Broader Access to Innovative Diagnostics
Improves Patient Outcomes and Accelerates Clinical Trials
Labcorp (NYSE: LH), a leading global life sciences company,
today announced that it has entered into a definitive agreement to
acquire Personal Genome Diagnostics Inc. (PGDx), a leader in cancer
genomics with a portfolio of comprehensive liquid biopsy and
tissue-based products.
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Photo courtesy of Labcorp
The addition of PGDx and its technology complements and
accelerates Labcorp’s existing liquid biopsy capabilities and
expands Labcorp’s leading oncology portfolio of next-generation
sequencing (NGS)-based genomic profiling capabilities, positioning
Labcorp at the forefront of driving better patient outcomes in
oncology. PGDx enhances Labcorp’s ability to increase access to
oncology care in the global community through kitted solutions that
allow hospital systems and laboratories to run these tests
internally, bringing precision diagnostics closer to the patient
and helping close a common gap in the delivery of cancer care.
Labcorp’s global reach also provides the opportunity to bring this
technology to pharmaceutical companies for clinical trial research
to advance cancer treatments, potentially impacting clinical
outcomes in millions of people with cancer.
“Labcorp’s leadership and scale in diagnostic testing and drug
development, coupled with PGDx’s innovative technology and suite of
capabilities, will accelerate access to personalized treatments for
cancer patients globally,” said Adam Schechter, chairman and CEO of
Labcorp. “PGDx’s comprehensive portfolio of next-generation
sequencing products will meaningfully add to our breadth of
capabilities, in line with our strategic priority to lead in
oncology. PGDx’s technology is well positioned in an important
segment with strong growth prospects. We look forward to welcoming
PGDx’s talented team and working together to bring world-class
diagnostics, technology and treatments within reach for all.”
Under the terms of the agreement, Labcorp will pay $450 million
in cash at closing and up to an additional $125 million on
achieving future performance milestones.
PGDx’s centralized and decentralized offerings will enhance the
scalability of the technology and support long-term growth across
Labcorp’s oncology portfolio, while also enabling Labcorp to
seamlessly offer oncology testing at every stage of care. PGDx
offers the only diagnostic kit cleared by the U.S. Food and Drug
Administration for pan-solid cancer comprehensive tumor profiling
using a 500+ gene panel.
Next-generation sequencing, including liquid biopsy, represents
the future of treatment and response monitoring in people with
cancer. Liquid biopsy testing can also eliminate the need for an
invasive biopsy procedure, reducing costs and improving patient
outcomes. When combined with cutting-edge data analysis
capabilities, NGS is the most advanced technology in the field
today for identifying the best therapy available for each patient.
As more cancer patients gain access to NGS testing, Labcorp will be
able to offer enriched, actionable and data-driven insights. These
insights can be used by pharmaceutical companies and cancer care
teams to accelerate patient recruitment for clinical trials and
identify patients eligible for approved treatments.
Overall demand for noninvasive tumor profiling and therapeutic
response monitoring is expected to grow significantly—largely
attributable to technological advances in the identification of
biomarkers utilizing NGS, applicability to companion diagnostics
and immuno-oncology solutions, and widespread government
support.
“We share Labcorp’s vision of improving health care decisions
and outcomes through science, data and a continued commitment to
innovation,” said Megan Bailey, CEO of PGDx. “For over a decade,
PGDx has made great progress toward that goal. As a part of the
Labcorp family, we have an incredible opportunity to broaden and
accelerate our impact on cancer care through Labcorp’s global
reach.”
The acquisition of PGDx is the latest development in Labcorp’s
long-standing commitment to integrate precision medicine into its
comprehensive offering of oncology solutions. Labcorp currently
offers OmniSeq INSIGHTSM, a NGS-based, precision medicine test for
solid tumors, IntelliGEN® Myeloid, a NGS-based precision medicine
test for myeloid malignancies, and hereditary cancer genetic
testing through VistaSeqSM. Labcorp also offers clonoSEQ®, the
first and only FDA-cleared assay for measurable, residual disease
detection, and Resolution ctDx Lung™, a non-invasive test for
patients with non-small-cell lung cancer.
