Dx Deal Roundup: A Major Proteomics Merger, Ginkgo Makes Pharma Inroads, and More Legal Woes for Illumina
As is usual at this time of year, deals in the diagnostics industry were up, both in terms of volume and value.
Following perennial patterns, diagnostic dealmaking picked up in the early fall in terms of both deal volume and value. Meanwhile, Illumina appears to be in even deeper legal trouble over its ill-fated GRAIL acquisition. Here’s a look at what G2 Intelligence considers the top three strategic deal stories in the period from mid-August to the end of the first week of October.
1. SEC Probes Illumina Over GRAIL Acquisition
Already facing massive fines in Europe and the US for acquiring former liquid biopsy spinoff GRAIL without antitrust approval, Illumina revealed that it is now also being investigated by the U.S. Securities and Exchange Commission (SEC). According to the firm’s most recent SEC Form 10-Q, the company received a letter from the agency in July 2023 providing notice of the investigation and requesting documents related to the acquisition, the statements and disclosures it made in connection with the deal, and “the conduct and compensation of certain members of Illumina and GRAIL management.”1
Neither the SEC nor Illumina have commented on the investigation, although the 10-Q indicates that Illumina is cooperating with the SEC. The legal controversy over the GRAIL acquisition has so far focused on antitrust issues and the stifling of competition in the cancer genetics testing market. The SEC probe opens a whole new liability front—federal laws governing how public corporations trade in securities and maintain transparency with investors.
Involvement of the SEC is another blow to the beleaguered genetic sequencing giant. The day after Illumina disclosed the investigation, its share prices fell 4 percent.2 The European Commission has already slapped Illumina with a record $476 million fine for closing the GRAIL acquisition prematurely and recently ordered the company to unwind it.3,4 The US Federal Trade Commission (FTC) has also ordered Illumina to divest itself of GRAIL.5 Since the ill-fated deal’s closing in August 2021, Illumina’s market value has plunged from roughly $75 billion to $28 billion, according to CNBC.6
2. SomaLogic and Standard BioTools Form $1 Billion Multi-Omics Powerhouse
On October 4, two major life science companies, Standard BioTools (formerly known as Fluidigm) and SomaLogic announced that they had agreed to combine to create a new multi-omics technology company. Under the all-stock deal, current SomaLogic shareholders will receive 1.1 shares of Standard BioTools for each SomaLogic share they own. Upon closing, they will own roughly 57 percent of the new company with Standard BioTools’ shareholders owning the remaining 43 percent.7
The new company will do business under the name Standard BioTools with Standard BioTools’ current CEO, Michael Egholm, at the helm and a pro forma equity value of over $1 billion. It promises to be a formidable combination. SomaLogic is a leading developer of proteomics tools that detect and analyze proteins in blood samples for use in disease research, making it a good fit for Standard BioTools’ life science platform for biomedical research. SomaLogic also brings another valuable asset to the table, namely, a longstanding proteomics-genomics commercial partnership with Illumina. The companies expect the merger to generate $80 million in annual cost synergies by 2026, while giving the new company over $500 million in cash and cash equivalents on day one.7
3. Ginkgo Bioworks Teams with Pfizer for Drug Development RNA Discovery
Ginkgo Bioworks stands to make up to $331 million under a newly announced collaboration aimed at discovering novel RNA-based drug candidates for Pfizer. “RNA therapeutics that encode proteins with the potential to treat or cure diseases represent an exciting new approach in medicine with the possibility of far-reaching application,” the company said in a statement. The plan calls for Pfizer to use Ginkgo’s RNA technology to enable discovery of natural and synthetic elements tailored for specific applications to discover new RNA molecules across three of its programs.8
Already one of the largest privately held biotech companies in the world, Ginkgo will receive upfront payments of an undisclosed amount from Pfizer. Gingko will also be eligible for research fees, milestone payments based on the achievement of certain developmental and commercial goals, and royalties on sales of any resulting drug products. Ginkgo has established a foothold within the pharmaceutical industry. Last May, the self-proclaimed “Organism Company” inked a drug discovery deal worth up to $406 million with German pharma company Boehringer Ingelheim.9
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Here’s a summary of other key strategic diagnostic deals announced during the period from late August to early October 2023:
Mergers, Acquisitions, and Asset Sales
| Acquiring Company | Target(s) | Deal Summary |
|---|---|---|
| Abbott | Bigfoot Biomedical | · Price: Undisclosed · Status: Closed · Acquisition of smart insulin management company and developer of Bigfoot Unity® management system that features the only FDA-cleared connected insulin pen caps that use continuous glucose monitor data to provide insulin dosing recommendations |
| InformedDNA | gWell Health | · Price: Undisclosed · Status: Closed · InformedDNA to expand genomics firm’s personalized wellness plan app to include specialties such as oncology and maternity care |
| BioAffinity Technologies | Precision Pathology Services | · Price: $2.5 million cash + $1.0 million in BioAffinity common stock · Status: Closed · BioAffinity acquires lab assets of Village Oaks Pathology Services via newly created wholly owned subsidiary named Precision Pathology Laboratory Services (PPLS), to accelerate market uptake of its CyPath® Lung test, which uses flow cytometry and AI analysis for early detection of lung cancer · Village Oaks to also provide staff, equipment, and administrative support for a fee under a 20-year deal |
| New Day Diagnostics | Epigenomics | · Price: Undisclosed · Status: Agreement to acquire approved by extraordinary general meeting of Epigenomics’ shareholders but hasn’t yet closed · Acquisition to enable New Day Diagnostics to provide accessible diagnostic solutions via clinical trials, manufacturing, and eventual market entry |
| Bruker | PhenomeX | · Price: $108 million cash at $1.00 per share, 150% premium over share price · Status: Closed · Acquisition gets Bruker into single-cell biology research tools, while boosting its emerging spatial biology business |
| Labcorp | Baystate Health | · Price: Undisclosed · Status: Expected to close in Q1 2024 · Labcorp to acquire Baystate’s outreach lab business and select operating assets, including laboratory service centers operated by Baystate in Massachusetts · Labcorp to also establish a regional lab in Baystate’s Holyoke, Massachusetts-based facility |
| Standard BioTools (formerly known as Fluidigm) | SomaLogic | · Price: All-stock deal worth over $1 billion, with SomaLogic shareholders to receive 1.11 shares of Standard BioTools common stock for each share of SomaLogic common stock · Status: Agreement to merge approved by boards of each company · Merger to form new company called Standard BioTools, with Standard BioTools shareholders to own approximately 43%, and SomaLogic shareholders to own approximately 57% |
| Investor group consisting of Innova Partnerships, Orchard Ventures, Novarum CEO Neil Polwart, and former Novarum chairman Dennis MacPhail | Novarum DX | · Price: Undisclosed · Status: No closing date announced · Acquisition of diagnostics software firm Novarum DX that specializes in software for reading lateral flow assay results using smartphones |
| Siemens Healthineers | Aspekt Solutions | · Price: Undisclosed · Status: Closed · Acquisition of firm that supports radiation oncology sites bolsters service offerings of Siemens’ Varian cancer therapy unit |
Strategic Alliances, Partnerships, and Collaborations
| Partner 1 | Partner(s) 2+ | Deal Summary |
|---|---|---|
| Hologic | Bayer | · Objective: Support adoption of contrast-enhanced mammography (CEM) in parts of Asia Pacific, Canada, and Europe · Dynamic: Combine the technologies of Hologic, which is a leading producer of CEM machines, and Bayer, which is a producer of injection systems with regulatory approval for use in CEM procedures · CEM seen as faster alternative to MRI in confirming cancer, with capability to free up imaging capacity for other patients, and in intermediate and high-risk screening |
| MDxHealth | University of Oxford | · Objective: Research the correlation between MDxHealth’s Genomic Prostate Score (GPS) test and prostate cancer progression following treatment for localized disease · Dynamic: MDxHealth to conduct GPS testing on patient samples derived from the Prostate Mechanisms of Progression and Treatment (ProMPT) cohort, a cooperation of multiple UK cancer research programs to collect biological samples and clinical data |
| Oxford Nanopore Technologies | University of Queensland (UQ) (Australia) | · Objective: Promote research for sequencing-based mRNA vaccine quality control testing · Dynamic: Research partnership with UQ’s Australian Institute for Bioengineering and Nanotechnology (AIBN) to use nanopore sequencing technology to optimize process of measuring mRNA vaccine quality attributes |
| Agilent Technologies | National Cancer Centre Singapore (NCCS) | · Objective: Create genomic profiles of cancers prevalent in Asia · Dynamic: Two-year research agreement with Agilent to supply researchers its Magnis Next-Generation Sequencing (NGS) Preparation System, an automated sequencing library preparation platform for analysis of tissue samples collected via routine clinical care · Agilent platform to also be used at Singapore’s Cancer Discovery Hub to help develop a simplified assay of multiple genes and complex genetic aberrations |
| MGI Tech | National Cancer Centre Singapore (NCCS) | · Objective: Facilitate genomic profiling of Asian-prevalent cancers · Dynamic: MGI’s DNBSEQ-G400 sequencer to be used at NCCS’s Cancer Discovery Hub (CDH) for RNA sequencing · DNBSEQ to also be included as part of Cancer Discovery Hub’s molecular assay catalog for cancer researchers in Singapore |
| BostonGene | Johns Hopkins University School of Medicine | · Objective: Advance cancer research to molecularly characterize patients’ tumors, immune systems, and tumor microenvironments for their predictive value in treatment response · Dynamic: Master agreement to collaborate on multiple cancer research projects, with BostonGene to provide analysis, interpretation, and visualization of data obtained from genomic, transcriptomic, proteomic, and imaging studies |
| BostonGene | Hokkaido University Hospital | · Objective: Identify HER2-positive breast cancer patients likely to benefit from targeted therapies, including HER2-low patients likely to respond to treatment with trastuzumab-deruxtecan, an antibody-drug conjugate · Dynamic: Hokkaido University Hospital to lead joint study to demonstrate benefits of investigating the tumor immune ecosystem’s effect on HER2-targeted therapy · BostonGene to use its genomics pipeline and RNA-based method to interrogate immune microenvironment properties and genomic biomarkers of response to different therapies and apply its Kassandra machine-learning algorithm to digitally reconstruct patients’ tumor microenvironments and cellular compositions |
| Myriad Genetics | Memorial Sloan Kettering Cancer Center (MSK) | · Objective: Study use of Myriad’s minimal residual disease (MRD) testing platform in predicting breast cancer treatment response · Dynamic: Investigate treatment response prediction in a metastatic patient population treated with CDK4/6 inhibitors, and investigate the association of MRD testing with chemotherapy treatment response in neoadjuvant setting |
| Twist Bioscience | IMIDomics | · Objective: Discover new antibodies for drug development · Dynamic: Twist to conduct antibody discovery against targets identified by IMIDomics · Twist to receive upfront and project-specific fees and be eligible to receive payments associated with specific clinical and commercial milestones, as well as royalty payments on product sales · IMIDomics to receive human antibodies against several of its priority targets from Twist |
| Promega | GlaxoSmithKline | · Objective: Develop and commercialize a microsatellite instability (MSI) companion diagnostic IVD kit · Dynamic: Utilize Promega’s PCR-based five-marker MSI panel to develop kit for identifying adult cancer patients with MSI-high solid tumors who may be eligible for potential treatment with Glaxo’s anti-PD-1 monoclonal antibody drug Jemperli (dostarlimab-gxly) |
| Ginkgo Bioworks | Pfizer | · Objective: Discover RNA-based drug candidates · Dynamic: Collaboration worth up to $331 million for Pfizer to leverage Ginkgo’s RNA therapeutics services to advance discovery and development of novel RNA molecules across three programs · Ginkgo to receive upfront payment and potential to earn research fees as well as development and commercial milestone payments and royalties on sales |
| Ginkgo Bioworks | Factorial Biotechnologies | · Objective: Develop a new enzyme for Factorial’s single-cell NGS library prep kit · Dynamic: Factorial to use Ginkgo’s enzyme services to develop novel isothermal DNA polymerase for its intracellular single-cell sequencing library prep chemistry, using Ginkgo’s Pichia pastoris expression system |
| Quest Diagnostics | Neway | · Objective: Speed dialysis lab testing and reduce testing costs for patients with end-stage renal disease (ESRD) · Dynamic: Strategic lab services arrangement allowing Neway to use Quest’s lab network to provide local testing services, including next-day results at reduced sample transportation costs |
| Quest Diagnostics | Americares | · Objective: Provide free diagnostic services and expanded telehealth to charitable clinics across US to reduce health disparities in underserved communities · Dynamic: Provide no-cost diagnostic services to 10 clinics for one year to help patients manage chronic disease · Quest Diagnostics Foundation to also offer grants to clinics in Baltimore, Chicago, Houston, and Richmond, Virginia, for telehealth services |
| Congenica | myTomorrows | · Objective: Offer cancer trial and pre-approval treatment options to clinicians via Congenica’s precision oncology portal · Dynamic: Leverage myTomorrows’ online platform for matching patients to clinical trials with service to go live in first quarter of 2024 |
| Astek Diagnostics | Key Technologies | · Objective: Develop benchtop analyzer to diagnose urinary tract infections · Dynamic: Automated Jiddu™ system to include single-use sample cartridges and fluorescence analyzer that detects bacteria and generates antibiotic susceptibility profile |
| A3P Biomedical | BioAgilytix | · Objective: Bring A3P’s prostate cancer test to US as a laboratory-developed test (LDT) · Dynamic: Developed by scientists at Sweden’s Karolinska Institutet, the Stockholm3 blood-based assay uses protein biomarkers, genetic biomarkers, clinical data, and a proprietary algorithm to predict risk of aggressive prostate cancer at an early stage |
| Arima Genomics | Protean BioDiagnostics | · Objective: Launch Aventa FusionPlus NGS test for the detection of gene fusions and other rearrangements across 361 genes in tumor tissue · Dynamic: Form joint venture called Aventa Genomics to launch test which will be performed in Aventa’s CLIA-certified lab in Orlando, Florida |
Distribution, Sales, and Marketing Agreements
| Product Owner | Distributor | Deal Summary |
|---|---|---|
| MGI Tech | Bio-Medical Science | · Products: MGI Tech’s genetic sequencers and reagents · Territories: South Korea |
| Devyser | Thermo Fisher Scientific | · Products: Devyser’s lab services to support pharmaceutical companies’ research and development projects · Territories: Undisclosed |
| Euformatics | Genetrics | · Products: Euformatics’ software and NGS data analytics tools, including Genomics Hub · Territories: Middle East |
| Guardant Health | EDX Medical Group | · Products: Guardant360® CDx advanced cancer genomic test and Guardant Reveal™ test · Territories: UK, Sweden, Denmark, Norway, Finland, Iceland |
| Mainz Biomed | Bioclinica | · Products: Mainz’s ColoAlert® at-home colorectal cancer test · Territories: Romania · Deal includes comarketing activities for the test |
| Vela Diagnostics | SRL | · Products: Vela’s HIV-1 drug resistance mutation assay kit · Territories: Japan |
Licenses
| Licensor | Licensee | Deal Summary |
| Fondazione Telethon ETS | Takara Bio Inc. | Telethon gets license to use RetroNectin method to produce its cell and gene therapy products |
Government Contracts
| Contractor | Govt. Agency | Contract Summary |
| BioFire Defense (subsidiary of BioMérieux) | US Department of Defense | Order-dependent contract worth up to $18.8 million to provide support for a military-use version of firm’s Next Generation Diagnostic System (NGDS) multiplex PCR instrument for infectious disease testing |
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