Dx Deals: Quest Closes PathAI Partial Acquisition and Strategic Alliance

Quest Diagnostics has completed its partial acquisition and affiliation with Boston-based PathAI, a transaction expected to greatly boost its abilities in the burgeoning realm of artificial intelligence.¹

The deal, which closed on June 11, is multi-faceted. The primary component is Quest’s acquisition of PathAI Diagnostics, the portion of PathAI’s business devoted to anatomic pathology laboratory services that was previously known as Poplar Healthcare.

Meanwhile, the nation’s largest lab testing company will use PathAI’s laboratory in Memphis, TN, for both AI and digital research and development, specifically in support of its AmeriPath and Dermpath Diagnostics subsidiaries. The lab will be renamed to AmeriPath, although PathAI will continue to perform its own research at the site. Quest has also become a “preferred partner” for PathAI’s biopharma clients, according to a company executive, and it will also license PathAI’s digital pathology image management system, AISight^™.^1,2

AI has been taking the healthcare sector by storm in the past few years, and is expected to make significant portions of laboratory and medical practice into more prognostic rather than diagnostic operations.

“We’re seeing tremendous opportunities where we have an opportunity to identify individuals before they get sick,” said David Rhew, MD, global chief medical officer for Microsoft, at a recent conference for health insurers. “The combination of a proactive care element and to be able to screen large populations using AI, which is not invasive, but is low-cost and highly efficient—that’s a transformative mechanism.”³

Though AI holds much potential for the healthcare industry, challenges remain, including relying on data that is often fragmented and may not be representative of the entire population requiring healthcare services.⁴ Its use in laboratory services specifically is still in the early stages, with PathAI playing a leading role in clinical adoption with its AISight platform becoming available for early adoption in the US and Europe last year.^5,6

According to a PathAI spokesperson, the AISight platform was created with “input from more than 200 pathologists and can be used to view, manage, and store pathology whole slide images. It is currently used by the world’s leading laboratories and research centers to power their digital pathology workflows and AI applications.”

Kristie Dolan, Quest’s vice president and general manager of oncology and pathology, notes in written comments to Lab Industry Advisor (LIA) that Quest “may also collaborate with PathAI in the future on AI algorithm development, informed by Quest’s deep expertise and data in pathology.”

PathAI chief executive officer Andy Beck, MD, indicates in written comments to LIA that the collaborations between the two companies are likely to extend over a long term.

“This is more than a sale of our laboratory to Quest. It’s an ongoing strategic relationship that marks a significant milestone for the anatomic pathology industry and signifies a major turning point for digital pathology adoption in the US,” Beck says.

“Quest and PathAI—collectively and independently—are committed to cutting-edge solutions that can help address the market’s need for more efficient and high-quality pathology operations. The PathAI Diagnostics laboratory,” he continues, “will allow Quest to accelerate its digital journey and ramp up its capabilities in AI with an already digitized laboratory.”

Over the longer term, Quest said that the deal “will enable it to deploy flexible digital slide preparation and diagnostic and second opinion consultation services to health systems and other providers, both in the United States and, through its global diagnostic network, overseas. The acquisition will also extend Quest’s anatomic pathology services into comparatively more profitable areas, including dermatopathology as well as gastrointestinal and urological diseases.”²

Aside from the various collaborations, the specific terms of the deal were not disclosed.

However, PathAI will remain an independent company, “at the forefront of developing AI technology for biopharmaceutical companies and pathology laboratories, and will continue to expand our software and algorithm business,” Beck says.

References:

1. 1. https://newsroom.questdiagnostics.com/2024-06-11-Quest-Diagnostics-Completes-Acquisition-of-Select-PathAI-Diagnostics-Lab-Assets-from-PathAI,-Accelerating-Adoption-of-AI-and-Digital-Pathology-to-Speed-Cancer-Diagnosis

1. 1. https://www.prnewswire.com/news-releases/quest-diagnostics-to-acquire-pathai-diagnostics-to-accelerate-ai-and-digital-pathology-adoption-in-cancer-diagnosis-forms-licensing-agreements-with-pathai-302132353.html

1. 1. https://www.ahip.org/conferences/ahip-2024/agenda?day=4#agenda

1. 1. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9955430/

1. 1. https://www.pathai.com/resources/pathai-announces-early-adoption-of-its-digital-pathology-platform-and-algorithms-by-leading-anatomic-pathology-laboratories/

1. https://www.pathai.com/resources/pathai-announces-early-access-program-to-drive-adoption-of-aisight-image-management-system-in-anatomic-pathology-laboratories-across-mainland-europe/

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