worldwide distribution rights to all its testing products, including the flagship Reveal assay. The granted rights are exclusive within the US and non-exclusive in all other territories.

Strategic Alliances
Quest Diagnostics was among the most active in non-M&A strategic deal making, including a new collaboration with GenomicVision to develop biomarkers for SMA (spinal muscular atrophy) genetic detection and renewal as well as the renewal and expansion of an existing agreement with Vermillion for commercialization and test servicing of the latter's OVA1 ovarian cancer test.

The infiltration (for want of a better word) of consumer high-tech firms into the diagnostics realm continued with a pair of notable deals:

• WuXi NextCode's agreement to integrate its genomic data analysis products with Google Cloud platform and research tools to develop new interoperable sequencing products; and

• A three-way collaboration among Intel, Lenovo and Diaceutics to determine the feasibility of using artificial intelligence to group patients based on diagnostic testing data.

The other notable pattern from the period were the power deals pairing diagnostics giants in strategic collaboration. Examples include:

• A product integration between Royal Phillips and Hologic aimed at providing an end-to-end, seamless diagnostic experience for breast care clinicians and patients; and

• A 10-year agreement between Qiagen and Natera to develop cell-free DNA prenatal screening tests for use on Qiagen's GeneReader NGS system.

Here's a summary of the key diagnostic deals from late February through late March: