ACQUISITIONS

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

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:

MERGERS, ACQUISITIONS & ASSET SALES
Acquiring Company Target(s) Deal Summary
Quidel Alere’s triage MeterPro cardiovascular and toxicology assets and B-type Naturietic Peptide (BNP) assay business
  • Price: $280 million, including $240 million deferred for BNP + $40 million in contingent payments
  • Status: Expected to close Oct. 31
  • Sale contingent on consummation of Abbott Alere merger which is expected on Sept. 30
  • Revised deal terms give Quidel complete control over BNP at lower purchase price
Thermo Fisher Scientific Patheon
  • Price: $7.2 billion in cash to acquire 95.3% of Patheon’s outstanding shares at $35 per share
  • Status: Close of deal announced in May
  • Acquisition of Durham, NC-based pharma and biopharm contract development and manufacturing organization which generated approximately $1.9 billion in 2016 revenue
LabCorp Chiltern (UK CRO)
  • Price: $1.2 billion all-cash transaction
  • Status: Closed
  • LabCorp to incorporate Chiltern into its drug development business creating CRO unit with over 20,000 employees worldwide
LabCorp ChromaDex
  • Price: Undisclosed
  • Status: Agreement signed with expected Sept. closing date
  • LabCorp to acquire ChromaDex’s analytical health, wellness and nutrition testing services which it will then offer via its Covance Food Solutions business
Pragmin Prognosis Rosetta Genomics’ PersonalizeDx unit
  • Price: $2.9 million cash, $1.25 million of which to be paid at closing and rest over time
  • Status: To close late Sept. or early Oct.
  • Rosetta paid $2 million for PersonalizeDx in 2015
  • Divestiture enables Rosetta to cut operating costs and focus on its Reveal test product
Precision for Medicine Agility Clinical (Carlsbad, CA CRO)
  • Price: Undisclosed
  • Status: Closed
  • Agility Clinical focuses on clinical development of rare diseases and orphan therapies
Metabolon Metabolomic Discoveries
  • Price: Undisclosed
  • Status: Closed
  • Acquisition of Berlin-based firm gets Metabolon into Europe after entering into Asia and Middle East collaborations earlier in 2017
ExcitePCR (subsidiary of PositiveID) PositiveID
  • Price: Undisclosed
  • Status: Acquisition contingent on consummation of $3 million+ finance deal
  • ExcitePCR to acquire PositiveID’s stake in FireFlyDX point-of-care portable diagnostic system for detecting pathogens in 30 minutes
STRATEGIC ALLIANCES, PARTNERSHIPS & COLLABORATIONS
Partner 1 Partner 2 Deal Summary
iBio TheoremDx
  • Objective: Develop proteins for use in rapid diagnostic testing of tropical diseases
  • Dynamic: iBio to develop proteins for TheoremDx to use with its point-of-care testing platform for Zika, Dengue, Chikungunya and West Nile viruses
Genomic Health Biocartis
  • Objective: Develop in vitro diagnostic version of Genomic Health’s Oncotype DX breast cancer assay on Biocartis’ Idylla platform
  • Dynamic: Genomic Health to pay Biocartis $3.3 million for exclusive worldwide rights to develop and commercialize Oncotype DX Breast Recurrence Score test on Idylla—enabling its customers to perform test locally in their own facilities
  • Genomic Health gets option to expand arrangement to oncology and urology tests
Curetis MGI (subsidiary of BGI Group)
  • Objective: Development of NGS tests for microbial infections
  • Dynamic: Combine Curetis’ Unyvero L4 Lysator PCR platform with MGI’s SP100 Sample Preparation System and MGISeq NGS sequencers
  • Curetis to provide sample prep technologies and panel and NGS assay design
  • MGI to furnish hardware, develop automated workflow and manufacture the NGS assays
  • MGI responsible for validating and securing regulatory approvals for the assays
PerkinElmer In-Depth Genomics (IDG)
  • Objective: Genetic diagnosis of neurological conditions via IDG’s Whole Genome Sequencing Diagnostic Program
  • Dynamic: IDG to offer program free to physicians
  • PerkinElmer Genetics to provide clinical WGS, data interpretation services, and diagnostic report generation to IDG
  • IDG to use de-identified genomic and clinical data to support R&D in rare neurological conditions
RPRD Diagnostics Orient Bio
  • Objective: Mutual diversification
  • Dynamic: RPRD to offer pharmacogenomic testing in South Korea
  • Dynamic: Orient Bio to move into precision medicine
Genome Medical Fabric Genomics
  • Objective: Better interpretation of genetic results
  • Dynamic: Genome Medical’s genetic counsellors to use Fabric’s newly launched Enterprise clinical genomics platform to interpret patient genetic results
OneOme Rainbow Genomics
  • Objective: Furnish OneOme’s RightMed pharmacogenomic test together with Rainbow’s whole-exome sequencing test services in Hong Kong, Japan and Macau
  • Dynamic: Rainbow to offer full OneOme RightMed platform to patients and physicians
  • OneOme has similar arrangements for RightMed inAustralia, Canada and Mexico
Admera Health Angsana Molecular & Diagnostics Laboratory
  • Admera gains access to Angsana’s physician network in in Singapore, Hong Kong and Malaysia
  • Deal accompanied by a pair of distribution agreements made by Admera covering Korea and Taiwan (see “Distribution Agreements” below)
Ambry Genetics NorthShore University HealthSystem
  • Objective: Genetic testing research
