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

by | Aug 30, 2017 | Deals-lir, Essential, Laboratory Industry Report

It’s been a relatively quiet month on the diagnostic front in terms of both deal volume and impact. Here’s a rundown of the deals that did come down. M&A CRO acquisitions were the M&A headliners for the period. Not surprisingly, LabCorp was at the center of the storm. After acquiring Covance for $6.1 billion in 2015, LabCorp’s contract research business revenue has grown to nearly $3 billion per year. On July 31, the lab giant doubled down by announcing its agreement to buy mid-size UK CRO Chiltern for $1.2 billion. The deal comes two months after Chiltern moved deeper into Asia by acquiring Japanese biopharm CRO Integrated Development Associates. "Our acquisition of Covance has demonstrated the value of combining diagnostic and CRO capabilities, expertise, data and leadership," noted LabCorp CEO David King. A smaller deal was Cancer Genetics’ $12 million acquisition of oncology biopharm CRO vivoPharm announced on Aug. 14. "This accretive acquisition immediately strengthens our market position as the premier partner for oncology therapeutic and diagnostic development," explained CGI CEO Panna Sharma. The deals are no aberration. Acquisitions of CROs has been a driving force in diagnostic M&A activity throughout 2017, with Thermo Fisher Scientific’s agreement to acquire Patheon […]

It's been a relatively quiet month on the diagnostic front in terms of both deal volume and impact. Here's a rundown of the deals that did come down.

M&A
CRO acquisitions were the M&A headliners for the period. Not surprisingly, LabCorp was at the center of the storm. After acquiring Covance for $6.1 billion in 2015, LabCorp's contract research business revenue has grown to nearly $3 billion per year. On July 31, the lab giant doubled down by announcing its agreement to buy mid-size UK CRO Chiltern for $1.2 billion. The deal comes two months after Chiltern moved deeper into Asia by acquiring Japanese biopharm CRO Integrated Development Associates. "Our acquisition of Covance has demonstrated the value of combining diagnostic and CRO capabilities, expertise, data and leadership," noted LabCorp CEO David King.

A smaller deal was Cancer Genetics' $12 million acquisition of oncology biopharm CRO vivoPharm announced on Aug. 14. "This accretive acquisition immediately strengthens our market position as the premier partner for oncology therapeutic and diagnostic development," explained CGI CEO Panna Sharma.

The deals are no aberration. Acquisitions of CROs has been a driving force in diagnostic M&A activity throughout 2017, with Thermo Fisher Scientific's agreement to acquire Patheon for $7.2 billion representing the biggest deal of the year so far.

Other notable M&A developments from late July to mid-August:

  • Abbott's agreement to extend its previously announced $402 per share cash tender offer for Alere Series B preferred stock in connection with its acquisition of Alere (now priced at $5.3 billion);
  • Invitae's twin acquisitions of NGS testing firms Good Start and Combi- Matrix;
  • Roka Bioscience's $17.5 million asset sell-off to the Institute for Environmental Health in advance of the company's liquidation; and
  • Shareholder rejection of a Chinese equity firm's takeover bid of Epigenomics by shareholders leaving Epigenomics' CEO to comment that the company now faces "an uncertain situation with respect to its liquidity."

Strategic Alliances
On July 27, BioMérieux and Sysmex announced that they were dissolving their nearly decade-long joint venture to bring BioMérieux's IVD products to the Japanese market without explaining why. Sysmex will continue to distribute BioMérieux IVD reagents and medical instruments in Japan until Oct. 31 and provide customer support through March 31, 2018. Meanwhile, BioMérieux will bring its Japanese commercial operations in-house.

On Aug. 17, Helix announced that it had partnered with Illumina Accelerator, the accelerator program launched by Illumina to provide funding, lab space, tech expertise and other support services to startup companies developing consumer DNA products. Under the partnership, Illumina Accelerator will be able to offer its clients access to Helix's expertise in in NGS, software and product development, marketing, regulatory compliance and other fields.

Other notable alliances:

  • The strategic partnership between Fluidigm and Ascendas Genomics to develop and commercialize the former's molecular diagnostics products in China; and
  • Qiagen and HTG Molecular Diagnostics' new development program— the second under an existing master deal—to use the latter's NGS technology to develop gene expression profiles.
MERGERS, ACQUISITIONS & ASSET SALES
Acquiring Company Target(s) Deal Summary
LabCorp Chiltern (UK CRO)
  • Price: $1.2 billion cash
  • Status: Expected to close in 4Q
  • LabCorp to incorporate Chiltern into its biopharma services unit
Cancer Genetics vivoPharm (oncology CRO)
  • Price: $12 million, including $1.2 million cash and rest in CGI common stock shares
  • Status: Expected to close by end of August
  • Acquisition bolsters CGI's position in oncology discovery, in vivo and in vitro drug development, and early phase clinical trial testing for biotech and pharm companies
Institute for Environmental Health (via (newly formed Rokabio sub) Roka Bioscience
  • Price: $17.5 million cash
  • Status: To close by end of 2017
  • Asset sale as first step in Roka's liquidation
  • Roka shareholders must approve both asset sale and liquidation plan
  • Roka to provide transition services to IEH through end of 2017
Unilabs Blufstein
  • Price: Undisclosed
  • Status: No closing date given—deal will require foreign regulatory approval
  • Blufstein is an accredited, private lab in Peru with network of 31 collection centers and 4 hospital labs
Veritas Genetics Curoverse
  • Price: Undisclosed
  • Status: Undisclosed
  • Curoverse, which like Veritas is a Harvard Medical School spinout, is creator of open-source bioinformatics platform
Invitae CombiMatrix
  • Price: Invitae to offer up to 630,000 shares (value up to $6.0 million) for CombiMatrix Series F warrants
  • Status: Expected to close in 4Q pending shareholder approval
  • Good Start and CombiMatrix's tests will bolster Invitae's product portfolio (which includes exome sequencing and genetic tests for conditions spanning cardiology, hematology, cancer and metabolic disorders and newborn screening pediatric genetics tests)
Invitae Good Start Genetics
  • Price: Up to 1.65 million shares of Invitae common stock, $18.3 million in cash for elimination of outstanding secured debt and payment or assumption of $6 million of Good Start's liabilities and obligations
  • Status: Expected to close in August
  • Acquisition of Good Start and CombiMatrix (above) enables Invitae to add reproductive health to its genetic testing portfolio and become comprehensive genomic information company
DiaSorin Siemens Healthineers
  • Price: €47.5illion ($55.3 million) on debt- and cash-free basis
  • Status: Expected to close in 2H 2017
  • DiaSorin acquires Siemens's microtiter-based ELISA immunodiagnostics business and related assets
  • DiaSorin paid $300 million cash for Quest's Focus Diagnostics' immunoassay and molecular Dx products in March 2016
Agilent Technologies IP assets of Population Genetics Technologies
  • Price: Undisclosed
  • Status: Closed
  • Agilent acquires Genetic Technology's patents for both molecular and sample barcoding technologies which it will apply for improving its NGS detection capabilities
LGC Link Technologies (supplier of specialty reagents for oligonucleotide synthesis)
  • Price: Undisclosed
  • Status: Closed
  • LGC plans to form new Nucleic Acid Chemistry business unit within its Genomics division combining Link with its existing Biosearch oligo reagent group and Prime Synthesis CPG business
Royal Philips TomTec Imaging Systems (German software developer)
  • Price: Undisclosed
  • Status: Closed
  • Acquisition, coupled with June deal to buy Spectranetics, bolsters Philips' position in cardiac ultrasound and supports its expansion into OBGYN and other clinical areas
STRATEGIC ALLIANCES, PARTNERSHIPS & COLLABORATIONS
Partner 1 Partner 2 Deal Summary
Illumina Accelerator Helix
  • Objective: Provide support to start-ups and new companies developing DNA consumer products
  • Dynamic: Helix to provide expertise to Illumina Accelerator client companies
Cambridge Epigenetix NuGen Technologies
  • Objective: Development of new epigenetic sequencing products
  • Dynamic: Cambridge to integrate its TrueMethyl technology for oxidative bisulfite sequencing with Nu- Gen's sequencing library preparation kits
  • NuGen will sell new products, the first of which are expected by year's end
Cynvenio Biosystems Saint Luke's Cancer Institute
  • Objective: Breast cancer research
  • Dynamic: Launch new study evaluating use of liquid biopsy and natural killer cell testing for early detection of recurrent breast cancer in patients at high risk of relapse after neoadjuvant chemotherapy
Alexion Sema4 (Mount Sinai Health System spinoff)
  • Objective: Speed up diagnosis of rare genetic diseases, which often take years to diagnose
  • Dynamic: Combines Sema4's knowledge in NGS and genome interpretation with Alexion's SmartPanel precision medicine platform
Hemex Health Tata Elxsi
  • Objective: Development of Hemex's POC lab-in-a-box diagnostic device for integrated diagnosis of malaria and sickle cell
  • Dynamic: Bangalore, India-based Tata Elxsi to serve as Hemex's design and engineering partner
  • Hemex says it plans to sell product for about $1 per test, including amortized cost of a portable reader
Itus Wistar Institute
  • Objective: Development of Itus's Cchek platform for early cancer detection
  • Dynamic: Renewal of previous agreement under which Wistar will continue to provide Itus R&D support for developing Cchek
Thermo Fisher Scientific's BRAHMS Ortho Clinical Diagnostics
  • Objective: Create procalcitonin test for use on Ortho's Vitros systems for small-, mid-, and high-volume clinical labs
  • Dynamic: BRAHMS PCT assay is used in conjunction with other lab findings for managing sepsis
IDbyDNA ARUP Laboratories
  • Objective: Develop and commercialize NGS infectious disease testing using metagenomics
  • Dynamic: Metagenomics carries potential for testing that's more accurate and comprehensive than conventional testing procedures which may be restricted to specific pathogens and yield a high percentage of negative results
New England Biolabs TTP
  • Objective: Offer services and reagents to molecular diagnostic technology developers
  • Dynamic: Non-exclusive partnership
  • Results to be added to GenXys' TreatGxPlus software
Qiagen HTG Molecular Diagnostics
  • Objective: Develop gene expression profiling assays for use with NGS technology
  • Dynamic: Qiagen Manchester and HTG Molecular to use HTG EdgeSeq technology to develop assays to support commercialization of therapeutic products of third (unnamed pharmaceutical) company
  • This is second development program under Qiagen-HTG Molecular's master assay development, commercialization and manufacturing agreement
Bio-Rad Laboratories Visia Imaging
  • Bio-Rad acquires commercialization rights to Visia Imaging's second-generation immunofluorescence slide processing and reading platform for autoimmune disease evaluation
  • Bio-Rad to offer platform alongside its BioPlex 2200 System
Adaptive Biotechnologies Cancer Therapy Evaluation Program of National Cancer Institute
  • Objective: Identify immune repertoire dynamics driving cancer immunotherapy responses and expedite development of new immune molecular biomarkers
  • Dynamic: Researchers to use Adaptive's ImmunoSeq platform to sequence T cell and B cell repertoires of patients in NCI clinical trials
Tempus Rush University Medical Center
  • Objective: Cancer treatment research
  • Dynamic: Parties' second collaboration
  • Tempus also has collaborations with University of Chicago, Duke, University of Pennsylvania, Ohio's University Hospitals Seidman Cancer Center and Mayo Clinic
Pacific Biosciences Novogene
  • Objective: Co-develop and co-market applications based on PacBio's Sequel precision medicine research system
  • Dynamic: To focus on methods for sample processing, workflow automation, algorithm development and database construction
DISTRIBUTION, SALES & MARKETING AGREEMENTS
Property Owner Distributor Deal Summary
Biocept VWR
  • Products: Biocept blood collection tubes (validated for preserving ctDNA for up to 96 hours)
  • Territory: All global markets except China
  • Biocept CEO says deal is first step in company's transformation from CLIA lab business to technology and products company
DNAStar SHIPS Bioscience
  • Products: DNAStar's Lasergene software suite
  • Territory: Japan
  • Non-exclusive but SHIPS is currently the sole distributor of the DNAStar software in Japan
OneOme ProZed Pharmacy Solutions
  • Products: OneOme's PCR-based RightMed test for measuring effectiveness of certain drugs
  • Territory: Canada
  • Test available exclusively to ProZed customers at Northern Shores Pharmacy in North Bay, Ontario
Streck Innovative Medical Solutions
  • Products: Streck's cell stabilization and molecular products
  • Territory: Kuwait
  • Streck has inked recent distribution deals in Canada, Austria, Scandinavia, Switzerland, Slovakia, China, Indonesia, the Philippines, Singapore, Malaysia and New Zealand
OncoDNA Everything Genetic
  • Products: OncoDNA's molecular profiling solutions that combining liquid and solid biopsy assays
  • Territory: UK
OncoDNA BioHisto Maroc
  • Products: OncoDNA's liquid biopsy and tissue-based genomic tests, including OncoDeep, OncoTrace and OncoSelect
  • Territory: Morocco
  • Expansion of current deal allowing Wallac to distribute Amplidiag in South Africa
Agena Bioscience HeartGenetics
  • Products: Agena's MassArray Dx system to be marketed with HeartGenetics' HeartDecode genetic testing software and cardiovascular assays
  • Territory: Undisclosed
LICENSES
Licensor Licensee Deal Summary
Christiana Care (via its Gene Editing Institute of the Helen F. Graham Cancer Center & Research Institute) NovellusDx (Israeli personalized medicine firm)
  • Property: Gene-editing technology
  • Deal part of ongoing research collaboration designed to identify personalized cancer treatments
SUPPLY, SERVICE & TESTING AGREEMENTS
Supplier Client Deal Summary
Abbott North West London Pathology
  • $252 million managed equipment services contract covering UK
  • Partnership expected to result in servicing of 26 million tests per year, 6 percent of UK pathology market

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