Dx Deal Roundup: Key Acquisitions for Danaher & Exact, and a Big AI Partnership
Here are what G2 Intelligence considers the three most significant deals announced in the period from late August to early September.
Summer’s end has done little to slow the pace of strategic dealmaking in the medical diagnostics markets. Here are what G2 Intelligence considers the three most significant deals announced in the period from late August to early September.
Danaher to Acquire Abcam for $5.7 Billion
In the largest M&A transaction of the year in terms of enterprise value, Danaher signed a definitive agreement to acquire 100 percent of the shares of protein consumables manufacturer Abcam at $24 per share, a 2.7 percent premium over the stock’s last closing price and a total purchase price of roughly $5.7 billion.1
The all-cash deal, which is expected to close in the first half of 2024, comes at an important time for both firms. Abcam, a firm sometimes referred to as “the Amazon of antibodies,” produces and supplies antibodies, reagents, and other products for medical researchers. Moving into this relatively high-margin business will help Danaher offset recent losses caused by a drop in sales of the company’s medical and diagnostic tools for the biotech space and falling COVID-19 test sales. Danaher expects to add 20 cents per share to its adjusted earnings in the first full year after completion of the transaction, according to Reuters.2 The plan is for Abcam to operate as a standalone business under its own name within Danaher’s Life Sciences segment.
Exact Sciences to Acquire Resolution Bioscience from Agilent Technologies
Exact Sciences continues to make headlines. Less than two months after entering into a pair of key strategic deals with the Broad Institute of MIT and Harvard and Texas healthcare system Baylor Scott & White to boost its molecular residual disease (MRD) and multi-cancer early detection (MCED) capabilities, the company swooped in to acquire Resolution Bioscience just as its owner, Agilent Technologies, was preparing to close the business down.3 Although the financial terms weren’t disclosed, Agilent and Exact said in a joint release that those terms “are not material to either party.”4
In 2021, Agilent paid $695 million to acquire Resolution Bioscience, a developer of next-generation sequencing (NGS)-based precision oncology solutions.5 But things didn’t go according to plan and during Agilent’s recent earnings call, CEO Mike Mullen announced that the firm didn’t see a path to profitability and planned to shutter Resolution. In addition to saving Resolution from that fate, Exact Sciences will boost its own cancer testing capabilities by acquiring the company.6
“This agreement will enable the talented Resolution Bioscience team to continue their work advancing diagnostic solutions for their customers and patients, a very positive outcome of this transaction,” noted Agilent senior vice president Sam Raha in Agilent and Exact’s joint statement.4
“Resolution Bioscience’s high-quality liquid therapy selection platform perfectly complements our OncoExTra test, allowing Exact Sciences to help more cancer patients determine their best treatment options,” added Exact’s general manager of precision oncology, Brian Baranick, in the same statement.4
Paige Teams with Microsoft to Create AI Digital Pathology Cancer Solution
In addition to major M&A activity, the month in diagnostics dealmaking featured several significant new strategic alliances. Among the more intriguing ventures is the collaboration between Paige and Microsoft to create what the former describes as the world’s largest image-based artificial intelligence (AI) model to fight cancer.7 Spun out of Memorial Sloan Kettering Cancer Center in New York in 2017, Paige has become an AI data powerhouse and a major player in the digital pathology space. The company’s FullFocus™ viewing tool that allows pathologists to examine scanned digital slides on a screen rather than a microscope has received FDA approval. Paige is also the only company whose AI products are approved for use as secondary tools to identify prostate cancer.8
While Paige’s involvement in this kind of venture is to be expected, the participation of Microsoft is something few would have predicted just a year ago. The move traces back to January 2023 when the company laid off 10,000 workers, or 5 percent of its workforce, and shifted resources to AI.9 In addition to a $10 billion investment in ChatGPT owner OpenAI, Microsoft made an investment in Paige as part of a strategic partnership to develop AI-based diagnostics and cloud-based patient care.10,11
The new digital pathology initiative is a build out of an image-based AI model that Paige has developed for identifying cancer using over 1 billion images from 500,000 pathology slides. Paige plans to leverage Microsoft’s cloud storage and supercomputing infrastructure to enhance the model to be “orders of magnitude larger than anything out there,” said Thomas Fuchs, Paige’s co-founder and chief scientist, in a CNBC interview. The AI model will be capable of identifying both common and rare cancers that are notoriously difficult to diagnose, which researchers hope will enable labs and physicians to contend with staffing shortages and growing caseloads.12
“This is…a groundbreaking, land-on-the-moon kind of moment for cancer care,” Fuchs stated in the CNBC interview.12
References:
- https://investors.danaher.com/2023-08-28-Danaher-to-Acquire-Abcam
- https://www.reuters.com/markets/deals/medical-tech-firm-danaher-buy-abcam-deal-valued-57-bln-2023-08-28/
- https://www.g2intelligence.com/dx-deals-exact-sciences-makes-big-moves-to-maintain-leadership-of-cancer-dna-testing-market/
- https://www.businesswire.com/news/home/20230911677427/en/Agilent-Technologies-and-Exact-Sciences-Agree-to-Terms-of-Sale-for-Resolution-Bioscience
- https://www.agilent.com/about/newsroom/presrel/2021/02mar-gp21007.html
- https://seekingalpha.com/article/4628790-agilent-technologies-inc-q3-2023-earnings-call-transcript
- https://paige.ai/paige-announces-collaboration-with-microsoft-to-build-the-worlds-largest-image-based-ai-model-to-fight-cancer/
- https://paige.ai/paige-receives-fda-clearance-for-the-fullfocus-viewer-for-digital-pathology/
- https://blogs.microsoft.com/blog/2023/01/18/subject-focusing-on-our-short-and-long-term-opportunity/
- https://www.forbes.com/sites/qai/2023/01/27/microsoft-confirms-its-10-billion-investment-into-chatgpt-changing-how-microsoft-competes-with-google-apple-and-other-tech-giants/
- https://paige.ai/paige-collaborates-with-microsoft-to-transform-cancer-diagnosis-and-treatment-with-the-use-of-pathology-ai/
- https://www.cnbc.com/2023/09/07/microsoft-paige-building-worlds-largest-ai-model-to-detect-cancer.html
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Here’s a summary of other key strategic diagnostic deals announced in the period from late August through September 2023:
Mergers, Acquisitions, and Asset Sales
| Acquiring Company | Target(s) | Deal Summary |
|---|---|---|
| Thermo Fisher Scientific | CorEvitas | · Price: $912.5 million cash · Status: Closed · Acquisition of Massachusetts-based provider of real-world evidence for pharma and biotech companies complements Thermo’s clinical research business |
| Exact Sciences | Resolution Bioscience | · Price: Undisclosed · Status: Agreement to acquire with no closing date announced · Exact acquires Agilent Technologies’ cancer testing business that had previously been slated for closure due to poor NGS kit sales |
| Danaher | Abcam | · Price: $5.7 billion cash, representing $24 per share for all Abcam outstanding shares · Status: Agreement to acquire expected to close in mid-2024 · Acquisition of major protein consumables supplier boosts Danaher’s complex disease mapping and drug discovery capabilities · Abcam to operate as standalone company and brand within Danaher’s Life Sciences segment |
| Bruker | PhenomeX | · Price: $108 million cash at $1.00 per share, 150% premium over share price · Status: Definitive agreement to acquire to close in Q4 · Acquisition gets Bruker into single-cell biology research tools, while boosting its emerging spatial biology business |
| Novacyt | Yourgene Health | · Price: Approximately £16.7 million ($21.2 million USD) cash at 0.522 pence per share, roughly 168% premium over Yourgene’s 0.195 pence per share closing price at end of June · Status: Closed · Acquisition of UK molecular diagnostics firm that provides prenatal screening, male infertility, thrombosis risk, and cystic fibrosis tests and genomic medicine services for healthcare, research, and biopharma |
| LabGenomics USA | QDx Pathology | · Price: Undisclosed · Status: Closed · Acquisition of molecular and diagnostic pathology firm via US subsidiary furthers South Korea-based LabGenomics’ North American expansion strategy |
| Cell Microsystems | Fluxion Biosciences | · Price: Undisclosed · Status: Closed · Cell biotech firm acquires producer of automated patch clamp technology and cell-based assay tools |
| Transnetyx | Laragen | · Price: Undisclosed · Status: Closed · Acquisition of sequencing and genotyping services company expands Transnetyx’s automated genotyping, microbiome analysis, fresh rodent tissue sample, and other offerings |
Strategic Alliances, Partnerships, and Collaborations
| Partner 1 | Partner(s) 2+ | Deal Summary |
|---|---|---|
| Paige | Microsoft | · Objective: Build image-based AI model for digital pathology and oncology · Dynamic: Paige to use Microsoft’s supercomputing infrastructure to incorporate up to 4 million digitized microscopy slides across different cancer types into a new AI model for use by hospitals and labs |
| Paige | Ohio State University’s Wexner Medical Center | · Objective: Evaluate use of AI-assisted tools to diagnose prostate cancer in a community hospital setting · Dynamic: Conduct study to measure the accuracy and efficiency of Paige’s Prostate Suite including how the AI-assisted workflow affects the time, resource use, and cost of diagnoses |
| Becton Dickinson | Navigate BioPharma | · Objective: Develop and commercialize companion diagnostics and clinical decision-making tools using flow cytometry · Dynamic: Combine Navigate BioPharma’s experience in designing and validating biomarker assays for clinical trials and regulatory submissions with BD portfolio of flow cytometry instruments, reagents, software, and IVD development services |
| Euformatics | Cerba | · Objective: Validate next-generation sequencing (NGS) tests · Dynamic: Euformatics to provide Cerba its Genomics Hub software suite for NGS test validation and evidence-based quality metrics for different NGS platforms |
| Mainz Biomed | Ärztliches Labor Dr. Buhlmann | · Objective: Bolster Mainz Biomed’s presence in German market · Dynamic: Mainz Biomed expands access of ColoAlert® colorectal cancer screening test to German private health insurance segment by teaming with provider of molecular diagnostics, genetics, human leukocyte antigen testing, and infectious disease assessments |
| Twist Bioscience | Ono Pharmaceutical | · Objective: Discover and develop novel antibodies for treatment of autoimmune diseases · Dynamic: Twist to utilize its Library of Libraries to help discover these antibodies against targets identified by Ono · Ono responsible for the development, manufacturing, and commercialization of any products resulting from the collaboration, with Twist to receive research fees, success-based clinical and regulatory milestones, and royalties on product sales |
| SphingoTec | Boditech Med | · Objective: Commercialize point-of-care blood test to assess kidney function and acute kidney injury · Dynamic: Expansion of existing licensing deal allowing Boditech to develop and manufacture tests incorporating SphingoTec’s kidney function biomarker proenkephalin A 119-159 (penKid) for use on Boditech’s AFIAS instruments |
| Quest Diagnostics | Sarepta | · Objective: Develop companion diagnostics for Sarepta’s investigational and on-market gene therapies · Dynamic: Extension of existing collaboration to cover screening assays developed by Quest for antibodies to Sarepta’s AAV-vector based gene therapies for muscular dystrophies, including Duchenne muscular dystrophy (DMD) and limb girdle muscular dystrophies (LGMD) · First companion diagnostic will be for Sarepta’s first gene therapy, ELEVIDYS (delandistrogene moxeparvovec-rokl), for treating underlying genetic cause of DMD |
| Proscia | DoMore Diagnostics | · Objective: Create platform enabling pathologists to predict outcomes for colorectal cancer patients and incorporate AI-assisted decision support into routine pathology workflows · Dynamic: Integrate DoMore’s Histotype Px Colorectal deep learning algorithm and Proscia’s Concentriq Dx digital pathology platform |
| BostonGene | Japan Industrial Partners and NEC | · Objective: Expand access to genomic testing and develop and validate personalized cancer therapy approaches · Dynamic: Form new Tokyo-based business called BostonGene Japan that will leverage BostonGene’s Tumor Portrait™ test for tumor subtyping and other platforms |
| DCN Dx | BIOASTER Microbiology Technology Institute | · Objective: Develop multiplex rapid lateral flow diagnostics for neglected tropical diseases · Dynamic: Enhance the specificity of an existing test for onchocerciasis, a helminth parasite infection also known as river blindness, with work supported by $1,859,302 in funding from the Bill & Melinda Gates Foundation |
| GRAIL (subsidiary of Illumina) | Whitman-Walker Institute and Cancer Support Community (CSC) | · Objective: Use multi-cancer early detection (MCED) testing in diverse patient populations to advance health equity in cancer screening · Dynamic: Research collaboration to use GRAIL’s Galleri®MCED test for study called INCLUDE (implementation and navigation of cancer liquid biopsy to understand diverse patient experiences) using community outreach to build awareness of and increase early cancer screening, focusing on historically underrepresented groups |
| Myriad Genetics | Onsite Women’s Health | · Objective: Launch national breast cancer risk assessment program · Dynamic: Leverage Myriad’s MyRisk® and RiskScore® hereditary breast cancer and risk assessment tools, and Onsite’s expertise in breast health services to screen and identify younger women with high breast cancer risk from among Onsite’s 400,000+ patients |
| Scale Biosciences | Basepair | · Objective: Facilitate adoption of single-cell protocols requiring minimal investment in bioinformatics infrastructure · Dynamic: Integrate ScaleBio’s single-cell sequencing data pipeline into Basepair’s cloud-based bioinformatics analysis platform to enable researchers to use Basepair’s graphical user interface to upload FASTQ and BCL files for rapid analysis and report generation |
| NGeneBio | MGI Tech | · Objective: Expand commercial access of NGeneBio’s cancer testing products · Dynamic: Combine NGeneBio’s NGS-based precision cancer diagnostic tests with MGI’s DNBSEQ-G99 sequencer · Collaboration provides for global distribution |
Distribution, Sales, and Marketing Agreements
| Product Owner | Distributor | Deal Summary |
|---|---|---|
| CrisprBits | MolBio Diagnostics | · Products: CRISPR-based point-of-care tests run on CrisprBits’ PathCrisp platform · Territories: India · MolBio also to manufacture tests |
| Devyser | Thermo Fisher Scientific | · Products: Devyser’s post-transplant NGS product portfolio · Territories: Brazil · Expand current exclusive distribution agreement for North America and Europe to include Brazil |
| Gold Colloid | Claremont BioSolutions | · Products: Gold Colloid’s gold nanoparticles · Territories: Undisclosed |
| Euformatics | Appolon Bioteck | · Products: Euformatics’ software and NGS data analytics tools · Territories: France |
| iotaSciences | Quantum Design China | · Products: iotaSciences’ single cell handling platforms · Territories: China · Exclusive |
| BioSkryb | Research Instruments | · Products: BioSkryb’s ResolveDNA® and ResolveOME™ single-cell amplification tools · Territories: Singapore and other parts of Southeast Asia |
| Wren Laboratories | Kindstar Globalgene Technology | · Products: Wren’s blood-based neuroendocrine tumor NETest®, PCR-based assay measuring expression levels of 51 genes associated with neuroendocrine cancer · Territories: China · Five-year agreement |
Licenses
| Licensor | Licensee | Deal Summary |
|---|---|---|
| Biocept | Plus Therapeutics | Non-exclusive licensing agreement enabling Plus to use Biocept’s CNSide™ assay in a clinical trial of its targeted radiotherapeutic rhenium 186 obisbemeda, with Biocept to receive upfront fee of $150,000 in stock + $6,000 for each cerebrospinal fluid tumor cell enumeration analysis performed in Biocept’s CLIA-certified lab before the technology transfer. Once transfer is complete, Plus to pay Biocept $300,000 + fees on a sliding scale starting at $2,800 for each CNSide test performed |
| ERS Genomics | AlgenScribe | AlgenScribe gets non-exclusive license to use ERS Genomics’ CRISPR-Cas9 patent portfolio for use in developing a genome editing platform |
Government Contracts
| Contractor | Govt. Agency | Contract Summary |
|---|---|---|
| Regeneron | U.S. Department of Health and Human Services’ Biomedical Advanced Research and Development Authority (BARDA) | Up to $326 million for Regeneron to develop a next-generation COVID-19 antibody therapy, with hopes of getting a candidate into clinical trials later this year |
| Satio | Division of Research, Innovation, and Ventures (DRIVe) program (part of BARDA) | Contract calls for Satio to develop a single-use rapid ebolavirus diagnostic that will combine Satio’s patch-based device with a sensitive and rapid immunoassay for detecting ebolavirus from Institut Pasteur de Dakar |
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