  • Dynamic: Ambry to provide whole-exome sequencing for 10,000 patients enrolled in NorthShore’s Genomic Health Initiative
Morphotek Fujirebio Diagnostics
  • Objective: Validate and commercialize CA125 II assay as companion diagnostic for identifying patients who can benefit from Morphotek’s investigational ovarian cancer treatment
  • Dynamic: CA125 II assay to be used on Fujirebio’s Lumipulse Instrument System
  • Fujirebio to get worldwide license to develop, manufacture and commercialize CA125 II as companion diagnostic
Ambry Genetics FDNA’s
  • Objective: Develop clinical ordering platform
  • Dynamic: Product integration combining AmbryPort 2.0 platform with FDNA’s Face2Gene phenotyping applications
Variantyx FDNA
  • Objective: Develop platform for using genetic variants to develop patient phenotypes
  • Dynamic: Product integration combining Variantyx’s Genomic Intelligence platform with FDNA’s Face2Gene phenotyping applications
DNAnexus Edico Genome
  • Objective: Develop platform for whole genome analysis
  • Dynamic: Product integration of Edico Genome’s Dragen Genome Pipeline analysis technology and DNAnexus’ cloud-based genome informatics platform
DNAnexus Saphetor
  • Objective: Develop platform for genome-based biomarker discovery and interpretation
  • Dynamic: Product integration leveraging Saphetor’s variant analysis software to annotate and classify variants from NGS directly from DNAnexus cloud platform
Qiagen Clinical Genomics
  • Objective: Development of colorectal cancer recurrence liquid biopsy
  • Dynamic: Product integration in which Qiagen’s circulating cell-free DNA (ccfDNA) blood-collection tubes is integrated into Clinical Genomics’ liquid biopsy test for colorectal cancer recurrence
Qiagen Angle
  • Objective: Co-marketing of circulating tumor cell (CTC) technology products
  • Dynamic: Market Angle’s Parsortix system for harvesting CTCs together with Qiagen’s liquid biopsy portfolio, including NGS, PCR, single-cell analysis and bioinformatics products
T2 Biosystems Cidara Therapeutics
  • Objective: Commercial placement of T2Dx instruments to support clinical trials for Cidara’s antifungal CD101s
  • Dynamic: Create exclusive pricing program to accelerate enrollment in trials evaluating Cidara’s echinocandin antifungal CD101 and increase number of hospitals adopting T2’s products
Exosome Diagnostics CareFirst Blue Cross Blue Shield
  • Objective: Conduct clinical studies that can be used to persuade health plans to cover Exosome’s molecular diagnostic products
  • Dynamic: CareFirst to be Exosome’s preferred partner for conducting evidence development studies designed to demonstrate clinical and cost-saving benefits of its tests
Illumina Advanced Analytical Technologies (AATI)
  • Objective: Develop streamline platform nucleic acid isolates and prepared libraries analysis
  • Dynamic: Co-marketing of AATI’s Fragment Analyzer automated capillary electrophoresis systems for quality control analysis of nucleic acids with Illumina’s NGS workflows
  • Similar to co-marketing deal for NGS library prep that AATI made with TTP Labtech earlier in 2017
Illumina Telegraph Hill Partners (venture capital firm)
  • Objective: Sell Illumina’s forensic sequencing technology
  • Dynamic: Launch of new company called Verogen to be sole provider of (and have global commercial rights to) Illumina’s MiSeq FGx sequencing, ForenSeq DNA Signature Prep Kit and ForenSeq Universal Analysis Software
  • Illumina to provide Verogen with sales and marketing, service and customer support during initial transition period
Illumicare ARUP Laboratories
  • Value-based care collaboration
  • Dynamic: Allow ARUP Labs to offer its MD clients access to Illumicare’s Smart Ribbon electronic medical record technology for providing "real-time visibility of the cumulative risk and financial impact of tests and medications being ordered during the course of care"
VolitionRx. Laboratory Medicine of German Heart Center at Technical University of Munich
  • Dual Objectives: Validate VolitionRx’s Nu.Q assays and advance its efforts to develop clinical trials for lung, pancreatic, prostate, colorectal, breast, and ovarian cancer
  • Dynamic: 3-year partnership agreement with University’s senior physician Stefan Holdenrieder
IBM JDRF
  • Objective: Research development of type 1 diabetes (T1D) in children
  • Dynamic: Combine IBM’s computing power with JDRF’s research expertise and worldwide connections create an entry point for T1D in field of precision medicine
Tempus University of California Davis Comprehensive Cancer Center
  • Objective: Development of personalized medicine cancer treatments
  • Dynamic: Tempus to perform next-generation sequencing on center patients with pancreatic cancer and hematological malignancies
  • Latest of Tempus’s collaborations with academic centers including University of Chicago, Duke, University of Pennsylvania, Ohio’s University Hospitals Seidman Cancer Center and Mayo Clinic
Biocept University of Texas Southwestern Medical Center
  • Objective: Non-small cell lung cancer research
  • Dynamic: Biocept and UT Southwestern research team to do study evaluating former’s Target Selector platform for rapid detection of ALK mutations in NSCLC patients
DISTRIBUTION, SALES & MARKETING AGREEMENTS
Property Owner Distributor Deal Summary
Pathnostics GenomeDx
  • Products: Pathnostics’ Guidance UGx and Guidance PRx tests
  • Territory: U.S.
