DIAGNOSTIC DEALS

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.

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
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