DIAGNOSTIC DEALS

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

Big picture-wise, health care industry mergers and acquisitions during the second quarter were up 7.3% from the first quarter and topped 250 deals for the eighth quarter in a row, according to PricewaterhouseCoopers. Deal value was also up 10.3%. Diagnostic deal making during the quarter was largely consistent with that pattern. Here are the highlights of a busy month spanning late July to late August.

Mergers & Acquisitions and Asset Sales

The predominant trend in diagnostics M&A in 2019 has been an increase in the number of deals and a decrease in their size. But arguably the biggest deal of the year came down on July 30 when Exact Sciences announced that it inked an agreement to acquire fellow cancer technologies firm Genomic Health for $2.8 billion in cash and stock.

What makes the acquisition stunning isn’t the price tag but the participants. The deal brings together three of the most dynamic products in the genomics cancer testing market: Exact’s Cologuard stool test for colorectal cancer and Genomic Health’s OncotypeDX tests for breast and prostate cancer. Collectively, these three products represent approximately 40% of all solid tumor incidence. Exact’s Chairman and CEO Kevin Conroy touted the deal as “a pivotal step toward building the leading cancer diagnostics company in the world.” And he may not be exaggerating. If the deal gets regulatory approval and closes by the end of the year as expected, the combined company is forecasted to generate $1.6 billion in pro forma revenue in 2020.   

Strategic Alliances

After a big July, the number of strategic alliances this month tailed off significantly. Key deals that were announced included a new three-year collaboration among Thermo Fisher Scientific, the Ontario Institute for Cancer Research and Genome Canada for the development of a trio of NGS-based assays for pancreatic, prostate and breast cancer detection and targeted treatment.

Meanwhile, two more firms took the plunge into the China market. On Aug. 20, Vancouver-based Enlighta announced that it was partnering with Chinese bioinformatics firm LHHC to market No Cancer, an AI-based blood test system for early cancer detection in China and other parts of Asia. That same day, Genomenon said it was exporting its Mastermind genomic search engine to China via a new partnership with Shanghai Shanyi Biological Technology Co.

Back on the home front, Abbott and St. Louis-based Intoximeters unveiled their agreement to co-market their respective drug and alcohol testing technologies to law enforcement for use in cracking down on intoxicated drivers. The featured products include Abbott’s SoToxa Mobile Test System, an oral fluid testing tool enabling rapid roadside detection of marijuana, cocaine, opiates, methadone, amphetamine and benzodiazepines, and Intoximeters’ Alco-Sensor brand breath alcohol-tests. 

Here’s a summary of key diagnostic deals announced from late July through the third week of August:

MERGERS, ACQUISITIONS & ASSET SALES
Acquiring Company Target(s) Deal Summary
Exact Sciences Genomic Health
  • Price: $2.8 billion in cash and stock
  • Status: Expected to close by end of 2019
  • Genomic Health common shareholders to get per share price of $27.50 in cash and $44.50 in shares of Exact stock, subject to 10% collar based on Exact’s volume-weighted average price for 45 trading days ending July 26
  • Create cancer DX megafirm that unites Exact’s Cologuard with Genomic Health’s Oncotype DX
Thermo Fisher Scientific HighChem
  • Price: $14 million
  • Status: Closed
  • Thermo Fisher acquires Slovakia-based mass spectrometry software provider
Siemens Healthineers Minicare
  • Price: Undisclosed
  • Status: Closed
  • Acquisition of Dutch developer of handheld technology for immunoassay testing at the point of care
GeneCentric Therapeutics Select ImmunoGenomics
  • Price: Undisclosed
  • Status: Closed
  • Acquisition of advanced immunogenomic, data analysis, and biomarker development services provider to support immuno-oncology drugs development
Salveo Diagnostics ImmunArray
+
Nudge
  • Price: $50 million–$15 million cash + $35 million common stock  
  • Status: Closed
  • 3-way merger of chronic disease testing firm (Salveo), autoimmune diagnostics firm (ImmunArray) and personalized health coaching engagement platform (Nudge)
MilliporeSigma BSSN Software
  • Price: Undisclosed
  • Status: Closed
  • Acquisition of lab informatics company based in Darmstadt, Germany
LineaRx (subsidiary of Applied DNA Sciences) Vitatex
  • Price: Upfront payment of $300,000 worth of LineaRx equity at valuation of $25 million valuation + milestone payments of up to $200,000 cash + $800,000 in stock
  • Status: Closed
  • LineaRx acquires assets + intellectual property of developer of invasive circulating tumor cell (iCTC) analysis technologies
Eurofins Genomics Blue Heron Biotech
  • Price: Undisclosed
  • Status: Closed
  • Acquisition of firm specializing in gene synthesis and DNA design
Cellink Cytena
  • Price: €30.3 million ($33.8 million), including €11.4 million in cash + 674,678 newly issued shares valued at €18.9 million
  • Status: No closing date announced    
  • Acquisition of German developer of printer technology for isolating and dispensing single cells for genomics research and biopharma production
  • Cytena to keep its current management team after closing
Precision for Medicine ProMedDx
+
GLAS
  • Price: Undisclosed
  • Status: Closed
  • Acquisition of ProMedDx, which specializes in biofluid specimens, + GLAS, which specializes in tissue-based samples, expands Precision’s biomarker services offerings
Caprion Biosciences  HistoGeneX
  • Price: Undisclosed
  • Status: No closing date announced
  • Merger creating a new firm offering immune monitoring and biomarker services to biopharma companies
Progentec Diagnostics Karate Health
  • Price: Undisclosed
  • Status: Closed
  • Merger creating new firm operating under the Progentec name offering testing and digital technologies for diagnosing and managing lupus, multiple sclerosis and other autoimmune diseases
NEC OncoImmunity
  • Price: Undisclosed
  • Status: Closed
  • Acquisition of Norwegian bioinformatics firm and developer of ImmuneProfiler personalized cancer medicine platform
Cambridge Pathology Novacyt
  • Price: £400,000 ($499,000)
  • Status: Closed
  • Novacyt sells off its clinical lab business to focus on sale allows to focus on its core Primerdesign and Lab21 businesses
LifeSpan BioSciences Everest Biotech
  • Price: Undisclosed
  • Status: Closed
  • Acquisition of firm specializing in production of antigen affinity purified goat polyclonal antibodies expands LSBio’s monoclonal and polyclonal primary antibodies offerings
STRATEGIC ALLIANCES, PARTNERSHIPS & COLLABORATIONS
Partner 1 Partner(s) 2+ Deal Summary
Enlighta  LHHC Medical Technology
  • Objective: Sell No Cancer AI-based blood test system for early cancer detection in Asia
  • Dynamic: LHHC to establish testing + blood collection sites in China and other Asian markets
  • Companies to also launch direct-to-consumer electronic network for customers to upload and access their No Cancer data
Genomenon Shanghai Shanyi Biological Technology Co.
  • Objective: Make Genomenon’s Mastermind genomic search engine to available to labs in China
  • Dynamic: Genomenon forms partnership with Chinese provider of sequencing interpretation, variant validation + other molecular tech services
Genomind  NeuroFlow
  • Objective: Deliver services related to care of depression, anxiety, PTSD, substance abuse + other mental health disorders
  • Dynamic: Combine NeuroFlow’s IntegrateHealth platform with Genomind’s Professional PGx Express genetic testing service to enable physicians to use the former to administer the latter and communicate test results to patients
Abbott Laboratories Intoximeters  
  • Objective: Market Abbott’s SoToxa Mobile Test System oral fluid drug test kit to law enforcement for use in cracking down on intoxicated drivers
  • Dynamic: Intoximeters to market SoToxa alongside its own Alco-Sensor brand breath alcohol-testing products
Thermo Fisher Scientific Genome Canada
+
Ontario Institute for Cancer Research
  • Objective: Develop targeted NGS-based assays + analysis software
  • Dynamic: 3-year, $4.5 million collaboration to develop one assay for rapid diagnosis of pancreatic cancer + two for targeted treatments of prostate + breast cancer
NanoString Technologies Mayo Clinic Laboratories
  • Objective: Develop high-risk breast cancer + leukemia tests
  • Dynamic: Perform cross-site study using NanoString’s GeoMx Digital Spatial Profiler + nCounter technologies to investigate the immune architecture of high-risk hormone receptor positive HER2-negative breast tumor samples
  • Do second study evaluating if use of nCounter fusion assays is scalable + cost-effective alternative to conventional leukemia FISH testing
Xylonix BioGemex
  • Objective: Develop predictive cancer immunotherapy treatment response diagnostic
  • Dynamic: Jointly develop XDX-01, a pretreatment point-of-care diagnostic to predict patient reaction to T-cell mediated cancer immunotherapies in solid tumors
  • Assay to be cartridge-based modular system scaled with Xylonix’s XDX-01 serum biomarker
Q-State Biosciences 2bPrecise (unit of Allscripts Healthcare Solutions)
  • Objective: Create clinical-genomic datasets to support precision medicine
  • Dynamic: 2bPrecise to contribute its cloud-based technology platform for integrating genomic data into clinical workflows
  • Q-State to supply whole-genome + whole-exome sequencing, transcriptomics analysis + phenotyping services
Mission Bio Onconova
  • Objective: Do clinical trials using Mission Bio’s Tapestri platform for targeted single-cell DNA analysis to study Onconova’s cancer therapy
  • Dynamic: Onconova to use Tapestri platform in phase  III clinical trial examining rigosertib, a small molecule mimetic firm is developing to target RAS mutation in myelodysplastic syndromes (MDS)
Expedeon Sona Nanotech
  • Objective: Develop multiplex point-of-care lateral flow diagnostic tests
  • Dynamic: Expedeon to provide gold nanoparticles, bioconjugation technologies and expertise; Sona to provide lateral flow assay development services
Sophia Genetics ADC Therapeutics
  • Objective: Identify genomic markers associated with clinical response to ADC’s experimental lymphoma drug
  • Dynamic: Sophia to conduct somatic mutation analysis on genes in cell-free DNA samples from the blood of refractory diffuse large B-cell lymphoma patients participating in ADC’s Phase II clinical trial for experimental drug ADCT-402, loncastuximab tesirine
  • Sophia to use its informatics platform to match genomic markers with clinical response to treatment
Predictive Laboratories (subsidiary of Predictive Technology Group) Preeclampsia Foundation
  • Objective: Study genetic factors associated with preeclampsia
  • Dynamic: Conduct sequencing analysis study to grow Foundation’s Preeclampsia Registry + generate data that Predictive will use to develop a proprietary test for early detection of women at risk for preeclampsia
Biodesix Immodulon Therapeutics
  • Objective: Identify proteomic markers linked to pancreatic cancer
  • Dynamic: Use Biodesix’s Diagnostic Cortex biomarker discovery platform to analyze circulating proteome of advanced pancreatic cancer patients treated with Immodulon’s IMM-101 candidate immunotherapy
Syapse Pfizer
  • Objective: Improve precision oncology treatment + research
  • Dynamic: Collect real-world data on molecular testing patterns and therapy choices made by physicians for cancer patients within the healthcare system
DISTRIBUTION, SALES & MARKETING AGREEMENTS
Property Owner Distributor Deal Summary
 Verax Biomedical Fisher Healthcare
  • Products: Verax’s Platelet PGD Test
  • Territory: US
  • Exclusive
T2 Biosystems  Undisclosed
  • Products: T2’s rapid diagnostic technologies, including T2Bacteria + T2Candida Panels
  • Territory: Australia, Fiji, New Zealand
  • Exclusive
  • T2 also announced that it has made 5 other exclusive distribution deals in 2019 covering Estonia, Greece, Ireland, Saudi Arabia, South Africa
IncellDx Kindstar Global
  • Products: 3 IncellDx single-cell immuno-oncology tests, including OncoTect iO Tumor Treatment Profile, OncoTect iO Bladder + OncoBreast
  • Territory: China
  • Exclusive
Curetis Ako Med
  • Products: Curetis’ Unyvero A50 instrument system + test cartridges antigens, antibodies + immunoassays
  • Territory: Serbia, North Macedonia, Bosnia and Herzegovina, Montenegro
  • Two separate 3-year exclusive agreements
Patia GX Sciences
  • Products: Patia’s DiabetesPredict type 2 diabetes risk test
  • Territory: US
  • GX agrees to acquire a minimum of 25,000 tests from Patia until 2021 for a minimum of €1.2 million ($1.3 million)
NanoCellect Biomedical Millennium Science
  • Products: NanoCellect’s Wolf Cell Sorter, N1 single-cell plate dispenser, consumables + software
  • Territory: Australia + New Zealand
  • Exclusive
LICENSES
Licensor Licensee Deal Summary
The Broad Institute MilliporeSigma
  • New licensing framework covering CRISPR genome editing intellectual property under each side’s respective control
  • Broad to now offer licenses to its own and MilliporeSigma’s CRISPR IP portfolio to potential licensees for internal research uses and commercial research tools and kits
  • MilliporeSigma’s IP for CRISPR technology now available royalty-free to non-profit academic institutions, non-profit business communities and governmental agencies for internal research
SUPPLY, SERVICE & TESTING AGREEMENTS
Supplier/Servicer Client/User Deal Summary
Uman Diagnostics (Quanterix subsidiary) Bio-Techne
  • Supply antibodies to Bio-Techne for use on its Ella immunoassay platform for quantification of neurofilament light (Nf-L)
Beacon Laboratory Benefit Solutions Biocept
  • Lab services provider agreement
Integrated DNA Technologies Clear Labs
  • Integrated DNA to be primary supplier of next-generation sequencing oligo products for Clear Lab’s NGS-based food safety platform
NEW CLINICAL STUDIES
DX Partner Other Partner(s) Description of Study
Group K Diagnostics (GKD) Health Network Laboratories
  • Trial to validate the accuracy, effectiveness and clinical implications of GKD’s MultiNostic liver function test
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