DIAGNOSTIC DEALS

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

The past few weeks have brought snow to parts of the country that don’t usually see the white stuff, and a flurry of diagnostic deals. Although some pundits continue to speculate about a business slowdown, the outlook remains positive as winter inches toward spring.

Here’s a quick overview of the past month’s activity.

M&A
Thermo Fisher Scientific has been actively selling off its anatomical pathology business. Tokyo-based PHC Holdings (formerly known as Panasonic Healthcare Holdings) will acquire the business for $1.14 billion in cash, in order to expand its growing healthcare and diagnostic portfolio.

Meanwhile, Thermo Fisher Scientific is moving into other areas, acquiring a 9% stake in molecular diagnostics company Yourgene Health (formerly known as Premaitha Health) by exercising warrants it held in the company. Thermo Fisher could take ownership of up to 17% in Yourgene if it chooses to exercise other warrants it holds. The agreement between the companies calls for Yourgene to exclusively promote its noninvasive prenatal testing products on Thermo Fisher’s Ion Torrent next-generation sequencing systems in the Southeast Asia markets for three years.

Among deals that closed this period are the acquisition of molecular solutions company Invisible Sentinel by BioMérieux, and the acquisition of Boyce & Bynum Pathology Laboratories by Quest Diagnostics. Details for these and other M&As are provided in the chart below.

Strategic Alliances
Among new strategic alliances are several involving genetic testing, a field that continues to grow. And not all alliances are between businesses.

Horizon Discovery has entered into an exclusive strategic partnership with Rutgers University to develop and commercialize novel gene editing technology, known as base editing. The technology, which will augment Horizon’s research tools and services, potentially has applications in the development of new cell therapies. Details about this and other alliances are provided in the chart below.

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

MERGERS, ACQUISITIONS & ASSET SALES
Acquiring Company Target(s) Deal Summary
PHC Holdings Thermo Fisher Scientific’s anatomical pathology business
  • Price: $1.14 billion cash dilutive to full-year 2019 adjusted EPS of approximately $.10
  • Status: Definitive agreement with expected closing in 2Q
  • Anatomical pathology business is part of Thermo Fisher’s Specialty Diagnostics segment with $350 million in annual revenues via sales of microscope slides, instruments and consumables
  • PHC Holdings is a diagnostics, diabetes care, life sciences and healthcare IT company based in Tokyo
BioMérieux Invisible Sentinel
  • Price: Roughly $75 million to strengthen its position in food pathogen testing and
  • Status: Closed
  • Acquisition of US-based food testing firm bolsters BioMérieux’s position in food pathogen testing and spoilage organism detection
Quest Diagnostics Boyce & Bynum Pathology Laboratories
  • Price: Undisclosed
  • Status: Closed
  • Acquisition of diagnostic and clinical lab services in Midwest
  • Separate agreement makes Boyce & Bynum Pathology Professional Services the exclusive pathology provider for Quest in Missouri and a preferred pathology provider in greater Midwestern region
Beckman Coulter Life Sciences Labcyte
  • Price: Undisclosed
  • Status: Closed
  • Acquisition of privately held liquid handling firm and developer of Echo, acoustic droplet ejection technology that uses sound energy for contactless transfer of samples and reagents
Icon MolecularMD
  • Price: Undisclosed
  • Status: Closed
  • Acquisition of molecular diagnostic lab specializing in development of precision medicines in oncology
ArcherDX Baby Genes
  • Price: Undisclosed but purchase made with cash reserves
  • Status: Agreement signed but no closing date announced
  • Baby Genes to operate as wholly owned subsidiary and market its genetic carrier screening tests under name ArcherDX Clinical Services
  • Existing ArcherDX R & D functions to remain in firm’s Boulder, CO lab
  • Commercial genetic profiling services for both companies to be consolidated in Baby Genes’ Golden, CO lab
Gestalt Diagnostics Peak Medical
  • Price: Undisclosed
  • Status: Closed
  • Acquisition of lab integration services firm bolsters Gestalt’s digital pathology integrations services division
STRATEGIC ALLIANCES, PARTNERSHIPS & COLLABORATIONS
Partner 1 Partner 2 Deal Summary
Ares Genetics (subsidiary of Curetis) Qiagen
  • Objective: Develop bioinformatics products and services for antimicrobial resistance (AMR) research based on ARESdb database
  • Dynamic: Qiagen gets exclusive license for AMR product development and commercialization + non-exclusive license to develop and commercialize molecular research assays using ARESdb content with its own NGS and PCR technologies
Genspeed Virogates
  • Objective: Develop rapid point-of-care test for medical risk classification
  • Dynamic: Test designed to detect C-reactive protein, biomarker of inflammation, and suPAR, protein biomarker of inflammation and immune system activity, from finger prick within 10 minutes
Genomenon Diploid
  • Objective: Improve genome interpretation for rare disease diagnostics
  • Dynamic: Diploid to integrate Genomenon’s Mastermind genomic search engine into its Moon diagnostic software
  • Non-exclusive also covers future products
Genomica HuaSin
  • Objective: Develop fully automated HPV genotyping assay platform for China market
  • Dynamic: HuaSin gets exclusive rights to develop and produce platform using Genomica’s technology
  • HuaSin to seek China Food and Drug Administration ahead of a 2021 launch
GenomeDx Biosciences (now called Decipher Biosciences) Dendreon Pharmaceuticals
  • Objective: Identify patients likely to respond to Dendreon’s prostate cancer therapy Provenge (sipuleucel-T)
  • Dynamic: Decipher assay to be used to assess biological behavior of tumors from patients in phase III study of Provenge
  • Study also to evaluate tumor gene expression signatures potentially associated with Provenge response
AbCellera Novartis
  • Objective: Discover antibody-based drug candidates from natural immune responses
  • Dynamic: AbCellera to use its antibody discovery platform to up to 10 targets Novartis selects
  • Novartis to provide AbCellera technology access payments, research funding, downstream milestone payments and royalties on net product sales
BioMérieux Entasis Therapeutics (spinoff of AstraZeneca)
  • Objective: Develop drug to combat carbapenem-resistant A. baumannii infections
  • Dynamic: Incorporate BioFire FilmArray multiplex pneumonia panel tests into Entasis clinical trials
RenalytixAI Akesogen
  • Objective: Partnership to increase testing capacity and support pharmaceutical services
  • Dynamic: Form joint venture called Renx AI Labs to provide services directly to health systems and pharmaceutical companies in US
Fluidigm Indica Labs
  • Objective: Co-market digital pathology image analysis and management tools
  • Dynamic: Cooperative marketing of Indica’s HALO image analysis products with Fluidigm’s Hyperion imaging mass cytometry platform and related reagents and software
Xifin Glidian
  • Objective: Create platform to help labs reduce prior authorization-related denials
  • Dynamic: Integrate Glidian’s automated prior authorization capabilities with Xifin’s revenue cycle management and LIS solutions, Xifin RPM and Xifin LIS
Numares Mayo Clinical Laboratories
  • Objective: Develop tests that use nuclear magnetic resonance spectroscopy to detect cardiovascular disease, kidney disease, liver cancer and other diseases
  • Dynamic: Tests to analyze metabolic constellations, or clusters of risk factors, derived from clinical diagnostic tests performed on patient samples
  • First test expected to measure lipoproteins
OptraScan Neuberg Diagnostics
  • Objective: Bring OptraScan’s digital pathology and telepathology services to Neuberg histology network in India, Middle East and Africa
  • Dynamic: Partnership, named Neuberg Digipath, to also launch OptraScan’s Global TelePath Network in United Arab Emirates, India, and South Africa
SQI Diagnostics University Health Network
  • Objective: Develop rapid, multiplex test and companion point-of-care device for identifying lung transplant candidates
  • Dynamic: Technology to leverage predictive biomarkers developed at UHN to evaluate suitability of a lung for transplant
SeqWell Gencove
  • Objective: Develop low-pass whole-genome sequencing and genotype imputation product
  • Dynamic: Integrate SeqWell’s PlexWell multiplexed NGS library preparation technology with Gencove imputation and analysis software
Western Digital University of California, Santa Cruz
  • Objective: R&D partnership to accelerate genomic sequencing workflows with computational storage technology
  • Dynamic: UC Santa Cruz Genomics Institute and Baskin School of Engineering to use Western Digital’s storage architecture to test their theory that moving computational power closer to data storage can speed analysis of massive genomic data sets
Horizon Discovery Rutgers University
  • Objective: Commercialize gene editing technology developed in Rutgers med school lab
  • Dynamic: Horizon makes non-material payment to Rutgers for option to exclusively license base editing platform, which modifies genes by creating single point mutations in DNA without making double-stranded breaks, for use in all therapeutic applications
MRM Biodesix
  • Objective: Develop mass spectrometry-based assays for lung cancer
  • Dynamic: MRM Proteomics grants Biodesix rights to use its iMALDI technologies to develop blood-based tests for lung cancer
DISTRIBUTION, SALES & MARKETING AGREEMENTS
Property Owner Distributor Deal Summary
 Minomic Cirrus Dx
  • Products: Minomic’s MiCheck prostate cancer test
  • Territory: US
  • To be offered as LDT after internal validation studies completed
MDxHealth LifeLabs
  • Products: MDxHealth’s SelectMDx noninvasive liquid biopsy assay
  • Territory: Canada
  • Exclusive
Mawi DNA Technologies Alliance Global
  • Products: Mawi’s iSWAB biosampling technologies
  • Territory: Kuwait, Bahrain, Qatar, Yemen, Oman, UAE, Iran, Jordan, Syria, Lebanon, Iraq, Palestine, Africa, Turkey, Pakistan, Sri Lanka, Afghanistan, Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan, Turkmenistan, Azerbaijan, Thailand, Philippines, Vietnam, the Maldives, Mongolia, Singapore, Indonesia, Brunei, Myanmar, Malaysia
Sienna Cancer Diagnostics Mediwell
  • Products: Sienna’s bladder cancer diagnostic
  • Territory: Singapore
  • Non-exclusive
Natera Thermo Fisher Scientific’s One Lamda
  • Products: Natera’s cell-free DNA-based kidney transplant rejection test
  • Territory: US
Amoy Diagnostics Sanomics
  • Products: Amoy Dx’s multigene mutation detection kit
  • Territory: Hong Kong and Macau
  • Renewal of existing deal through 2025
LICENSES
Licensor Licensee Deal Summary
Broad Institute Promega
  • Property: Broad’s CRISPR-Cas9
  • Promega to combine CRISPR-Cas9 technology with its own products for knock-in of genetic reporters into genomes of any cell or cell line
  • Non-exclusive
SUPPLY, SERVICE & TESTING AGREEMENTS
Supplier/Servicer Client/User Deal Summary
Quest Diagnostics Houston Medical Center and Perry Hospital
  • Quest to provide full lab management services, lab equipment, supplies and procurement processes to the 2 hospitals
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