Diagnostic Deals: A Roundup of the Key Mergers, Acquisitions, Alliances, Licenses and Other Strategic Transactions From the Past Month

The swirl of autumn leaves has brought a swirl of diagnostic deals. Here’s a recap of the key activity from mid-September through the third week of October.

M&A and Asset Sales
Quest Diagnostics announced an agreement to sell its India medical diagnostics business to Bangalore-based specialized diagnostics company Strand Life Sciences. The acquisition is expected to be an important addition to Strand’s 24 diagnostic labs across India, particularly as the company expands its work in oncology, genomics, and precision medicine. Terms of the deal, which is expected to close by the end of the first quarter of 2019, were not disclosed.

It’s been a busy month for Quest, which has also acquired several companies. Details are provided in the chart below.

A deal not included in the chart but worth mentioning involves BioMérieux. The global in vitro diagnostic company announced it may eventually increase its previously announced minority stake in Suzhou Hybiome Biomedical Engineering, a Chinese firm that develops and manufactures a range of automated immunoassay analyzers that have been cleared by the China Food and Drug Administration.

A key trend appears to be driving M&A deals. Now that the American Clinical Laboratory Association (ACLA) lawsuit against CMS has been dismissed, there is greater clarity with regard to PAMA reimbursement rates; cuts to Medicare Part B prices will stand. In order to offset the reduction in revenues, diagnostic companies are looking to other sources, namely acquisitions. Of course, ACLA may appeal or there may be regulatory compromises. In the meantime, however, expect heavy M&A activity.

Strategic Alliances
Many new alliances were announced this past month, including expansion of a collaboration between LabCorp and Walgreens that was initially piloted at 17 Walgreens stores in 2017. Customers at an additional 600 Walgreens stores throughout the U.S. will now have access to LabCorp specimen collection and testing services.

LabCorp also has two other new alliances. Details are provided in the chart below.

In addition to the alliances included the chart, there is another of note. It again has to do with Quest Diagnostics.

Quest has announced the formation of the Global Diagnostics Network (GDN), a partnership with other large labs across the globe aimed at sharing diagnostic innovation, information, and services in order to generate diagnostic insights and enhance global health care. GDN will initially focus on collaboration on companion diagnostics, and the creation of an emerging pathogen preparedness network to expedite infectious disease research and response. Network founding members are Al Borg Medical Laboratories, based in Saudi Arabia with labs across the Middle East and Africa; Dasa, based in Brazil; GC Labs, based in South Korea; KingMed Diagnostics, based in Hong Kong with labs across Southeast Asia; Primary Health Care, based in Australia; and SynLab, based in Germany with labs across Europe and on four continents. The GDN has a presence on every continent and collectively is present in countries with over half of the world’s population.

Here’s a summary of key diagnostic deals from mid-September through the third week in October: