Diagnostic Deals

Labs, Universities and Even Computer Companies Target Point-of-Care COVID-19 Test Development

The imperative to create and provide tests capable of detecting the SARS-CoV-2 virus that causes COVID-19 coronavirus continues to fuel strategic deal making. SARS-CoV-2 point-of-care tests was the objective of three of the key strategic collaborations during the period, including the creation of Corona Diagnostics, a new joint venture between Todos Medical and Emerald Organic Products that will seek FDA approval for a rapid point-of-care kit called Colloidal Gold. A week earlier, Todos announced that it had entered into an exclusive agreement to distribute Colloidal Gold in the US and Israel.

Most of the point-of-care SARS-CoV-2 tests in the pipeline are based on technology that detects the antibodies the body creates to fight off the virus. But one of the new ventures unveiled this month pairs North Carolina vaccine maker Heat Biologics with the University of Miami that uses isothermal amplification technology to detect viral nucleic acids. According to test codeveloper Sylvia Daunert, chair of biochemistry and molecular biology at the University of Miami Miller School of Medicine, “unlike tests that detect antibodies (IgG and IgM method), which can take weeks to manifest, our test is being developed to utilize molecular recognition and amplification of the target virus. This should allow for much earlier detection—within a couple days of exposure—providing critical and time-sensitive information to help curb the spread of the disease.”

One of the more unusual new COVID-19 collaborations is the alliance among BGI Genomics, part of the Guangdong, China-based BGI Group that has played a leading role in coronavirus test development, and computer technology firms Intel and Lenovo. The strategy is to leverage the latters’ computational and genomic analysis expertise and technologies, including a high-performance computing cluster to process reads from BGI’s BGI DNBSeq-T7 sequencer, to advance BGI’s research into COVID-19 virulence, transmission patterns and host-pathogen interactions in the interest of accelerating development of COVID-19 diagnostics and the identification of potential drug targets.

M&A Report: Thermo Fisher $11.5 Billion Qiagen Blockbuster Highlights Huge Strategic Month

Deals weren’t plentiful in March and, not surprisingly tailed off as the COVID-19 crisis deepened. But the deals that did occur were massive in significance, highlighted by what in normal times would have been the diagnostics business story of the month. It happened on March 3, 2020, when Thermo Fisher Scientific announced plans to acquire molecular diagnostics and pharmaceutical research powerhouse Qiagen for $11.5 billion. Although it came on the heals of Qiagen’s public determination to spurn would-be acquisition partners and go it alone, rumors of a takeover had been swirling since last October when long-time Qiagen CEO Peer Schatz tendered his resignation.

Terms of the Deal

Under the deal, which is slated to close in 2021 subject to regulatory approval and the usual closing conditions, Thermo Fisher will pay $43.35 per share of Qiagen common stock, a premium of roughly 23% above the closing price on the Frankfurt Prime Standard on March 2, the trading day before the deal was announced. Thermo Fisher will also assume approximately $1.4 billion of net debt from Qiagen.

Thermo Fisher also provided additional details about the terms regarding what happens if the deal falls through, which assume critical importance in light of the COVID-19 situation. Each side is on the hook to the other for termination payments depending on why the deal is terminated. Under one set of scenarios, Qiagen would have to pay Thermo Fisher $367 million in cash; another set of scenarios would obligate Thermo Fisher to give Qiagen a reverse termination cash payment of $575 million.

The Business Strategy

“This acquisition provides us with the opportunity to leverage our industry-leading capabilities and R&D expertise to accelerate innovation and address emerging healthcare needs,” noted Thermo Fisher Chairman, President and CEO Marc Casper in a statement. In addition to its $1.53 billion in 2019 revenues, Qiagen’s principal allure are its infectious disease and other molecular test products, which will significantly expand Thermo Fisher’s own specialty diagnostics portfolio. In his statement, Casper cited specific Qiagen products, including its:

  • Quantiferon-TB Gold Plus latent tuberculosis detection test, which will bolster Thermo Fisher’s own allergy, autoimmunity and transplant diagnostics tests; and
  • QiaSymphony platform for molecular infectious disease testing, and QiaStat-Dx syndromic testing system, which will complement Thermo Fisher’s gene analysis technologies.

Qiagen’s sample prep technologies, assays and bioinformatics solutions will fit nicely within the Thermo Fisher life sciences suite.

Exact Sciences Makes a Move

 Coming off its recent merger with Genomic Health, Exact Sciences was also active with a pair of acquisitions designed to expand its genetic cancer testing footprint beyond its signature Cologuard test, including of:

  • Paradigm Diagnostics, the producer of a solid tumor sequencing test that recently received a Medicare local coverage determination from Medicare Administrative Contractor Palmetto; and
  • Viomics, a molecular diagnostics company specializing in biomarker selection for cancer diagnostics.

Exact didn’t disclose the price of either acquisition but did indicate that it paid stock for Paradigm and will pay a combination of cash and stock for Viomics.

Invitae Takes Aim at Myriad Genetics

 The other big M&A story of the month was Invitae’s shopping spree consisting of three strategic purchases, the most significant of which was the $95 million acquisition of Diploid, a Belgian firm that manufactures Moon, AI software for diagnosing genetic disorders from gene sequencing. Invitae’s addition of Diploid’s pharmacogenetic assets throws down the gauntlet to Myriad Genetics, which has strong new direct competition in the hereditary cancer risk and non-invasive prenatal testing market.


Here’s a summary of the key strategic diagnostic deals announced from late February through March 2020:

MERGERS, ACQUISITIONS & ASSET SALES
Acquiring Company Target(s) Deal Summary
Thermo Fisher Scientific Qiagen
  • Price: $11.5 billion
  • Status: Expected to close in 2021
  • Qiagen molecular test products expand TF’s specialty diagnostics
  • Qiagen with sample prep technologies, assays and bioinformatics solutions complement TF’s life sciences products
Invitae YouScript
  • Price: $79.3 million, including $25 million cash + balance in Invitae common stock
  • Status: No closing date announced
  • Acquisition of provider of support platform that helps physicians manage patients’ medications in accordance with genetic test results
Invitae Genelex
  • Price: $20.7 million in Invitae common stock
  • Status: No closing date announced
  • Acquisition of pharmacogenetic testing firm
Invitae Diploid
  • Price: $95 million, including $32 million cash + $63 million in Invitae common stock
  • Status: Closed
  • Invitae gains new pharmacogenetic capabilities via acquisition of Belgian maker of AI software for diagnosing genetic disorders from gene sequencing
Exact Sciences Paradigm Diagnostics
  • Price: Undisclosed (at least partially stock)
  • Status: Closed
  • Acquisition of producer of solid tumor sequencing test that recently received a Medicare local coverage determination from Palmetto
Exact Sciences Viomics
  • Price: Undisclosed (cash + stock)
  • Status: Closed
  • Exact acquires molecular diagnostics company specializing in biomarker selection for cancer diagnostics
Yourgene Health AGX-DPNI
  • Price: €2.4 million ($2.7 million) cash + up to €1.7 million ($1.87 million) in cash earn-out payments based on sales growth performance
  • Status: No closing date announced
  • Yourgene acquires its current distribution partner for Iona noninvasive prenatal test in France
Abcam Marker Gene Technologies
  • Price: Undisclosed
  • Status: No closing date announced
  • Abcam acquires Oregon-based life sciences research tools firm
Fluidigm InstruNor
  • Price: $7.2 million, including $5.2 million cash + $2 million in stock
  • Status: Closed
  • Norwegian provider of integrated sample preparation systems for flow and mass cytometry to become part of Fluidigm’s mass cytometry business
STRATEGIC ALLIANCES, PARTNERSHIPS & COLLABORATIONS
Partner 1 Partner(s) 2+ Deal Summary
Todos Medical Emerald Organic Products
  • Objective: Provide rapid point-of-care COVID-19 test in US
  • Dynamic: Create joint venture to seek FDA approval for and distribute Colloidal Gold assay detecting antibodies to SARS-CoV-2
Heat Biologics University of Miami
  • Objective: Develop point-of-care COVID-19 test
  • Dynamic: Assay to detect SARS-CoV-2 via isothermal amplification technology detecting viral nucleic acids rather than by detecting antibodies
Chembio Diagnostics LumiraDx
  • Objective: Develop point-of-care diagnostic tests for SARS-CoV-2 and IgM and IgG antibodies to the coronavirus on both firms’ platforms
  • Dynamic: Expand on existing collaboration to develop point-of-care diagnostic tests for infectious diseases to address significant global health threats
BGI Genomics (BGI Group) Intel
+
Lenovo
  • Objective: Research COVID-19 genome
  • Dynamic: BGI to leverage the two computer companies’ computational and genomic analysis technologies to advance its studies of COVID-19 virulence
Cepheid Sherlock Biosciences
  • Objective: Develop new molecular diagnostic tests for infectious diseases, starting with test to detect SARS-CoV-2 virus
  • Dynamic: Use Sherlock Biosciences’ CRISPR-based SHERLOCK platform to design tests to run on Cepheid’s GeneXpert systems
Illumina IDbyDNA
  • Objective: Provide streamlined workflow solution for NGS detection of infectious diseases
  • Dynamic: Comarket IDbyDNA’s Explify platform for use with Illumina’s NGS instruments + library preparation kits
Biocartis Immunexpress
  • Objective: Co-commercialize Immunexpress’ SeptiCyte Rapid test on Biocartis’ Idylla platform
  • Dynamic: Under expansion of existing agreement, Biocartis to lead European commercialization as exclusive distributor of SeptiCyte Rapid test
  • Immunexpress to lead commercialization of test in US
Biocartis Bristol-Myers Squibb
  • Objective: Register Biocartis Idylla MSI test as companion diagnostic in China
  • Dynamic: Firms have companies have an existing collaboration to register the assay in US as a companion diagnostic for immunotherapies in metastatic colorectal cancer
Qiagen NuProbe
  • Objective: Develop NGS-based cancer liquid biopsy tests
  • Dynamic: Firms to explore integration of their respective amplicon-based target enrichment technologies to analyze DNA mutations with low variant allele fractions starting with a research-use only clinical oncology product
Thermo Fisher Scientific Janssen Biotech
  • Objective: Develop companion diagnostic test to support enrollment of cancer patients for clinical trials
  • Dynamic: Scientists from each firm to initially validate biomarkers for use with Thermo Fisher Oncomine Dx Target Test to identify non-small cell lung cancer (NSCLC) patients for clinical trials
AmoyDx Janssen Research and Development
  • Objective: Develop NGS-based companion diagnostic for Chinese market
  • Dynamic: AmoyDx to develop + seek Chinese regulatory approval for its LC10 Essential NGS panel as companion diagnostic to undisclosed cancer therapy
Prevencio Microsoft
  • Objective: Use Microsoft’s Azure AI-based computing cloud platform to sell Prevencio’s AI-based HART cardiac blood tests
  • Dynamic: Microsoft Healthcare’s salesforce to sell tests to its customer base, including hospitals, life science companies + CROs
PMI Biopharma Solutions Nashville Biosciences
  • Objective: Provide drug discovery + development services
  • Dynamic: Offer Nashville Biosciences genomic data + in silico technologies with PMI’s lab + research services as combined package for drug target identification + validation
Diagenode MGI
  • Objective: Comarket Diagenode’s NGS library preparation products in US, Europe + Asia Pacific
  • Dynamic: Non-exclusive deal, the companies have made Diagenode D-Plex library preparation products available on MGI sequencing platforms
Inspirata Mikroscan
  • Objective: Market + distribute oncology informatics products to US labs + hospitals
  • Dynamic: Bundle Mikroscan SL5 Dual-Mode Real Time Telemicroscopy and Digital Pathway systems and L5 Real-Time Telemicroscopy systems with Inspirata Dynamyx case management software
Fluidigm Next Gen Diagnostics (NGD)
  • Objective: Develop + sell sample preparation products for sequencing-based pathogen surveillance
  • Dynamic: Exclusive partnership to integrate Fluidigm Juno microfluidic sample prep system into NGD’s workflow for pathogen whole-genome sequencing
  • Fluidigm to get milestone payments starting this year + additional revenue over five years
LabCorp ZPredicta
  • Objective: Develop + commercialize tumor-specific preclinical models based on ZPredicta’s 3D cell culture platform
  • Dynamic: ZPredicta’s platform integrates organ-specific cellular and extracellular elements into 3D culture models for in vitro cancer drug testing
LabCorp Resolution Biosciences (RB)
  • Objective: Commercialize RB’s Resolution ctDx Lung test
  • Dynamic: LabCorp to launch test in the first half of 2020 + act as exclusive provider with RB performing assay as a laboratory-developed test out of its CLIA facility
Mologic Institut Pasteur de Dakar
  • Objective: Develop low-cost, rapid diagnostic test for Ebola virus disease
  • Dynamic: New test designed to detect Ebola infection early in blood by embedding monoclonal antibodies against surface glycoproteins
Pinpoint Science Analog Devices
  • Objective: Develop a handheld nanosensor diagnostics platform for infectious disease
  • Dynamic: Nanosensors to target low-cost, handheld diagnostics and can detect molecules in biofluids in 30 seconds
DISTRIBUTION, SALES & MARKETING AGREEMENTS
Property Owner Distributor Deal Summary
SD Biosensor Henry Schein
  • Products: SD Biosensor’s SARS-CoV-2 point-of-care immunochromatography test
  • Territory: US
Autobio Diagnostics Hardy Diagnostics
  • Products: Autobio’s Anti-SARS-CoV-2 Rapid Test
  • Territory: US
Primer Design (Novacyt subsidiary) Bruker-Hain Diagnostics (Bruker subsidiary)
  • Products: Genesig real-time PCR Coronavirus (COVID-2019) CE-IVD assay
  • Territory: Not specified
  • Exclusive 3-year term which can be renewed in 2-year increments
3D Biomedicine Science & Technology Todos Medical
  • Products: 3DMed 2019-nCoV Detection Kit + 3DMed 2019-nCoV & Flu A/B Detection Kit + Andis350 3DMed Automated Solution real-time PCR machine
  • Territory: US, Israel
  • Non-exclusive
Co-Diagnostics PreCheck Health Services
  • Products: Logix Smart Coronavirus Disease 2019 (COVID-19) Test
  • Territory: Ecuador
  • Exclusive
Co-Diagnostics PreCheck Health Services
  • Products: Logix Smart Coronavirus Disease 2019 (COVID-19) Test + CoDx Box
  • Territory: Panama
  • Exclusive
Shuwen Biotech PerkinElmer
  • Products: Diagnostic urine test for preeclampsia
  • Territories: 100 countries
LICENSES
Licensor Licensee Deal Summary
Zhejiang Orient Gene Biotech Aytu BioScience
  • Exclusive US distribution rights for Zhejiang’s point-of-care SARS-Cov-2 immunoassay
TTP DiaSorin
  • DiaSorin exclusively licenses TTP’s Puckdx sample-to-answer molecular diagnostics system for IVD applications
NEW CLINICAL STUDIES
DX Partner Other Partner(s) Description of Study
Capsulomics Johns Hopkins University
  • Study funded by five-year $3.7 million NIH grant to detect esophageal cancer and Barrett’s esophagus with hopes of commercializing an assay that’s cheaper and less invasive than standard upper endoscopies
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