Diagnostic Deals: A roundup of the key mergers, acquisitions, alliances, licenses and other strategic transactions from the past month

Although briskness in alliances partially offset sluggishness in M&A, October was far less dynamic than September for strategic deal making within the diagnostics sector. Here’s an overview of the key deals that did come down over the 4-week period beginning in late September 2019. Mergers & Acquisitions M&A activity was relatively slow in terms of both deal volume and impact. The biggest news was the Sept. 26 announcement that Illumina and Pac Biosciences had decided to postpone their $1.2 billion cash merger, which was first announced in November 2018 and expected to close in mid-2019, until the end of the year. The snag, according to SEC filings, is regulatory delay, specifically, the antitrust concerns of the UK Competition and Markets Authority (CMA). Illumina will pump $6 million in cash into PacBio to sustain the company’s sagging operations over the next three months. Illumina also has the option to extend the merger to March 31, 2020. Illumina is also on the hook for up to $43 million more in cash if it extends the deadline again, depending on the date it exercises the option. Antitrust regulatory approval bottlenecks were also behind Danaher’s decision to sell off three of its Life Science businesses to lab equipment supplier Sartorius for $750 million in cash. The companies, which had combined 2018 revenues of $140 million, include Danaher’s:

• Forte Bio biomolecular characterization business;
• SoloHill microcarrier technology business; and
• Chromatography hardware and resins business.

The sales clear the way for and is contingent on the completion of Danaher’s $21.4 billion acquisition of GE Biopharma, which is scheduled to close in Q1 2020. Strategic Alliances If you can’t beat ‘em, join ‘em. Hence, molecular diagnostic giant Qiagen’s announcement that it was throwing in the towel on developing next-generation sequencing (NGS) kits on its own and partnering with rival Illumina to do it on the basis of the latter’s hardware. The biggest strategic partnership blockbuster of October, and arguably of all of 2019, came on literally the same day after Qiagen announced that it was losing its longstanding CEO Peer Schatz and less than 24 hours after the Netherlands-based firm revealed that Q3 earnings would be coming in at the 3% rather than the expected 4% to 5% range as a result of weak sales in China. The Illumina partnership is a 15-year non-exclusive covering both NGS and companion diagnostics. Key terms:

• Qiagen secures the rights to develop and commercialize IVD kits for use with Illumina’s MiSeq Dx and NextSeq 550Dx systems;
• Qiagen will pay Illumina a platform access fee and milestone payments;
• Qiagen also gets rights to expand onto other future Illumina clinical sequencing systems;
• The partners will also look at opportunities for Qiagen to develop and market companion diagnostics based on Illumina’s TruSight Oncology assays;
• The partnership will initially focus on oncology but may expand to include cardiology, hereditary diseases, infectious diseases and autoimmune and inflammatory diseases.

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Here’s a summary of key diagnostic deals announced from late September through late October:

MERGERS, ACQUISITIONS & ASSET SALES
Acquiring Company	Target(s)	Deal Summary
Illumina	Pacific Biosciences	Price: $1.2 billion cash ($8 per share, representing 71% premium over market for 30 days ending Oct. 31, 2018) Status: Closing date extended from mid-2019 to Dec. 31, 2019 PacBio long-read sequencing technology complements Illumina short-read sequencing platforms and enables it to provide integrated workflows and innovations that leverage both technologies
Sartorius	Danaher	Price: $750 million cash Status: Expected to close Q1 2020 Danaher selling off 3 of its Life Sciences businesses, including for label-free biomolecular characterization, chromatography hardware and resins, and microcarriers and particle validation standards businesses to secure regulatory antitrust approval for its pending $21.4 billion acquisition of GE Biopharma business
Thermo Fisher Scientific	GlaxoSmithKline	Price: €90 million ($98.4 million) Status: Closed Thermo Fisher acquires active pharmaceutical ingredient (API) plant in Cork, Ireland which will become part of its pharma services business
Cardea	Nanosens Innovations	Price: Undisclosed Status: Closing of merger announced in Sept. Nanosens to continue operating as a brand under Cardea umbrella for Genome Sensor and other research tools Firms to make their CRISPR-Chip-based Genome Sensor available through early access program
Cleveland HeartLab (Quest subsidiary)	True Health Diagnostics	Price: $8.5 million Status: Purchase agreement signed Quest to acquire assets from bankrupt firm that will expand reach of its cardio-metabolic diagnostic services Acquisition doesn’t include facilities or staff
OncoCyte	Razor Genomics	Price: $10 million in cash upfront for 25% of Razor’s outstanding equity + $1 million milestone associated with recent positive CMS coverage decision for Razor test assessing risk in early-stage lung cancer patients after surgery Status: Closed Razor to use $4 million from initial $10 million payment to support supplemental clinical trial of test Razor shareholders eligible for additional $10 million in cash and/or $5 million in OncoCyte common stock upon achievement of clinical trial milestones OncoCyte to use Razor test as predicate in seeking Medicare coverage for its own DetermaVu assay
STRATEGIC ALLIANCES, PARTNERSHIPS & COLLABORATIONS
Partner 1	Partner(s) 2+	Deal Summary
Illumina	Qiagen	Objective: Develop NGS-based diagnostic kits, including companion diagnostics Dynamic: Non-exclusive15-year partnership giving Qiagen rights to develop + commercialize IVD kits for use with Illumina’s MiSeq Dx and NextSeq 550Dx systems Initial focus on oncology which may expand to cardiology, hereditary diseases, infectious diseases and autoimmune and inflammatory diseases
Illumina	Broad Institute	Objective: Develop secondary genome analysis software Dynamic: Codevelopment agreement to bring together Broad’s Genome Analysis Toolkit (GATK) with Illumina’s Dynamic Read Analysis for Genomics (Dragen) Bio-IT platform to create a standardized methodology for processing high-throughput sequencing data + performing variant discovery analysis Software to be open-source + distributed via Broad’s community support channels, including GitHub Illumina to develop proprietary, hardware-accelerated versions of software for Dragen + partners to validate that results from these versions are functionally equivalent to co-developed open-source software to ensure interoperability of data for downstream analyses
Thermo Fisher Scientific	Ortho Clinical Diagnostics	Objective: Expand Ortho’s MicroTip-capable Vitros Systems drug testing menus to enable testing for fentanyl + tricyclic antidepressants Dynamic: Addition of Thermo Scientific DRI Fentanyl Assay + DRI Tricyclics Serum Tox Assay
LabCorp	HealthEC + New Jersey Primary Care Association (NJPCA)	Objective: Develop database + information exchange platform to provide integrated lab and clinical data to NJPCA centers Dynamic: Platform, to be supported by HealthEC + made available via LabCorp’s Care Intelligence app, to help centers improve value-based care with specific focus on outcomes for patients with chronic conditions like diabetes and chronic kidney disease
ProciseDx	Lumiphore	Objective: Incorporate Lumiphore’s metal luminescent reporter technology into ProciseDx’s rapid, quantitative point-of-care tests Dynamic: ProciseDx to get exclusive worldwide rights to use Lumiphore’s reporter technology in its diagnostic tests
New Horizon Health	Prenetics	Objective: Commercialize New Horizon’s ColoClear colorectal cancer test in Hong Kong + other Asian markets Dynamic: New Horizon to transfer ColoClear technology to Hong Kong-based Prenetics, which will establish a dedicated facility within its lab to commercialize test Prenetics to launch test in Hong Kong in early 2020 + in Southeast Asia later in year
NeuMoDx	SelfScreen	Objective: Commercialize human papillomavirus (HPV) screening test Dynamic: SelfScreen to oversee processes to obtain CE-IVD regulatory marking for assay on NeuMoDx 288 + NeuMoDx 96 sample-to-result systems NeuMoDx to manufacture + sell assay Qiagen, which markets two CE-IVD tests originally created by SelfScreen, owns 20% of NeuMoDx shares with option to acquire remaining 80% until mid-2020
BC Platforms	Blueprint Genetics	Objective: Develop data-driven clinical genetic testing services for patients with rare diseases Dynamic: Combine Blueprint Genetics’ clinical genetic testing services with BC Platforms’ data management technology to help hospital systems and life sciences companies incorporate large genetic datasets into patient care, research studies and sponsored testing programs
Canopy Biosciences	PercayAI	Objective: Add augmented intelligence to Canopy’s multi-omic + gene expression testing Dynamic: Newly launched PercayAI to interface its CompBio product with Canopy Biosciences’ RNA sequencing + NanoString diagnostic tests
Genomenon	Sophia Genetics	Objective: Incorporate Genomenon’s Mastermind Genomic Search Engine into Sophia’s artificial intelligence platform + Alamut Suite for genomic analysis Dynamic: Integration leverages both technologies to enable rapid access of genomic evidence linked to human variants
Genomenon	Congenica	Objective: Incorporate Genomenon’s Mastermind Genomic Search Engine results into Congenica’s clinical decision support platform Dynamic: Make Genomenon’s Mastermind Professional Edition software available to all Congenica users, including the UK’s National Health Service
Novigenix	RadioMedix	Objective: Develop precision oncology test for patients with neuroendocrine tumors Dynamic: Novigenix to create an immune-transcriptomic-based test using its LITOseek platform to monitor effectiveness of a type of treatment, alpha and beta peptide receptor radionuclide therapy (PRRT), that RadioMedix is developing
BioDirection	Antwerp University Hospital	Objective: Develop + evaluate BioDirection’s Tbit blood-based testing system for detecting concussion within 90 seconds Dynamic: Antwerp University Hospital to provide technical support via the CENTER-TBI, short for Collaborative European NeuroTrauma Effectiveness Research in Traumatic Brain Injury, of which it serves as coordinator
Evotec	Celmatix	Objective: Discover new drugs for women’s reproductive health conditions including polycystic ovary syndrome, endometriosis + infertility embedded (FFPE) tissue analysis Dynamic: New alliance under which Evotec to be responsible for medicinal chemistry and in vitro and in vivo pharmacology activities Celmatix to contribute its Reproductive Atlas platform
Novogene	Chipscreen Biosciences	Objective: Develop a companion diagnostic for chiauranib, a new cancer drug being developed by Chipsreen Dynamic: Novogene to develop + provide molecular testing services to Chipscreen during clinical testing of the drug
Gestalt Diagnostics	Flagship Biosciences	Objective: Develop integrated workflow that gives pathologists access to Flagship’s analysis services for digital images to support PD-L1 testing Dynamic: Gestalt to integrate Flagship’s machine learning + artificial intelligence tools to enable cancer marker detection
Gestalt Diagnostics	MindPeak	Objective: Develop an integrated workflow enabling pathologists to instantaneously send regions of interest to MindPeak’s image analysis services MindPeak;s services support evaluation of the ER, PR + Ki-67 biomarkers for breast cancer diagnosis
Prometheus Biosciences	Takeda Pharmaceutical	Objective: Develop + commercialize therapies for inflammatory bowel disease Dynamic: Global strategic collaboration combining the Prometheus bioinformatics platform with Takeda’s drug development expertise to deliver new IBD therapies Prometheus responsible for identification + validation of 3 unique drug targets for IBD, and for development and commercialization of companion diagnostics to complement the targeted drugs Takeda responsible for all drug discovery, clinical development and commercialization activities for resulting targeted therapeutics Prometheus to receive undisclosed initial upfront payment from Takeda and is eligible for up to $420 million in development, regulatory and commercial milestone payments across all 3 programs
Genomind	DrChrono	Objective: Develop electronic health records applications to support pharmacogenomics in mental health treatment Dynamic: Expansion of current EHR partnership aimed at enabling physicians to order Genomind Professional PGx test directly through the EHR + then get test results, along with Genomind consultation services, through the same portal
Lantern Pharma	National Cancer Institute’s developmental therapeutics branch	Objective: Identify + validate gene signatures that predict whether patients are likely to respond to treatments Lantern is developing Dynamic: Lantern to use its CellMiner and CellMinerCDB artificial intelligence platforms, and apply regression models and algorithms to categorize genetic markers that predict response or confer sensitivity to drug candidates within its therapeutic pipeline
Ginkgo Bioworks	Berkeley Lights	Objective: Incorporate Berkeley Lights’ Beacon optofluidic platform into Ginkgo’s automated genetic engineering foundries Dynamic: Under multi-year, non-exclusive $150 million deal, Ginkgo to acquire Beacon platforms from Berkeley Lights + fund development of workflows for use in microbial and mammalian organisms
Sciex	Protein Metrics	Objective: Improve connection between Protein Metrics’ software products + Sciex’s high-resolution accurate mass (HRAM) spectrometry systems Dynamic: Link Protein Metrics’ Byos protein characterization software with Sciex X500 Systems to create an open data-analysis ecosystem enabling biopharm companies to bring therapeutics to market more quickly
DISTRIBUTION, SALES & MARKETING AGREEMENTS
Property Owner	Distributor	Deal Summary
Aalto Bio Reagents	Veritas	Products: Aalto’s purified human proteins, monoclonal and polyclonal antibodies, viral antigens and disease state plasma Territory: Japan
PetaGene	Alliance Global (AGBL)	Products: PetaSuite genomic data compression software Territory: Pakistan, Bangladesh, Sri Lanka Exclusive
PetaGene	Genique Lifesciences	Products: PetaSuite genomic data compression software Territory: India Exclusive
Oncore Pharma	BodyCheck	Products: Oncore’s ColonSentry colorectal cancer test Territory: Belgium, the Netherlands, Luxembourg $61.8 million deal
Serosep	Quidel	Products: Serosep’s EntericBio Dx gastrointestinal pathogen panel Territory: US Exclusive
NanoView Biosciences	Alfatest	Products: NanoView’s ExoView platform Territory: Italy Exclusive
T2 Biosystems		Products: T2Bacteria, T2Candida + other T2 diagnostic panels Territory: Puerto Rico + US Virgin Islands Exclusive
LICENSES
Licensor	Licensee	Deal Summary
Cambridge Enterprise	PredictImmune	Expansion of worldwide licensing agreement to give PredictImmune first refusal rights to Cambridge technology to predict disease outcome for systemic lupus erythematosus as a follow-on disease Previous deal covered technology to predict disease outcome in relapsing-remitting autoimmune + inflammatory disease, specifically for inflammatory bowel disease, including Crohn’s disease + ulcerative colitis
SUPPLY, SERVICE & TESTING AGREEMENTS
Supplier/Servicer	Client/User	Deal Summary
Abbott	Australian Red Cross Blood Service	Extension of 30-year deal to supply Abbott’s Alinity s System, lab automation solution + AlinIQ Analyzer Management system for blood + plasma screening
NEW CLINICAL STUDIES
DX Partner	Other Partner(s)	Description of Study
Exact Sciences	Mayo Clinic	Study to analyze real-world impact of Exact Science’s Cologuard colorectal cancer diagnostic test on colorectal cancer screening, incidence + mortality rates