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

While overall deal volume for 2018 increased, the year was relatively light in the dramatic transactions that were so prolific in the previous two years. Here’s a quick overview of deals and predominant trends during the year.

M&A
The number of mergers and acquisitions in the molecular diagnostics and omics life science tools space rose 12% in 2018, according to research conducted by GenomeWeb. However, its research shows that the values of those deals were generally smaller than deals completed in 2017.

That’s not surprising given that the lead-up to the PAMA market-based system for lab tests had been the primary driver in the lab space over the past two years as large labs looked to acquisitions to offset the anticipated Medicare reimbursement losses. Accordingly, most of the strategic mergers and acquisitions were already completed when PAMA officially took effect on Jan. 1, 2018.

Even so, many deals were made during the year and some pretty big ones at that. The year saw the closing two deals valued in the billions, both involving the same company: Roche. By contrast, there were four nine-figure M&A deals that closed in 2017, all at higher prices than the richest deal of this year, i.e., the $2.48 billion paid by Roche for Foundation Medicine. Here are the 2018 top 10 M&A deals, including transactions that have been announced but not yet closed as of year-end:

Top 10 Lab M&A Deals of 2018

Rank Buyer Target Reported Price
1 Roche Foundation Medicine $2.48 billion
2 Roche Flatiron Health $1.98 billion
3 Illumina Pacific Biosciences $1.2 billion*
4 Thermo Fisher Scientific Gatan $925 million
5 Sonic Healthcare Aurora Diagnostic $540 million*
6 Myriad Genetics Counsyl $375 million
7 Bio-Techne Exosome Diagnostics $250 million upfront + up to $325 contingent on milestones
8 Agilent Technologies Advanced Analytical Technologies $250 million
9 Qiagen NeuMoDX $234 million*
10 Quest Oxford Immunotec Global $170 million

* Announced in 2018 with closing scheduled for 2019

Strategic Alliances
Strategic alliance activity was also more robust this year, particularly in the new molecular, AI and NGS segments. Biopharma was a major theme with numerous deals featuring collaborations between pharma and test makers to develop companion diagnostics for new drug treatments. Product integration was also a prolific pattern in alliance making.

In addition to its $1.2 billion acquisition of Pacific Biosciences, which has not yet closed, Illumina initiated a number of alliances this past year and launched an incubator for genomic startups. Past activity suggests 2019 will also be a busy year for Illumina.

Here’s a summary of key diagnostic deals from late November through December:

MERGERS, ACQUISITIONS & ASSET SALES
Acquiring Company Target(s) Deal Summary
Sonic Healthcare Aurora Diagnostic
  • Price: $540 million
  • Status: Agreement signed with no closing date announced
  • Acquisition and absorption of Florida anatomic pathology provider expands Australia-based Sonic’s US market presence
NeoGenomics Genoptix
  • Price: $125 million cash + 1 million shares of NeoGenomics common stock
  • Status: Closed
  • Acquisition boosts NeoGenomics’ position in oncology market
Strand Life Sciences Quest Diagnostics
  • Price: Undisclosed
  • Status: Closed
  • Bangalore-based Strand acquires Quest’s India diagnostics business including 3 reference labs, 45 touchpoints and leading pharmaceutical clients
Quest Diagnostics Boyce and Bynum Pathology Laboratories
  • Price: Undisclosed
  • Status: Agreement signed with no closing date announced
  • Boyce and Bynum Pathology Professional Services, Inc., target’s owner, to become exclusive pathology provider for Quest in Missouri and a preferred pathology provider in greater Midwestern region
10x Genomics Spatial Transcriptomics
  • Price: Undisclosed
  • Status: Closed
  • 10x acquires Swedish developer of two-dimensional gene expression technology for tissue sample sections
Q-State Biosciences Pairnomix
  • Price: Undisclosed
  • Status: Closed
  • Firms merge to create company focused on precision medicine and drug discovery for central nervous system diseases
LGC SeraCare Life Sciences
  • Price: Undisclosed
  • Status: Closed
  • Acquisition of quality control materials for infectious disease testing and NGS markets boosts LGC’s position in clinical quality control tools market and expands its calibration verification materials and proficiency testing offerings
Cancer Genetics NovellusDx
  • Cancellation of merger announced in Sept.
STRATEGIC ALLIANCES, PARTNERSHIPS & COLLABORATIONS
Partner 1 Partner 2 Deal Summary
LabCorp Walgreens
  • Objective: Expansion of LabCorp at Walgreens retail alliance into California Inland Empire
  • Dynamic: Open nine new LabCorp patient service centers within Walgreens stores in greater Riverside, California area by year’s end
IncellDx Zomedica
  • Objective: Identify circulating tumor cells from canine cancers
  • Dynamic: Develop assay that combines biomarkers from Zomedica’s canine cancer research programs with IncellDx’s BioINK reagents
Biocept Prognos
  • Software license and lab data supply agreement
  • Dynamic: Biocept to provide Prognos de-identified data from its liquid biopsy testing
  • Prognos to leverage its AI tools to help pharma clients ensure that patients get the right therapies
Bristol-Myers Squibb H3 Biomedicine
  • Objective: Evaluate therapeutic potential of H3’s RNA splicing platform
  • Dynamic: Joint research using H3 RNA platform to study development of cancer immunotherapies
  • Bristol-Myers responsible for development and commercialization of resulting drug candidates
  • H3 eligible for unspecified upfront payment + development, regulatory and sales milestones + royalties
Bristol-Myers Squibb Boston Medical Center
  • Objective: Identify prognostic and predictive immuno-oncology biomarkers across different cancers
  • Dynamic: Multi-year research study on tissue and circulating biomarkers and role of microbiome in predicting benefit from immune checkpoint inhibitors
Roche Merck
  • Objective: Create pan-cancer CDx test to assess if patients have mismatch repair deficiency in their tumors and are eligible to use Merck’s Keytruda checkpoint inhibitor
  • Dynamic: Immunohistochemistry-based CDx will operate on Roche BenchMark Ultra instrument
Roche Daiichi Sankyo
  • Objective: Create immunohistochemistry-based CDx for Daiichi investigational breast cancer drug
  • Dynamic: Roche to develop, manufacture and commercialize CDx for identifying HER2 low-expressing metastatic breast cancer patients for enrollment in a phase III study evaluating Daiichi’s HER2-targeting antibody drug conjugate
Guardant Health AstraZeneca
  • Objective: Develop blood-based CDx tests for AstraZeneca oncology drugs
  • Dynamic: Guardant to develop and seek FDA approval for CDx test to help identify non-small cell lung cancer patients likely to respond to AstraZeneca’s third-generation EGFR inhibitor Tagrisso
Biocartis AstraZeneca
  • Objective: Expedite lung cancer molecular diagnostics results
  • Dynamic: Conduct a European prospective lung cancer study using Biocartis’ Idylla EGFR mutation test
BiomX Janssen Research & Development
  • Objective: Discover microbiome-based biomarkers to identify responders to a Janssen inflammatory bowel disease treatment
  • Dynamic: Use BiomX’s XMarker platform to stratify responders and non-responders to undisclosed Janssen IBD treatment
Proteomics International Janssen Research & Development
  • Objective: Use Proteomics’ PromarkerD test for diabetic kidney disease in drug development
  • Dynamic: Firms to evaluate test’s effectiveness in predicting kidney function decline and drug response in patients from Janssen’s clinical trials
Centogene Chiesi
  • Objective: Identify genetic mutations that cause disease
  • Dynamic: Centogene to perform a European epidemiological study focused on prevalence of a rare lysosomal storage disorder caused by mutations in MAN2B1 gene
  • Chiesi to use its CentoCard dried blood spot collection kit to collect samples to sequence MAN2B1 gene to identify disease-causing mutations
Foundation Medicine QED Therapeutics
  • Objective: Develop CDx for QED’s drug candidate infigratinib for bile duct cancer
  • Dynamic: Infigratinib and new CDx to be incorporated into Foundation’s genomic profiling assay for all solid tumors
Qiagen Novartis
  • Objective: Develop molecular CDx to guide use of Novartis investigational PI3K inhibitor in breast cancer patients
  • Dynamic: CDx to cover DNA extraction, detection of clinically relevant mutations and final reporting and fill void in market for FDA-approved therapies targeting PIK3CA mutations in HR+/HER2- advanced breast cancer
Qiagen NeoGenomics
  • Objective: Expedite development and launch of CDx tests for pharma
  • Dynamic: Master service agreement under which Qiagen will provide investigational-use-only tests to NeoGenomics and other labs "enabling them to verify, set up and run our companion diagnostics in clinical trials and in anticipation of regulatory approval”
Sysmex MolecularMD
  • Objective: Develop CDx for precision medicine
  • Dynamic: Non-exclusive partnership leveraging the firms’ technology and global regulatory experience to accelerate CDx and drug commercialization
Sema4 Sanofi + Mount Sinai Health System
  • Objective: Asthma research
  • Dynamic: 5-year research study
Indivumed Institute of Molecular and Cell Biology (IMCB) at the Agency for Science, Technology and Research (A*STAR) in Singapore
  • Objective: Launch cancer library initiative to support development of precision diagnostics and personalized cancer treatments
  • Dynamic: Leverage Singapore’s clinical network to collect omics data to be stored in the Asian-centric Cancer Database and made available for local research
Synlab Pharma Biotype
  • Objective: Provide clinical trial service for microsatellite instability and DNA polymerase epsilon/polymerase delta 1 mutation detection for European market
  • Dynamic: Service to use using Biotype’s Modaplex technology
Shivom Lifebit
  • Objective: Launch AI-powered platform for identifying appropriate patients for clinical trials
  • Dynamic: Firms to combine their technologies to offer DNA data platform allowing users to perform immediate genome-wide association study analyses, and access proprietary software and AI tools for data analysis
GeneCentric University of North Carolina at Chapel Hill
  • Objective: Study patient responses to immunotherapeutic drugs, including PD-1 and PDL-1 inhibitors, based on bladder cancer subtypes
  • Dynamic: Researchers to investigate links between certain bladder cancer changes, disease progression and clinical response to anti-PD-1 and anti-PDL-1 checkpoint inhibitor therapy
Mobidiag Autobio Diagnostics
  • Objective: Create joint venture in China
  • Dynamic: Mobidiag to grant joint venture an exclusive license for human infectious disease assays (except for sepsis assays)
  • Joint venture to register the Mobidiag Novodiag platform and assays for meningitis, respiratory infections and gastroenteric infections, with the National Medical Products Administration (formerly called the China Food and Drug Administration)
BGI Research China National GeneBank (CNGB) + Australia’s Macquarie University
  • Objective: Establish a synthetic biology research partnership
  • Dynamic: Five-year partnership under which parties will collect genomics technologies and resources and promote their use by the research community
NIPD Genetics Medicover
  • Objective: Support NIPD Genetics’ noninvasive prenatal tests and development of new tests
  • Dynamic: Bring NIPD’s Veracity and Veragene noninvasive prenatal tests to Medicover’s network and other new markets
  • Design and develop new genetic tests in prenatal, postnatal, neonatal, oncology and other spaces
DISTRIBUTION, SALES & MARKETING AGREEMENTS
Property Owner Distributor Deal Summary
HalioDx Hyupjin
  • Products: HalioDx’s Immunoscore assay
  • Territory: South Korea
HalioDx IDB Resources
  • Products: HalioDx’s Immunoscore assay
  • Territory: Singapore, Malaysia, Thailand
HalioDx IPS Genomix
  • Products: HalioDx’s Immunoscore assay
  • Territory: Lebanon, Jordan, Saudi Arabia, UAE, Egypt, Oman, Qatar
HalioDx MicroDiagnostics
  • Products: HalioDx’s Immunoscore assay
  • Territory: Greece
HalioDx South Genetics
  • Products: HalioDx’s Immunoscore assay
  • Territory: Argentina, Chile, Uruguay
Jeta Molecular Inno-train Diagnostik
  • Products: QTRACE, Jeta’s qPCR reagent and software suite
  • Territory: US and most of Europe (excluding France)
Lucence Diagnostics iGenetic Diagnostics
  • Products: Lucence’s LiquidHallMark liquid biopsy panel
  • Territory: India
Synthego Eurofins Genomics
  • Products: Synthego’s synthetic single guide RNA (sgRNA) products
  • Territory: 44 countries
LICENSES
Licensor Licensee Deal Summary
DarwinHealth Encheng Group
  • Property: Darwin’s precision cancer medicine tests
  • Exclusive rights in Hong Kong, Macao and Taiwan
ERS Genomics Lonza Pharma & Biotech
  • Property: ERS’s CRISPR-Cas9 genome editing technology
  • Lonza licenses for use in its bioproduction products and services and in induced pluripotent stem cells for research
SUPPLY, SERVICE & TESTING AGREEMENTS
Supplier/Servicer Client/User Deal Summary
Seegene Biogroup-LCD
  • Seegene to supply $8.9 million worth of PCR-based diagnostic kits, including tests for sexually transmitted infections, women’s health and gastrointestinal infections
Primerdesign (molecular testing division of Novacyt) Genesis Diagnostics
  • Exclusive supply agreement with Primerdesign to develop and supply 384-well plate molecular assay panels, including respiratory, women’s health, sexually transmitted diseases, wound and urinary tract infections, to Genesis to use in its Pennsylvania-based clinical service lab
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