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: