LabCorp Pays $106.7 Million for Monogram Biosciences in Personalized Medicine Play
Acquisition adds more companion diagnostics to LabCorp’s molecular test menu
Here’s another validation of the prediction that companion diagnostics will be a cornerstone of personalized medicine. Laboratory Corporation of America Holdings (NYSE: LH) of Burlington, North Carolina, said Tuesday (June 23) it would acquire Monogram Biosciences, Inc. (NASDAQ: MGRM) of South San Francisco, California. In an all cash deal totaling $106.7 million, LabCorp will pay $4.55 per share.
“Monogram Biosciences, Inc., has an excellent clinical reputation, a market leading infectious disease test, a market leading companion diagnostic, an exciting technology platform for oncology, and offers LabCorp a substantial growth opportunity,” said David P. King, LabCorp’s Chairman and Chief Executive Officer.
Monogram makes molecular diagnostic products, including the Trofile assay, which identifies patients who are eligible for the CCR5 class of HIV drugs and is the widely-adopted companion diagnostic for Pfizer’s HIV drug Selzentry.
In addition, Monogram offers two HIV tests, PhenoSense and PhenoSense GT, which measure individual patient’s viral drug resistance. Using these tests, physicians can develop treatment plans for individual patients.
Monogram also has developed VeraTag, which is used to assess HER-2 status in tissue samples and may be useful in helping physicians make treatment decisions for breast cancer patients. LabCorp said Monogram has multiple tests in development that are based on VeraTag to measure a variety of protein markers that could help guide physicians’ decisions about which cancer drugs to use for specific patients.
“The potential oncology pipeline associated with this technology is a natural extension of LabCorp’s existing oncology offerings for both clinical trials and commercial clients,” LabCorp said in a prepared statement.
For 2008, Monogram Biosciences had revenue of $34.4 million and posted a net loss of $11.6 million. Its losses for 2007 and 2006 were $23.5 million and $38.7 million, respectively. Monogram’s shares were trading under $2 in the weeks prior to today’s acquisition announcement. Thus, LabCorp’s offer of $4.55 per share of Monogram Bioscience demonstrates that Wall Street remains bullish on opportunities in molecular diagnostics and laboratory testing.
Pathologists and clinical laboratory managers will be interested in another aspect of this acquisition. It is an example of how the nation’s two largest testing laboratories will proactively use their financial clout to position themselves as preferred providers of companion diagnostics for the nation’s pharmaceutical industry. One consequence of this development is that pharma companies might establish policies with ordering physicians that limit the ability of local clinical labs and pathology groups to perform companion diagnostics for patent-protected therapeutic drugs.
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[...] the FDA approved OVA1 ovarian cancer test in Vermillion’s arsenal. If the rumors are true, then this will be the second diagnostic manufacture acquired in an all cash deal in the past five months. Back in June, LabCorp acquired Monogram Bioscience for $106.7 million in cash. This deal, if [...]
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