  • Exclusive
ProAxsis Diagenics
  • Product: ProAxsis’s ProteaseTag Active Neutrophil Elastase Immunoassay
  • Territories: Great Britain and Ireland
Admera Health AllBio Pharma
  • Products: All Admera molecular diagnostic products
  • Territory: Undisclosed although AllBio Pharma is based in Taiwan
Admera Health Biois
  • Products: All Admera molecular diagnostic products
  • Territory: Undisclosed although Biois is based in South Korea
Baebies Trivitron’s Labsystems Diagnostics
  • Bilateral agreement
  • Labsystems to distribute Baebies’ Seeker platform worldwide
  • Baebies to distribute Labsystems’ newborn screening products in U.S. after getting regulatory greenlight
Interpace Diagnostics LabCorp
  • Products: Interpace’s ThyGenX and ThyraMIR molecular thyroid cancer diagnosis tests
  • Territory: Worldwide
  • Exclusive
  • 2-year extension of 2015 agreement thru 2019
OmniSeq LabCorp
  • Products: OmniSeq’s Immune Report Card and OmniSeq Comprehensive pan-cancer NGS assays
  • Territory: U.S.
  • Exclusive
Streck Biomedical Diagnostics
  • Products: Streck’s cell stabilization and molecular products
  • Territory: BeNeLux
  • Exclusive
Streck TK Biotech
  • Products: Streck’s cell stabilization and molecular products
  • Territory: Poland
  • Streck has inked recent distribution deals in Canada, Austria, Scandinavia, BeNeLux, Switzerland, Slovakia, China, Kuwait, Indonesia, the Philippines, Singapore, Malaysia and New Zealand
Canon BioMedical Sanbio
  • Products: Canon’s research-use-only Novalelle genotyping assays for detecting genetic variations
  • Territory: BeNeLux
Ceres Nanosciences Innatoss Laboratories
  • Product: Ceres’ Nanotrap Lyme Antigen Test
  • Territories: U.K., Austria, BeNeLux, France, Germany and Switzerland
  • Test to be offered as LDT
NantHealth Asia Genomics
  • Product: NantHealth’s GPS Cancer molecular profiling service
  • Territories: Malaysia, Vietnam, Singapore, Thailand and the Philippines
  • Exclusive
LICENSES
Licensor Licensee Deal Summary
Angle Queen Mary University of London (QMUL)
  • Property: Angle’s Parsortix system for researching cancer patient outcomes
  • QMUL gets option to license exclusively on world-wide basis
  • Angle retains all of its existing intellectual property rights in Parsortix but QMUL gets right to file patents for its findings using Parsortix
Baylor Genetics Fluidigm
  • Property: NGS library prep assay for detecting cystic fibrosis transmembrane conductance regulator (CFTR) gene
  • Fluidigm gets right to commercialize assay for research use on its Juno automated microfluidic system
SUPPLY, SERVICE & TESTING AGREEMENTS
Supplier Client Deal Summary
Co-Diagnostics Medcis Pathlabs India
  • Medcis to buy up to 36,000 of Co-Diagnostics’ hepatitis B, hepatitis C, HIV and human papillomavirus tests
  • CoSara Diagnostics, Co-Diagnostics’ joint venture, to manufacture and brand tests, and seek all required regulatory approvals
  • Medcis also gets right to buy future products developed by Co-Diagnostics
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