ACQUISITIONS

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

Mid-May to mid-June was the busiest period of the year for diagnostic deal making in terms of both volume and magnitude. Here is a look at the highlights.

M&A
Dollar value-wise, the biggest lab M&A deal of 2018 to date came down on June 19 when Roche announced plans to acquire the remainder of Foundation Medicine for $2.4 billion. Roche had previously acquired 57% of the Cambridge, Mass.-based genomic cancer analysis diagnostics firm via a 2015 tender offer. Under the new deal, Roche will buy the remaining shares at $137 per share in cash, a premium of:

  • 29% over Foundation’s June 18 closing price;
  • 47% over its 30-day volume weighted share price; and
  •  68% over its 90-day volume weighted average share price.

While the two firms have been close collaborators, the acquisition enables Roche to further leverage Foundation’s molecular analysis and genomic profiling assets to enhance its personalized healthcare strategy. The deal, which is expected to close before the end of 2018, is actually being treated as a merger under which Foundation will retain its autonomy.

Also making a splash was Myriad Genetics which announced its agreement to acquire women’s health molecular diagnostics firm Counsyl for $375 million in cash and common stock. Myriad plans to merge Counsyl’s reproductive health products, including the Foresight test, with its existing preventive care business to form a new unit called Myriad Women’s Health which will target OB-Gyns and reproductive healthcare providers. Myriad will also combine its women’s health sales force of approximately 225 reps with Counsyl’s 80 sales pros.

Meanwhile, Agilent Technologies remains highly aggressive in the M&A space completing its $250 million purchase of Advanced Analytical Technologies and announcing two new acquisitions: Korean scientific instruments distributor Young In Scientific and chemical standards provider Ultra Scientific, both for undisclosed amounts.

One deal that did not come off was the merger between Rosetta Genomics and Genoptix which was supposed to happen on May 27. What went wrong? On May 30, Rosetta claimed that Genoptix refused to provide the require assurances of completing the transaction due to an undisclosed “material adverse effect” affecting Rosetta, as well as breaches of representations and warranties and said it would file for bankruptcy if the deal cratered. Sure enough, the deal cratered and Rosetta filed for Chapter 7 the very next day.

Strategic Alliances
Alliance making was also dynamic during the period. Four weeks before word of the Roche merger came down, Foundation Medicine announced a new collaboration with Merck to develop companion diagnostic tests for use with Merck’s Keytruda anti-PD-1 immunotherapy drug. Meanwhile, Roche announced a pair of deals with pharmaceutical companies to develop companion diagnostics, including:

  • A new agreement to develop immunohistochemistry CDx assays for Five Prime Therapeutics’ investigational drugs and antibodies; and
  • Extension of its current CDx oncology drug development agreement with Pierre Fabre.

On May 24, Qiagen made news by announcing termination of an NGS-based assay commercialization initiative with HTG Molecular Diagnostics—the first of a larger multi-project development agreement between the two firms, which remains intact despite failure of the maiden effort. A week later, Qiagen and Freenome inked a deal to combine the latter’s AI genomics platform with the former’s molecular analysis technology to develop NGS-based immune-oncology companion diagnostics for pharmaceutical companies.

Here’s a summary of all the key diagnostic deals from mid-May through the third week in June:

MERGERS, ACQUISITIONS & ASSET SALES
Acquiring Company Target(s) Deal Summary
Roche Foundation Medicine
  • Price: $2.4 billion cash
  • Status: Expected to close in second half of 2019
  • Roche, which owns 57% of Foundation, to pay 29% premium of $137 per share to acquire remaining shares
  • Deal furthers Roche’s personalized healthcare strategy since molecular analysis and genomic profiling enable development of new cancer treatments
Agilent Technologies Advanced Analytical Technologies
  • Price: $250 million cash
  • Status: Closed
  • AA’s 109 employees to join Agilent as part of new biomolecular analysis division within Agilent’s diagnostics and genomics group
Agilent Technologies Young In Scientific
  • Price: Undisclosed
  • Status: Agreement to acquire with no closing date announced
  • Agilent acquires leading South Korea distributor of analytical and scientific instruments and long-time distributor of its own instruments and services
  • Agilent products and services in South Korea formerly sold through YI Scientific to be integrated directly into Agilent’s sales and service portfolio
Agilent Technologies Ultra Scientific
  • Price: Undisclosed
  • Status: Agreement to acquire with no announced closing date
  • Agilent acquires provider of chemical standards and certified reference materials
Laboratory Corporation of America Sciformix
  • Price: Undisclosed
  • Status: Closed
  • Sciformix, which provides pharmacovigilance and regulatory solutions for biopharm and medical device firms, to  become part of LabCorp’s Covance drug development business
Bruker Sierra Sensors
  • Price: Undisclosed
  • Status: Closed
  • Bruker acquires German developer and manufacturer of analytical biosensors based on Surface Plasmon Resonance detection
Myriad Genetics Counsyl
  • Price: $375 million cash and common stock
  • Status: No closing date announced
  • Acquisition of molecular diagnostics firm bolsters Myriad’s position in the women’s health market
CFD Research Corporation iXpressGenes
  • Price: Undisclosed
  • Status: Closed
  • CFDRC acquires iXG’s microbiome-based drug discovery division, including high-throughput antimicrobial discovery platform, EMAD (extremophilic microbiome antimicrobial discovery) and key associated personnel
Inspirata Caradigm (owned by GE Healthcare)
  • Price: Undisclosed
  • Status: Closed
  • Acquisition of healthcare analytics firm and its Caradigm Intelligence Platform enables Inspirata to step up development of its Cancer Information Data Trust platform
Rennova Health Tennessee rural hospital owned by Community Health Systems
  • Price: $1 million cash
  • Status: Closed
  • Acquisition of 85-bed hospital gets lab company which is struggling after insurers stopped covering its toxicology tests into the hospital market
PerkinElmer  Shanghai Spectrum Instruments
  • Price: Undisclosed
  • Status: Closed
  • Acquisition of analytical instruments maker in China complements PerkinElmer’s atomic spectroscopy business and position in Chinese environmental, industrial and food markets
STRATEGIC ALLIANCES, PARTNERSHIPS & COLLABORATIONS
Partner 1 Partner 2 Deal Summary
Foundation Medicine Merck
  • Objective: Develop companion diagnostic tests for use with Merck’s anti-PD-1 immunotherapy drug Keytruda
  • Dynamic: Firms to develop pan-cancer CDx to measure microsatellite instability (MSI), CDx tests for tumor mutational burden and other novel biomarkers of response
Illumina Foundation Medicine
  • Objective: Extend and expand current supply and service agreement
  • Dynamic: Illumina to supply Foundation and its German sub with sequencers, reagents and instrument maintenance and repair services
  • Foundation Medicine agrees to buy a specific amount of reagents every six months
  • Sequencers and service contract prices to be based on Illumina list prices
  • Reagents and consumables prices fixed for set time period
Illumina PerkinElmer
  • Objective: Codevelop metagenomic sequencing workflow enabling DNA extraction and sequencing from samples without need to culture the bacteria
  • Dynamic: Workflow combines Illumina’s Nextera DNA Flex library prep kit with PerkinElmer’s automation
Laboratory Corporation of America Unilabs
  • Objective: Create global network to develop and commercialize companion diagnostics
  • Dynamic: Firms to globally harmonize processes to simplify technical, regulatory and clinical complexities initially focusing on commercial availability of assays developed by LabCorp via its Covance business
Roche Five Prime Therapeutics
  • Objective: Develop immunohistochemistry companion diagnostic assays for use with Five Prime’s investigational drugs and antibodies
  • Dynamic: Develop, validate and commercialize tissue-based IHC CDx assay to identify patients who can benefit from drugs/antibodies
Roche Pierre Fabre
  • Objective: Extend companion diagnostic agreement for Fabre’s oncology drug candidate
  • Dynamic: Original deal for Roche to develop prototype assay to be used as CDx for W0101, Fabre’s antibody candidate drug targeting insulin-like growth factor 1 receptor extended to retrospective determination of IGF-1R expression in international Phase I/ II clinical study patients
Natera Institut Jules Bordet (Belgium)
  • Objective: Collaborate on breast cancer research project using Natera’s Signatera circulating tumor DNA assay
  • Dynamic: Natera to analyze roughly 300 plasma samples from 80 patients diagnosed with non-metastatic breast cancer who were treated with chemosurgery followed by surgery
  • Researchers to use Signatera to evaluate molecular response and minimal residual disease, compare assay with standard recurrence monitoring and serial imaging, and correlate Signatera with clinical outcomes
Genetic Technologies Swisstec
  • Objective: Develop service platform using blockchain technology for medical services and personalized health management
  • Dynamic: Platform to be developed via new joint venture company which will provide predictive genomic screening, radiology services, clinical consultations and procedures across multiple disciplines starting in southeast Asia
  • Each firm to own 50% of JV company
Leo Pharma FibroTx
  • Assess disease severity and monitor treatment effects in atopic dermatitis patients using non-invasive skin test technology developed by FibroTx
PreventionGenetics Inozyme Pharma
  • Objective: Launch no-cost genetic testing program to improve detection of rare calcification disorders for which Inozyme is developing treatments
  • Dynamic: Program to offer free testing to individuals with a suspect family history for mutations in ENPP1 and ABCC6 genes
Ambry Genetics Akcea Therapeutics (affiliate of Ionis Pharmaceuticals)
  • Objective: Launch new genetic testing program to provide no-cost analyses and genetic counseling to people with suspected hereditary ATTR (hATTR) amyloidosis  
  • Dynamic: Under program (called hATTR Compass), Ambry to test individuals for genes that cause hereditary polyneuropathies as well as genes associated with hereditary cardiomyopathies
  • Genetic counseling to be provided via partnership with virtual care company PWNHealth
Premaitha Health Coastal Genomics
  • Objective: Develop clinical DNA sequencing test technologies
  • Dynamic: Coastal to provide customized solution to Premaitha for use in DNA sequencing
Lucence Diagnostics Quest Laboratories (Singapore)
  • Objective: Offer cancer detection blood tests in region
  • Dynamic: Quest to provide the tests based on Lucence’s liquid biopsy technology
Genomenon Fluidigm
  • Objective: Offer evidence-based genomic panel design services for translational and clinical disease researchers
  • Dynamic: Co-marketing deal leveraging Fluidigm’s automated microfluidic systems and Genomenon’s Mastermind Panel Design Service for identifying disease-specific biomarkers
Genomenon Swift Biosciences
  • Objective: Co-market service for design and creation of targeted gene sequencing panels
  • Dynamic: Genomenon to use its automated machine learning approach and Mastermind Genomic Search Engine to identify biomarker targets associated with diseases and create list of candidate biomarkers which will then be curated based on scientific evidence from the literature
  • Swift to build and validate Accel-Amplicon Custom NGS Panels for targets in question
Zymo Research CosmosID
  • Objective: Combine firms’ respective technologies to create single microbiome analysis product
  • Dynamic: New product will fuse Zymo’s tools for sample collection/preservation, nucleic acid isolation and library preparation with CosmosID’s curated microbiome database
Thermo Fisher Scientific Evosep
  • Objective: Develop clinical proteomics workflows
  • Dynamic: Combine Thermo Fisher’s mass spec systems with Evosep’s liquid chromatography
Atomo Diagnostics Owen Mumford
  • Objective: Commercialize Atomo’s HIV tests in Europe
  • Dynamic: Owen Mumford acquires exclusive rights to Atomo’s CE-marked HIV tests and will market them in Europe under Simplitude brand
  • Agreement may be extended to include Atomo’s HIV self-test
Centogene University of Greifswald
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University of Rostock
  • Objective: Develop diagnostic tools for personalized, immune-based colon and pancreatic tumor treatments
  • Dynamic: Centogene to genetically profile cancer patients to identify immune-relevant mutations and specific biomarkers for early differential diagnosis and therapy monitoring
Centogene Aldeyra Therapeutics
  • Objective: Identify patients with Sjögren-Larsson Syndrome (SLS) in support of Aldeyra’s effort to develop a treatment
  • Dynamic: Aldeyra to get access to Centogene’s CentoMD database of clinically annotated phenotype and genotype variants of rare diseases
Centogene Orphazyme
  • Objective: Support Orphazyme’s clinical trials for treatment of neuronopathic Gaucher disease in India
  • Dynamic: Centogene to process and analyze different sample types from trial participants, including plasma, cerebrospinal fluid and dried blood spots
 Microbiotica Genentech
  • Objective: Develop biomarkers, targets and medicines for inflammatory bowel disease (IBD)
  • Dynamic: Use Microbiotica’s metagenomics microbiome platform to analyze patient samples from clinical trials of Genentech’s investigational IBD drugs to identify microbiome biomarker signatures of drug response, novel IBD drug targets and live bacterial therapeutic products
iBio Oneway Diagnostica (Brazil)
  • Objective: Develop point-of-care diagnostic tests for Brazil
  • Dynamic: iBio to provide antigen and antibody manufacturing for product prototype development, regulatory approval, commercial launch and ongoing commercialization
  • Oneway to manage Brazil marketing, distribution and sales
  • Initial focus on Zika and chikungunya
Chembio Diagnostics Bio-Manguinhos (Brazil)
  • Objective: Commercialize Chembio’s point-of-care tests for Dengue, Zika and Chikungunya infection in Brazil
  • Dynamic: Firms have been collaborating since 2016 to develop standalone and multiplex tests for viruses using Chembio’s Dual Path Platform (DPP) chromatographic immunoassay technology
Chembio Diagnostics Massachusetts General Hospital
  • Objective: Develop point-of-care diagnostic tests for patients with fever symptoms
  • Dynamic: Chembio to combine its DPP technology with biomarkers developed at Mass General to develop POC tests for typhoid and febrile illness
OncoDNA MD Anderson Cancer Center Madrid
  • Objective: Let Center oncologists use OncoDNA genomic analysis tools to diagnose and treat patients
  • Dynamic: OncoDNA also to work with Center to perform genomic studies and cancer research
Lucence Diagnostics NovogeneAIT Genomics Singapore
  • Objective: Develop NGS-based precision cancer treatment tests for Asian market
  • Dynamic: Tests will analyze cancer tissue genetics to help personalize patient treatment regimens
NanoString Technologies Cancer Therapy Evaluation Program (CTEP) of National Cancer Institute
  • Objective: Study clinical validation and utility of new immune-based gene signatures for informing cancer treatment decisions
  • Dynamic: Use NanoString’s PanCancer Immuno-Oncology 360 panel in NCI trials to characterize immune activity and develop predictive gene signatures
NeoGenomics Pharmaceutical Product Development (PPD)
  • Objective: Offer pathology and molecular testing services to pharma and biotechnology clients
  • Dynamic: NeoGenomics to provide lab testing services to support cancer clinical trial activities performed by PPD Laboratories
  • Firms to also offer PPD clients companion diagnostic development services based on PPD Preclarus data and analytics platform
2bPrecise PierianDx
  • Objective: Develop tool for point of care precision medicine decision making
  • Dynamic: Combine knowledge base from PierianDx Clinical Genomics WorkSpace platform with clinical information on cancer patients
Qiagen Freenome
  • Objective: Develop NGS-based companion diagnostics for immuno-oncology
  • Dynamic: Combine Freenome’s artificial intelligence genomics platform with Qiagen molecular analysis platforms and co-market technologies to pharmaceutical companies
Qiagen HTG Molecular Diagnostics
  • Termination of initiative to commercialize NGS-based assay
  • Initiative was the first of multi-project assay development agreement between the firms which remains intact
Adaptive Biotechnologies Sanofi
  • Objective: Assess minimal residual disease in multiple myeloma patients treated with Sanofi’s investigational anti-CD38 monoclonal antibody therapy
  • Dynamic: Use Adaptive’s immune repertoire sequencing assay ClonoSeq to do assessment
  • Adaptive to seek regulatory clearance of ClonoSeq for multiple myeloma and receive upfront and potential future milestone payments
Genomind Albertsons Companies
  • Objective: Provide free education about Genomind’s Genecept Assay for pharmacologically treating mental health issues to pharmacy patients at select Albertsons, Jewel-Osco and Acme supermarkets
  • Dynamic: Specially trained pharmacists at select locations may decide to counsel a patient who’s had unsuccessful experiences with a prescription drug for depression, anxiety, obsessive-compulsive disorder or other mental illnesses
  • Patient may also agree to have pharmacist contact treating clinician and suggest the Genecept Assay
LexaGene Stanford University School of Medicine
  • Objective: Leverage Stanford cancer sequencing technology to improve LexaGene’s microfluidic instrument
  • Dynamic: LexaGene technology involves single-use disposable microfluidic cartridges to concentrate and purify genetic samples, plus an instrument that does molecular analysis on the samples
Lunaphore Technologies Vitro
  • Objective: Develop in situ hybridization protocols for RNA and DNA targets in tissue
  • Dynamic: Use Vitro reagents on Lunaphore’s prototype microfluidics-based rapid autostaining platform
Rainbow Genomics Color
  • Objective: Offer hereditary cancer and heart health genetic risk assessment tests in Hong Kong
  • Dynamic: Rainbow to provide its genetic tests for hereditary cancers and heart health conditions
  • Color’s CLIA-certified and CAP-accredited California lab to analyze patient samples using NGS
Pro-Lab Diagnostics Medicortex Finland
  • Objective: Commercialize Medicortex’s brain injury detection kit in Canada and UK
  • Dynamic: Pro-Lab to seek regulatory approval and clinical validation of kit
  • Medicortex gives Pro-Lab exclusive rights to sell kit in Canada and UK in return for royalties
Microsoft Case Western Reserve University
  • Objective: Use quantum computing to improve diagnoses from MRI results
  • Dynamic: Focus of collaboration is magnetic resonance fingerprinting (MRF), an innovative approach to imaging data enabling faster and more accurate detection of developing diseases
Agilent Technologies University of Duisburg-Essen
  • Objective: Launch new Agilent-sponsored Teaching and Research Center for Separation
  • Dynamic: Center to use Agilent gas and liquid chromatography systems and mass spectrometry instruments to teach students and industry employees about separation science and train them in use of modern analytical equipment
Biosynth  Ramot, the Tel Aviv University Business Engagement Center
  • Objective: Develop diagnostic kits and solutions for rapid pathogenic bacteria detection for food safety, water treatment, hospital and clinical applications
  • Dynamic: Create new joint venture called Nemis Technologies to develop products using AquaSpark, a technology enabling highly sensitive chemiluminescence
Cytox Mayo Clinic
  • Objective: Develop Cytox’s polygenic risk scoring approach for diagnosis of Alzheimer’s and other neurological conditions
  • Dynamic: Cytox to test both its current, commercially available and new technology in the pipeline
  • Mayo Clinic’s Alzheimer’s Disease Research Center to provide biobank samples
Sphingotec Nexus Dx
  • Objective: Combine technologies to improve decision-making at the point of care in EDs and ICUs
  • Dynamic: Firms to market Sphingotec’s acute biomarkers penKid and bio-ADM on Nexus IB 10 immunoassay-based POC testing platform
Verge Genomics University of California, San Diego
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VIB (Belgian life sciences research institute)
  • Objective: Launch single-cell sequencing project for Parkinson’s disease
  • Dynamic: Combine VIB single-cell RNA sequencing technology, UCSD tissue samples and Verge machine learning platform to sequence genes in brain tissue from people with and without Parkinson’s
GeneNews AIM Laboratories
  • Make each firm’s tests available to the other’s customers
Genomic Vision Children’s Medical Research Institute (Australia)
  • Objective: Develop assay for research of role of telomere length on cardiovascular disease, cancer and other disorders
  • Dynamic: Use Genomic Vision’s DNA combing technology in combination with CMRI’s extensive clinical cohorts
DISTRIBUTION, SALES & MARKETING AGREEMENTS
Property Owner Distributor Deal Summary
Emosis 5-Diagnostics
  • Product: Emosis’ HIT Confirm blood-based test for confirming diagnosis of heparin-induced thrombocytopenia
  • Territories: 36 countries
MolecularMD Genoptix
  • Product: MRDx BCR-ABL companion diagnostic test to identify chronic myeloid leukemia patients taking Novartis drug Tasigna who are Philadelphia chromosome positive and thus candidates to stop treatment and start treatment-free remission monitoring
  • Territory: US
  • Genoptix exclusive provider of MRDx testing services and kits in US
Precipio Euroclone Diagnostica
  • Products: Precipio’s Ice Cold-PCR DNA enrichment products for use with liquid biopsies
  • Territory: Europe
  • Exclusive in Italy and non-exclusive in rest of Europe
Agendia Angsana Molecular & Diagnostics Laboratory
  • Products: Agendia’s MammaPrint and BluePrint breast cancer tests
  • Territory: Southeast Asia, including Brunei, Singapore, Malaysia, Vietnam and Myanmar
Sentinel Diagnostics Ortho Clinical Diagnostics
  • Product: Sentinel’s CRP Ultra (MP) wide-range C-reactive protein assay
  • Territories: North America, Europe, Africa and Middle East
PierianDx ScienceVision
  • Product: PierianDx’s Clinical Genomics Workspace platform
  • Territory: Asia-Pacific
LICENSES
Licensor Licensee Deal Summary
Philips MDxHealth
  • Property: Philips’ newly validated phosphodiesterase-4D7 prostate cancer biomarker
  • MDxHealth gets worldwide rights to market product as prognostic test
ERS Genomics NMI Natural and Medical Sciences Institute at University of Tübingen
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NMI TT Pharmaservices
  • Property: ERS Genomics’ CRISPR-Cas9 genome editing technology
  • NMI and NMI TT get right to access ERS patents for use in expanding their own custom cell-based research services
  • Non-exclusive
SUPPLY, SERVICE & TESTING AGREEMENTS
Supplier/Servicer Client/User Deal Summary
Laboratory Corporation of America
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Quest Diagnostics
UnitedHealthcare
  • Starting Jan. 1, 2019, LabCorp will no longer be exclusive national lab provider for UnitedHealthcare
  • Quest to get expanded access to UnitedHealthcare’s 48+ million members
Laboratory Corporation of America
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Quest Diagnostics
Aetna
  • Starting Jan. 1, 2019, Quest will no longer have exclusive preferred lab provider status with Aetna
  • LabCorp to become a preferred national laboratory for Aetna with expanded access to its 20+ million members
DNA Genotek Simons Foundation Autism Research Initiative
  • Renewal of multi-year agreement to supply DNA Genotek’s Oragene Dx saliva kits and GenoFIND custom collection kit packaging and order fulfillment services to Simons’ Simons Foundation Powering Autism Research for Knowledge (SPARK) project
OncoDNA Kura Oncology
  • OncoDNA to provide patient-enrollment services for Kura’s ongoing clinical study of head and neck squamous cell carcinoma (HNSCC) drug tipifarnib
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