PGDx 2021 revenues are expected to be approximately $22 million
and projected revenues for 2022 are expected to grow to nearly $40
million. The acquisition is expected to be slightly dilutive to
Labcorp’s adjusted earnings per share over the next couple of years
and provide returns in excess of its cost of capital by year
five.
The transaction is subject to customary closing conditions and
regulatory approvals, including under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended. The transaction is
expected to close in the first half of 2022. Hogan Lovells and
Kilpatrick Townsend acted as legal advisors to Labcorp. Cooley LLP
acted as legal advisor and Cowen acted as financial advisor to
PGDx.
About Labcorp
Labcorp is a leading global life sciences company that provides
vital information to help doctors, hospitals, pharmaceutical
companies, researchers, and patients make clear and confident
decisions. Through our unparalleled diagnostics and drug
development capabilities, we provide insights and accelerate
innovations to improve health and improve lives. With more than
70,000 employees, we serve clients in more than 100 countries.
Labcorp (NYSE: LH) reported revenue of $14 billion in FY2020. Learn
about Labcorp at www.Labcorp.com, or follow us on
LinkedIn and Twitter @Labcorp.
About PGDx
Since its founding in 2010, PGDx has empowered the fight against
cancer by unlocking actionable information from the genome to drive
biomarker informed treatment plans. The PGDx elio™ portfolio of
tissue-based and liquid biopsy comprehensive genomic solutions
enable personalized care for all patients by bringing precision
oncology testing to where they are. PGDx was established by
researchers from Johns Hopkins University who are pioneers in
cancer genome sequencing and liquid biopsy technologies.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains forward-looking statements,
including but not limited to statements with respect to the
transaction, the growth prospects of tumor profiling and
therapeutic response monitoring generally, the growth prospects of
PGDx’s technology specifically and the anticipated benefits of the
transaction when combined with Labcorp.
Each of the forward-looking statements is subject to change
based on various important factors, many of which are beyond the
company’s control, including without limitation, the risk that the
transaction may not be completed in a timely manner or at all;
expected timing to closing; the failure to satisfy the conditions
to closing the transaction, including the receipt of certain
regulatory approvals; the occurrence of any event, change or other
circumstance that could give rise to the termination of the
transaction agreement; the company’s ability to implement its
plans, forecasts and other expectations with respect to PGDx’s
technology after completion of the proposed transaction; the impact
of the COVID-19 pandemic and its impact on the company’s business
and financial condition and on general economic, business, and
market conditions; the company’s ability (or inability) to execute
on its plans to respond to the COVID-19 pandemic, competitive
actions and other unforeseen changes and general uncertainties in
the marketplace; changes in government regulations; customer
purchasing decisions, including changes in payer regulations or
policies; other adverse actions of governmental and third-party
payers; changes in testing guidelines or recommendations; federal,
state, and local government responses to the COVID-19 pandemic; the
effect of public opinion on the company’s reputation; adverse
results in material litigation matters; the impact of changes in
tax laws and regulations; failure to maintain or develop customer
relationships; the company’s ability to develop or acquire new
products and adapt to technological changes; failure in information
technology, systems or data security; adverse weather conditions;
the number of revenue days in a financial period; employee
relations; personnel costs; and the effect of exchange rate
fluctuations. These factors, in some cases, have affected and in
the future (together with other factors) could affect the company’s
ability to implement the company’s business strategy and actual
results could differ materially from those suggested by these
forward-looking statements. As a result, readers are cautioned not
to place undue reliance on any forward-looking statements.
The company has no obligation to provide any updates to these
forward-looking statements even if its expectations change. All
forward-looking statements are expressly qualified in their
entirety by this cautionary statement. Further information on
potential factors, risks and uncertainties that could affect
operating and financial results is included in the company’s most
recent Annual Report on Form 10-K and subsequent Forms 10-Q,
including in each case under the heading RISK FACTORS, and in the
company’s other filings with the SEC. The information in this press
release should be read in conjunction with a review of the
company’s filings with the SEC including the information in the
company’s most recent Annual Report on Form 10-K, and subsequent
Forms 10-Q, under the heading MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211223005226/en/
Media: Christopher
Allman-Bradshaw – 336-436-8263 Media@Labcorp.com
Investors: Chas Cook –
336-436-5076 Investor@Labcorp.com
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