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

As the calendar turned to 2018 and Medicare turned to PAMA, diagnostic deal making revved up. Deal volume was relatively heavy although short on drama. But what looks to be a big year is just beginning.

M&A
Continuing recent patterns, most of the month’s M&A action focused on the acquisition of molecular diagnostic companies including the tying up of a loose end from the Abbott-Alere merger. To make the deal happen, Alere sold its Triage business to Quidel. The package included The Summer Ridge campus which Quidel flipped to Alexandria Real Estate Equities for $148.7 million in a sale-leaseback that will allow Quidel to stay in the campus’s four buildings for 15 years.

On Dec. 19, Siemens Heathineers completed its purchase of Fast Track Diagnostics (FTD), which produces CE Mark approved tests for infectious disease detection, acquiring over 80 platform-agnostic assays and syndromic panels for its Siemens’ Versant kPCR Molecular System test menu. FTD and its 80 employees will be folded into the Siemens Healthineers’ business while continuing to operate under the FTD brand name.

Other notable M&A deals in the molecular space included:

• Roche’s $27 per share tender offer for Ignyta, a developer of precision medicine cancer treatments guided via diagnostic tests, as part of a merger agreement between the two firms;

• Biocrates Life Sciences’ agreement to acquire Metanomics, the Austriabased metabolomics biomarker developer, for an undisclosed price. The deal “will enable us to provide deep metabolic phenotyping through targeted metabolomics profiling services, customized assays, targeted screening kits, and comprehensive data interpretation,” noted Biocrates’ CEO;

• The acquisition of metagenomics technology developer Radiant Genomics by Zymergen; and

• Mars Petcare’s acquisition of Finnish animal molecular diagnostics developer Genoscoper Laboratories.

Meanwhile, a pair of potential blockbusters not directly involving labs are expected to have major repercussions on diagnostics, including Becton Dickinson’s $24 billion acquisition of device maker C.R. Bard, which closed on Dec. 29, and CVS’ proposed $69 billion purchase Aetna. Stay tuned…

Strategic Alliances
The same three patterns that shaped strategic alliances in 2017 drove deal making in January, namely Biopharm/Dx collaboration, product integration and academic research. With regard to the former, no company was more active than Pfizer, which in addition to new collaborations with Foundation Medicine for cancer companion diagnostics and Berkeley Lights for nanofluidics platform development was one of the five pharmaceutical companies to enter into a pre-competitive consortium with Regeneron Pharmaceuticals aimed at sequencing exomes of UK Biobank participants. Other notable Dx/Biopharm collaborations included:

• Merck KGaA + HTG Molecular Diagnostics which agreed to expand a deal originally designed to develop companion diagnostics for Merck’s investigational BTK inhibitor M7583 to other drugs;

• AstraZeneca + Myriad Genetics to codevelop companion tests for Astra- Zeneca’s PARP inhibitor Lynparza and Avastin; and

• Rhythm Pharmaceuticals + WuXi NextCode to create new treatments for rare obesity-related genetic disorders.

Significant product integration deals included collaborations of Qiagen with DiaSorin, Illumina with Thermo Fisher, and 10x Genomics with MGI.

Arguably, the month’s sexiest deals were the partnerships pairing lab companies with corporate tech giants from outside the world of diagnostics, including GE which partnered with Roche to develop clinical decision support software and Microsoft which announced it was working with Adaptive Biotechnologies to map human immune system genetics for use in developing early stage cancer detection blood tests.

Here’s a graphic summary of the key diagnostic deals from late November to mid-January: