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Labcorp Goes on Spring Spending Spree

by | Jun 4, 2024 | Deals-lir, Essential, Lab Industry Advisor

Most of Invitae's employees will be hired by Labcorp, which expects the deal to add about $275 million in annual revenue

Labcorp has been on a spring acquisition spree, buying out virtually all of Invitae’s assets in an auction and wrapping up two hospital lab outsourcing deals.

Invitae, which focuses on genetic testing for diseases such as cancer, filed for Chapter 11 bankruptcy protection in February.1 It reported total assets of $535.1 million versus liabilities of more than $1.6 billion. Most of Invitae’s liabilities are to its primary lender, U.S. Bank, to which it owes $1.4 billion.2

For the first nine months of 2023, Invitae reported a net loss of $1.35 billion on revenue of $359.1 million. It lost $3 billion on revenue of $393.8 million for the first nine months of 2022.3 Labcorp bid $239 million for what it described as “select assets of Invitae,” although court records indicate it essentially acquired the entire company.4 The sales agreement would transfer Invitae’s inventory, property leaseholds, intellectual property, and equipment (including vehicles) to Labcorp. The only items excluded from the deal are Invitae’s bank accounts, accounts receivable, and most of its liabilities. As part of the transaction, Labcorp has agreed to make job offers to at least 95 percent of Invitae’s employees.5

“Invitae will complement our business and advance our leadership in genetic screening, diagnostics, and specialty testing,” said Labcorp chief executive officer Mark Schroeder in a press release.4

The deal was approved by a bankruptcy judge during the first week in May. The acquisition is subject to regulatory review and is expected to close by the third quarter of this year.4

Labcorp stated that the acquisition is expected to increase annual revenue by about $275 million per year, or about a 2.2 percent increase based on its 2023 revenues of $12.16 billion.6,7

“The Court’s approval of our proposed sale to Labcorp is a positive step forward in our restructuring process,” said Invitae chief executive officer and president Ken Knight in a statement.4

Labcorp noted in its statement that the acquisition would boost its testing abilities in oncology and rare diseases.4 Company spokespersons for both Labcorp and Invitae did not respond to phone and email queries seeking comment.

Bruce Carlson, producer of the Eye on IVD newsletter, believes the acquisition is a significant plus for Labcorp. He noted that Invitae’s financial woes mostly came from undertaking too many acquisitions. Meanwhile, it was able to grow revenue nearly seven-fold between 2017 and last year, demonstrating a proven business model. And the company’s genetic tests have high margins.

The deal allows Labcorp to “eliminate a competitor in those specialty, higher price-and-profit markets which they want to be more present in,” Carlson said in written comments provided to Lab Industry Advisor.

In its two other deals, Labcorp finalized the acquisition of a portion of the laboratory outreach business of Providence Health & Services, a non-profit hospital chain based in Renton, Washington.8

The deal applies to a large portion of Providence’s outreach business in California, where it operates 17 of its 51 hospitals. Labcorp is acquiring Providence’s outreach business in Orange County and Northern California, although it also operates several hospitals in the Los Angeles area. Terms of the deal were not disclosed.8

“We plan to use our expertise and capabilities to improve the efficiency and access of laboratory testing services for physicians and patients across California,” said Rajat Mehta, senior vice president of Labcorp’s West Division, in a press release.8

In addition to the acquisition, Labcorp said it was opening up four new draw stations in Northern and Southern California to improve and expedite services in the region.8

The other outreach deal included Labcorp acquiring the outreach business of Baystate Health, which operates five hospitals and 25 laboratories throughout Massachusetts. Labcorp also opened up a regional laboratory at Baystate’s hospital in Holyoke, Massachusetts.9


  1. https://www.kccllc.net/invitae
  2. https://www.kccllc.net/invitae/document/2411362240213000000000002
  3. https://ir.invitae.com/news-and-events/press-releases/press-release-details/2023/Invitae-Reports-Third-Quarter-2023-Financial-Results/default.aspx
  4. https://www.labcorp.com/invitae-receives-court-approval-sale-labcorp
  5. https://www.kccllc.net/invitae/document/2411362240507000000000006
  6. https://ir.labcorp.com/news-releases/news-release-details/labcorp-announces-winning-bid-select-assets-invitae
  7. https://ir.labcorp.com/news-releases/news-release-details/labcorp-announces-2023-fourth-quarter-and-full-year-results
  8. https://www.labcorp.com/labcorp-finalizes-acquisition-providences-outreach-laboratory-business-northern-california-and
  9. https://www.labcorp.com/labcorp-and-baystate-health-finalize-strategic-relationship-diagnostics-services-0


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

Mergers and Acquisitions

Partner 1 Partner 2 Date Announced Deal Summary
Babson Diagnostics Cynergy Wellness May 3, 2024 Objective: Cynergy will help manage Babson’s BetterWay™ blood testing orders placed directly by consumers.

Dynamic: Cynergy will provide clinical management for Babson’s tests, including reviews to ensure clinical appropriateness and results assessment.

Quest Diagnostics PathAI Diagnostics May 1, 2024 Objective: Quest is acquiring certain assets of PathAI for an undisclosed price.

Dynamic: PathAI’s laboratory in Memphis, TN, will become Quest’s “AI and digital R&D and solutions center.”

Labcorp Invitae April 25, 2024 Objective: Labcorp will pay $239 million for “select assets” of Invitae, which is currently in bankruptcy liquidation.

Dynamic: Labcorp will own the assets outright, pending regulatory approval. The deal was approved in early May by a bankruptcy court, which held an auction.

Labcorp Providence Health & Services April 23, 2024 Objective: Labcorp is acquiring the laboratory outreach services of hospital network Providence Health & Services in Northern California and Orange County, CA.

Dynamic: Labcorp will take over Providence’s outreach businesses in both locations. Labcorp acquired Providence’s Oregon outreach business last year.

Labcorp Baystate Health April 22, 2024 Objective: Labcorp is acquiring the laboratory outreach services of hospital network Baystate Health in Massachusetts.

Dynamic: In addition to the purchase, Labcorp is also establishing a regional laboratory at Baystate’s hospital in Holyoke, MA.

Source: Company press releases

Strategic Alliances

Partner 1 Partner 2 Date Announced Deal Summary
eLabNext Zifo May 13, 2024 Objective: To create a strategic partnership to further digitize lab platforms.

Dynamic: Zifo will offer product selection, configuration, integration, rollout, validation, and managed services support to eLabNext and its platform.

T2 Biosystems ECO Laboratory May 7, 2024 Objective: To create a strategic partnership to improve the treatment of Lyme disease.

Dynamic: ECO Labs will work on refining T2’s T2Lyme Panel, which promises early detection of Lyme disease.

PROTEINA Emory University School of Medicine April 29, 2024 Objective: To study how PPI PathFinder BCL2 Dx may be used to predict drug responsiveness in patients with acute myeloid leukemia.

Dynamic: PROTEINA will transfer its Pi-View analysis device and related reagents to labs at Emory for study.

Cold Spring Harbor Laboratory Northwell Health April 29, 2024 Objective: To expand an existing strategic relationship.

Dynamic: Northwell will help provide resources for Cold Spring Harbor to enhance its ongoing biology and cancer research.

Predictive Oncology FUJIFILM April 25, 2024 Objective: Reduce protein interference in bacterial endotoxin testing of biopharmaceutical products.

Dynamic: Predictive Oncology will use its EndoPrep™ sample treatment technology together with Fujifilm’s PYROSTAR™ bacterial endotoxin detection reagent to more accurately detect residual endotoxins in biopharmaceuticals.

Clarapath Mayo Clinic April 23, 2024 Objective: To form a strategic alliance to improve lab processing and efficiency.

Dynamic: Clarapath will provide the Mayo Clinic its SectionStar™ automated tissue sectioning, transfer, and quality control system. Mayo Clinic will invest in Clarapath and will name a director to the Clarapath board.

AIxMed CorePlus April 18, 2024 Objective: A pilot study to apply AIxMed’s AI algorithm toward creating a workflow solution for urine cytology.

Dynamic: AIxMed will supply the algorithm, while CorePlus will provide the cytology platform for testing.

Source: Company press releases

Government Contracts

None announced during the period.

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