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

While overall deal volume for 2018 increased, the year was relatively light in the dramatic transactions that were so prolific in the previous two years. Here's a quick overview of deals and predominant trends during the year.

M&A
The number of mergers and acquisitions in the molecular diagnostics and omics life science tools space rose 12% in 2018, according to research conducted by GenomeWeb. However, its research shows that the values of those deals were generally smaller than deals completed in 2017.

That's not surprising given that the lead-up to the PAMA market-based system for lab tests had been the primary driver in the lab space over the past two years as large labs looked to acquisitions to offset the anticipated Medicare reimbursement losses. Accordingly, most of the strategic mergers and acquisitions were already completed when PAMA officially took effect on Jan. 1, 2018.

Even so, many deals were made during the year and some pretty big ones at that. The year saw the closing two deals valued in the billions, both involving the same company: Roche. By contrast, there were four nine-figure M&A deals that closed in 2017, all at higher prices than the richest deal of this year, i.e., the $2.48 billion paid by Roche for Foundation Medicine. Here are the 2018 top 10 M&A deals, including transactions that have been announced but not yet closed as of year-end:

Top 10 Lab M&A Deals of 2018

* Announced in 2018 with closing scheduled for 2019

Strategic Alliances
Strategic alliance activity was also more robust this year, particularly in the new molecular, AI and NGS segments. Biopharma was a major theme with numerous deals featuring collaborations between pharma and test makers to develop companion diagnostics for new drug treatments. Product integration was also a prolific pattern in alliance making.

In addition to its $1.2 billion acquisition of Pacific Biosciences, which has not yet closed, Illumina initiated a number of alliances this past year and launched an incubator for genomic startups. Past activity suggests 2019 will also be a busy year for Illumina.

Here's a summary of key diagnostic deals from late November through December: