Strategic alliance rather than M&A remains the preferred form of strategic interaction in the lab industry.

M&A

The preference of diagnostic companies to work with rather than digest each other belies the fact that billion-dollar M&A deals are taking place. A trio of them made the headlines this month:

Thermo Fisher-Patheon: On Aug. 29, Thermo Fisher Scientific completed its $7.2 billion purchase of contract development and manufacturing organization (CDMO) Patheon.

LabCorp-Chiltern: On Sept. 1, LabCorp wrapped up its $1.2 billion cash acquisition of contract research organization Chiltern.

Abbott-Alere: Meanwhile, after seeking to bail, Abbott is now doing its best to complete its $5.3 billon Alere acquisition alive, extending its previously announced cash tender offer for Alere Series B convertible stock three times. Alere is clearing the antitrust deck by selling off assets, including its Triage BNP assay business and San Diego facilities when the Abbott deal goes through. After announcing sale to Quidel in July, the company unveiled new terms on Sept. 18. Rather than $440 million, Quidel will pay $280 million for BNP, most of it deferred. Quidel will also have “control over the entirety of the BNP business.” In the original deal, Abbott retained about $50 million worth of distribution rights.

Strategic Alliances

Product integration was the flavor of the month in strategic alliances. Significant deals included:

• Qiagen’s integration of its circulating cell-free DNA blood collection tubes into Clinical Genomic’s liquid biopsy colorectal cancer recurrence test;
• A pair of integrations involving FDNA’s Face2Gene phenotyping applications—one with Ambry Genetics and the other with Variantyx; and
• The integration of DNAnexus’s cloud-based genome informatics platform with Edico Genome’s Dragen Genome Pipeline analysis technology.

Here’s a graphic summary of the key diagnostic deals from late August through the first three weeks of September: