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Dx Deals: Quest Closes PathAI Partial Acquisition and Strategic Alliance

by | Jul 2, 2024 | Deals-lir, Essential, Lab Industry Advisor

Deal is expected to give the lab giant a big boost in deploying artificial intelligence in the pathology space.

Quest Diagnostics has completed its partial acquisition and affiliation with Boston-based PathAI, a transaction expected to greatly boost its abilities in the burgeoning realm of artificial intelligence.1

The deal, which closed on June 11, is multi-faceted. The primary component is Quest’s acquisition of PathAI Diagnostics, the portion of PathAI’s business devoted to anatomic pathology laboratory services that was previously known as Poplar Healthcare.

Meanwhile, the nation’s largest lab testing company will use PathAI’s laboratory in Memphis, TN, for both AI and digital research and development, specifically in support of its AmeriPath and Dermpath Diagnostics subsidiaries. The lab will be renamed to AmeriPath, although PathAI will continue to perform its own research at the site. Quest has also become a “preferred partner” for PathAI’s biopharma clients, according to a company executive, and it will also license PathAI’s digital pathology image management system, AISight.1,2

AI has been taking the healthcare sector by storm in the past few years, and is expected to make significant portions of laboratory and medical practice into more prognostic rather than diagnostic operations.

“We’re seeing tremendous opportunities where we have an opportunity to identify individuals before they get sick,” said David Rhew, MD, global chief medical officer for Microsoft, at a recent conference for health insurers. “The combination of a proactive care element and to be able to screen large populations using AI, which is not invasive, but is low-cost and highly efficient—that’s a transformative mechanism.”3

Though AI holds much potential for the healthcare industry, challenges remain, including relying on data that is often fragmented and may not be representative of the entire population requiring healthcare services.4 Its use in laboratory services specifically is still in the early stages, with PathAI playing a leading role in clinical adoption with its AISight platform becoming available for early adoption in the US and Europe last year.5,6

According to a PathAI spokesperson, the AISight platform was created with “input from more than 200 pathologists and can be used to view, manage, and store pathology whole slide images. It is currently used by the world’s leading laboratories and research centers to power their digital pathology workflows and AI applications.”

Kristie Dolan, Quest’s vice president and general manager of oncology and pathology, notes in written comments to Lab Industry Advisor (LIA) that Quest “may also collaborate with PathAI in the future on AI algorithm development, informed by Quest’s deep expertise and data in pathology.”

PathAI chief executive officer Andy Beck, MD, indicates in written comments to LIA that the collaborations between the two companies are likely to extend over a long term.

“This is more than a sale of our laboratory to Quest. It’s an ongoing strategic relationship that marks a significant milestone for the anatomic pathology industry and signifies a major turning point for digital pathology adoption in the US,” Beck says.

“Quest and PathAI—collectively and independently—are committed to cutting-edge solutions that can help address the market’s need for more efficient and high-quality pathology operations. The PathAI Diagnostics laboratory,” he continues, “will allow Quest to accelerate its digital journey and ramp up its capabilities in AI with an already digitized laboratory.”

Over the longer term, Quest said that the deal “will enable it to deploy flexible digital slide preparation and diagnostic and second opinion consultation services to health systems and other providers, both in the United States and, through its global diagnostic network, overseas. The acquisition will also extend Quest’s anatomic pathology services into comparatively more profitable areas, including dermatopathology as well as gastrointestinal and urological diseases.”2

Aside from the various collaborations, the specific terms of the deal were not disclosed.

However, PathAI will remain an independent company, “at the forefront of developing AI technology for biopharmaceutical companies and pathology laboratories, and will continue to expand our software and algorithm business,” Beck says.


    1. https://newsroom.questdiagnostics.com/2024-06-11-Quest-Diagnostics-Completes-Acquisition-of-Select-PathAI-Diagnostics-Lab-Assets-from-PathAI,-Accelerating-Adoption-of-AI-and-Digital-Pathology-to-Speed-Cancer-Diagnosis

    1. https://www.prnewswire.com/news-releases/quest-diagnostics-to-acquire-pathai-diagnostics-to-accelerate-ai-and-digital-pathology-adoption-in-cancer-diagnosis-forms-licensing-agreements-with-pathai-302132353.html

    1. https://www.ahip.org/conferences/ahip-2024/agenda?day=4#agenda

    1. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9955430/

    1. https://www.pathai.com/resources/pathai-announces-early-adoption-of-its-digital-pathology-platform-and-algorithms-by-leading-anatomic-pathology-laboratories/

  1. https://www.pathai.com/resources/pathai-announces-early-access-program-to-drive-adoption-of-aisight-image-management-system-in-anatomic-pathology-laboratories-across-mainland-europe/


Other recent mergers, acquisitions, collaborations, and alliances in the laboratory sector include:

Mergers and Acquisitions

Partner 1 Partner 2 Date Announced Deal Summary
Precision for Medicine Algorics May 29, 2024 Objective: Precision for Medicine is acquiring Algorics and will use its platforms for further development of biomarker-related laboratory tests.

Dynamic: Details of the deal were not disclosed.

Source: Company press releases

Strategic Alliances

Partner 1 Partner 2 Date Announced Deal Summary
Kentucky Clinical Trials Laboratory AriBio Co., Ltd. June 21, 2024 Objective: To expand testing for Alzheimer’s disease.

Dynamic: Kentucky Clinical will test samples of cerebral spinal fluid provided by AriBio.

Aranscia Signature RX June 20, 2024 Objective: To further research into how GLP-1 medication may be used.

Dynamic: Aranscia will develop new companion diagnostics for GLP-1 usage that Signature RX will introduce into its medication management products.

Inocras Massive Bio Forge June 3, 2024 Objective: To better enhance personalized care for cancer patients.

Dynamic: Inocras to use its AI-driven platform to enable personalized care in cancer and rare diseases; Massive Bio will use the data to potentially match patients to clinical trials.

PreciseDx Baptist Health South Florida May 29, 2024 Objective: To test the efficacy of the PreciseBreast™ test to determine the risk of breast cancer reoccurrence.

Dynamic: Baptist Health South Florida will test the effectiveness of the test on “curated real-world data,” with an oncology organization called COTA also providing support. The test will be offered to Baptist Health patients if this validation study is successful.

Pathology & Cytology Laboratories Orchard Software May 23, 2024 Objective: To improve Pathology & Cytology Laboratories’ operations.

Dynamic: Pathology & Cytology will use its digital pathology solution complementary to the Orchard® Enterprise Pathology™ laboratory information system.

QuidelOrtho DryEye Rescue May 21, 2024 Objective: To expand availability of QuidelOrtho’s InflammaDry test to detect dry eye disease.

Dynamic: DryEye Rescue will distribute the test to ophthalmic practices.

Omega Laboratories Cannabix Technologies May 17, 2024 Objective: To create a breathalyzer test for cannabis.

Dynamic: Omega will introduce Cannabix’s breathalyzer product into its suite of drug tests.

Metabolon Trinity Capital, Inc. May 16, 2024 Objective: To fund the growth initiatives of Metabolon.

Dynamic: Trinity Capital is leading a group of investors who have extended a $60 million credit facility.

Source: Company press releases

Government Contracts and Grants

Contractor/Grant Awardee Govt. Agency Date Announced Summary
Nanopath National Institutes of Health   National Science Foundation May 21, 2024 Nanopath received $4 million in grants from the National Institutes of Health and National Science Foundation to support continued research and development of the company’s point-of-care tests for pelvic and gynecologic infections.
City of Hope California Institute for Regenerative Medicine May 20, 2024 City of Hope received a $5.4 million grant from the California Institute for Regenerative Medicine to build a new laboratory focused on stem cell research.
Source: Company press releases

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