Diagnostic Deals: Urgent Need for Coronavirus Diagnostics Fuels Strategic Collaboration

Not surprisingly, teaming up for development and commercialization of coronavirus (COVID-19) detection and vaccination products was a major theme of strategic alliance making during the period. Notable deals included:

  • The collaboration between Curetis Group company Ares Genetics and China-based BGI Group to bring the latter’s newly CE-marked COVID-19 molecular test to the European market via an NGS testing service launched by Ares using BGI reagents;
  • The pairing of LGC Biosearch Technologies with diagnostics software developer UgenTec on a research-use-only AI-based coronavirus detection workflow;
  • Expansion of the current joint development agreement between Takis Biotech and DNA Sciences subsidiary LineaRx to preclinical development of a linear DNA vaccine for COVID-19; and
  • Johnson & Johnson’s new partnership with the U.S. Biomedical Advanced Research and Development Authority (BARDA) for accelerated development of a coronavirus vaccine.

The Month in M&A

M&A activity was sluggish in February, in terms of both deal volume and value. The deals that did take place were largely modest in scope and at undisclosed prices. Among the transactions for which purchase price was reported, Meridian Bioscience’s acquisition of Israeli GI and liver diagnostics firm Exalenz Bioscience was the most expensive at 6.10 shekels per share and 169 million shekels in total ($49 million). The deal, which is expected to close in the second quarter, will enable Meridian to bolster its stool antigen product line via addition of Exalenz’ BreathID Breath Test Systems, a, a point-of-care urea breath test platform for H. pylori detection.

In releasing its 2019 fourth quarter earnings, Exact Sciences disclosed that it had made a strategic move in the cancer diagnostics space via  a pair of acquisitions:

  • NGS-based cancer diagnostic test maker for therapy selection Paradigm Diagnostics; and
  • Viomics, a molecular firm specializing in biomarker selection for cancer diagnostics.

Here’s a summary of the key M&A and other strategic diagnostic deals announced from late January through February:

Acquiring Company Target(s) Deal Summary
Meridian Bioscience Exalenz Bioscience
  • Price: $49 million (6.10 Israeli shekels per share)
  • Status: Expected to close by end of Q2
  • Meridian to add Exalenz’s BreathID Breath Test Systems, a point-of-care urea breath test platform for H. pylori detection
P4 Diagnostix Strand Diagnostics
  • Price: Undisclosed
  • Status: Closed
  • Assets acquired include Strand’s Know Error system for forensic DNA testing + UroSeq test panel for advanced prostate cancer
  • Sale enables Hologic to concentrate breast health and molecular diagnostics core businesses
Quest Diagnostics Memorial Hermann Health System
  • Price: Undisclosed (all cash)
  • Status: Expected to close in Q2
  • Quest acquires outreach lab division of about 30 patient service centers + 60 in-office lab service sites
  •  Quest to also provide management services for all 21of Memorial Hermann’s hospital labs + become sole preferred provider of lab services for Memorial Hermann Health Plan
Exact Sciences Paradigm Diagnostics
  • Price: Undisclosed
  • Status: Closed
  • Exact acquires seller of NGS-based cancer diagnostic test used for therapy selection
Exact Sciences Viomics
  • Price: Undisclosed
  • Status: Closed
  • Exact acquires molecular diagnostics company specializing in biomarker selection for cancer diagnostics
OncoCyte Insight Genetics
  • Price: $7 million cash + $5 million OncoCyte common shares + 10-year revenue share of up to 10% net collected revenues for current IG pharma service offerings + tiered revenue share percentage of net collected revenues through end of lifecycle of new cancer tests developed using IG’s technology + contingent consideration of up to $6 million cash and/or common shares
  • Status: Closed
  • OncoCyte acquires IG lung cancer immunotherapy test in development + access to IG’s existing pharma services infrastructure, including a CLIA-certified + CAP-accredited lab + menu of single-gene tests for various biomarkers
Abcam Applied StemCell
  • Price: Undisclosed
  • Status: Closed
  • Abcam acquires Applied’s gene editing platform and oncology research products, including AccuRef reference materials
Sysmex Astrego Diagnostics
  • Price: Undisclosed
  • Status: No closing date announced
  • Sysmex to acquire 24.9% stake in company that makes Captiver system for rapid detection of bacterial infection and antibiotic susceptibility in biofluid
Predictive Oncology Quantitative Medicine
  • Price: Undisclosed
  • Status: Expected to close by end of H1
  • Predictive to couple QM’s Core predictive modeling platform with its own tumor profiling expertise and data to develop precision therapies
Partner 1 Partner(s) 2+ Deal Summary
BGI Group Ares Genetics (part of Curetis Group)
  • Objective: Make BGI’s COIVD-19 coronavirus detection tests and kits available in Europe
  • Dynamic: Ares to launch NGS testing service for virus using BGI reagents
UgenTec LGC Biosearch Technologies
  • Objective: Launch AI-based workflow for COIVD-19 detection
  • Dynamic: Research-use-only workflow to be based on UgenTec’s FastFinder PCR diagnostics software platform and Biosearch’s reagents
Thermo Fisher Scientific NanoPin Technologies
  • Objective: Develop liquid chromatography mass spectrometry (LC-MS) workflows for blood-based infectious disease detection
  • Dynamic: Leverage use NanoPin’s diagnostic platform and Thermo Fisher’s LC-MS technology to develop sensitive and fast clinical infectious disease assays to determine infection stage and monitor patient treatment response
Thermo Fisher Scientific Q-linea
  • Objective: Commercialize Q-linea’s ASTar automated antibiotic susceptibility testing instrument
  • Dynamic: TF gets exclusive rights to offer ASTar instrument in all markets except Sweden
  • TF Thermo already offers the Sensititre Complete Automated AST System for determining minimal inhibitory concentration (MIC)
Becton Dickinson Babson Diagnostics
  • Objective: Support small volume blood collection at retail pharmacies
  • Dynamic: Combine BD’s capillary blood collection device and Babson’s automated sample handling + analytical technologies to help retail pharmacies offer lab-quality diagnostic testing
Lucid Diagnostics Fred Hutchinson Cancer Research Center
  • Objective: Use Lucid’s EsoCheck Esophageal Cell Collection Device to evaluate Center’s Barrett’s Esophagus (BE) progression biomarkers
  • Dynamic: Lucid gets exclusive option to license Center’s BE progression biomarkers for one year after completion of a Phase II study demonstrating their accuracy
Namocell HepaTx
Takara Bio
  • Objective: Use Namocell’s Single-Cell Dispenser to perform single-cell isolation on HepaTx’s hepatocyte-like cells (iHeps)
  • Dynamic: Will also use Takara’s SMART-seq technology to characterize iHeps
Euformatics Bio.logis
  • Objective: Provide pharmacogenomic information for patients undergoing NGS-based genetic testing
  • Dynamic: Integrate Bio.logis’ Genetic Information Management Suite (GIMS) for analyzing genetic test data into Euformatics’ OmnomicsNGS annotation and variant interpretation platform
Advaxis Personalis
  • Objective: Use Personalis’ ImmunoID NeXT Platform for biomarker discovery
  • Dynamic: Extension of current collaboration supporting Advaxis’ ongoing Phase I/II program to advance its investigational ADXS-503 antigen delivery construct platform alone and in combination with pembrolizumab for non-small cell lung cancer patients
CosmosID Bioeostasis
  • Objective: Provide standardized, end-to-end services for preclinical development of next-generation microbiome-based health products
  • Dynamic: Integrate preclinical development studies from Biomeostasis’ rodent facility with CosmosID’s standardized GLP workflows and strain-level microbiome analysis
ProSciento Nordic Bioscience
  • Objective: Identify translational biomarkers for nonalcoholic fatty liver disease (NAFLD) and nonalcoholic steatohepatitis (NASH)
  • Dynamic: Use ProSciento’s Nash Pass patient registry and Nordic’s Protein FingerPrint biomarker technology to validate minimally invasive biomarkers for NAFLD and NASH
Predictive Technology Group Atrin Pharmaceuticals
  • Objective: Develop molecular diagnostics to improve selection of cancer patients who will benefit from treatment with DNA damage and response (DDR) inhibitors
  • Dynamic: Use Predictive’s sequencing capabilities, GenDB databases and women’s health biobank to study germline mutations in DDR pathways
  • Firms also to study common gynecologic disorders, e.g., endometriosis, linked to development of cancers in affected patients
Cellectricon StressMarq Biosciences
  • Objective: Cellectricon to use StressMarq’s reagents for its neurodegenerative research
  • Dynamic: StressMarq to give Cellectricon access to its life science reagents including pre-formed fibrils of tau and alpha-synuclein
Biodesix Streck
  • Objective: Incorporate Streck’s blood collection tubes (BCTs) into Biodesix’s sample collection protocols
  • Dynamic: Agreement will help Biodesix get FDA approval for lung cancer companion diagnostics using NGS and droplet digital PCR
Sysmex Riken Innovation
  • Objective: Create new diagnostic technologies for diseases that currently don’t have established diagnostic methods
  • Dynamic: Sysmex to provide diagnostic R&D expertise and Riken to provide cross-disciplinary research results with resulting technologies and businesses to be rolled out globally
Jackson Laboratory Shriners Hospitals for Children
  • Objective: Research genetic causes of orthopedic disorders in pediatric patients to create new treatments
  • Dynamic: Shriners Hospitals to perform NGS testing on DNA samples from families at its hospitals and outpatient locations
  • Jackson Lab to analyze data and develop mouse models with same genetic variations as participating patients
Property Owner Distributor Deal Summary
Molecular Biology Systems Velocidy Bio
  • Products: MBS’ NextGenPCR system
  • Territory: US and Canada
  • Previously distributed in US by now defunct Canon Biomedical
Sienna Cancer Diagnostics Immuno Diagnostic
  • Products: Sienna’s hTERT (human telomerase reverse transcriptase) test for bladder cancer
  • Territory: Finland
  • Exclusive
Curetis Quaphaco
  • Products: Curetis’ Unyvero A50 diagnostic system
  • Territory: Vietnam
  • Exclusive 3-year term which can be renewed in 2-year increments
Inex Innovate Inalways
  • Products: Inex’s OvaCis ovarian cancer test
  • Territory: Taiwan
Licensor Licensee Deal Summary
Agilent Technologies Twist Bioscience
  • Limited, non-exclusive license to use trade secrets at center of recently settled lawsuit in which Twist agreed to make one-time $22.5 million payment to Agilent for full relief of claims without admission of liability or wrongdoing
ERS Genomics Aelian Biotechnology
  • Aelian gets right to use ERS Genomics’ CRISPR-Cas9 patent portfolio for its own commercial functional genomic screening platform
DX Partner Other Partner(s) Description of Study
Foundation Medicine
Chugai Pharmaceutical
National Cancer Center Japan
  • Agreement to use FoundationOne Liquid liquid biopsy test in third stage of SCRUM-Japan, the largest cancer genomic screening consortium for late-stage cancer patients in Japan
Natera Elicio Therapeutics
  • Prospective, multicenter Phase I/II clinical trial of Elicio’s immuno-oncology drug ELI-002 in pancreatic cancer patients
Supplier/Servicer Client/User Deal Summary
Siemens Healthineers Quest Diagnostics
  • Siemens Healthineers to become Quest’s primary supplier of immunoassay testing products

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