Conference on May 5 about clinical laboratory and pathology mergers and acquisitions
For owners and sellers of clinical laboratories and anatomic pathology groups in the United States, the past six months have been rosy times. That’s because buyers have stepped up and paid strong prices for the medical laboratory companies and pathology testing firms that came to market during this time.
Experts predict that merger and acquisition (M&A) activity in the clinical laboratory industry will continue to be robust. Several factors reinforce this optimistic prediction.
Cancer Testing and Molecular Diagnostics Are Main Drivers in This Transaction
In a deal with implications for independent clinical pathology laboratories, pharmaceutical giant Novartis (NYSE: NVS) announced that it would acquire pathology testing company Genoptix, Inc. (NASDAQ: GXDX). Novartis will pay $470 million in cash to acquire all the shares of Genoptix.
Although the total amount of $470 million to be paid for Genoptix is nearly one-half billion dollars, one financial analyst who quickly responded to the news believes that Novartis did not pay a premium price for Genoptix. At William Blair & Company, Analyst Amanda Murphy, CFA, wrote that “…the valuation [of Genoptix] is below what esoteric/specialty labs have been sold for in the past (closer to 10 times or more), which might reflect the company’s recent operational issues and/or potential reimbursement pressure from a shift to in-network status with payers.”
GE’s Acquisition Considered A Sign Of More Deals To Come In The Clinical Laboratory Industry
Here’s more confirmation that anatomic pathology continues to be a big target on the radar screen of big healthcare corporations and Wall Street investors. Today, GE Healthcare, a unit of General Electric Company (NYSE: GE), disclosed it will pay $587 million to acquire Clarient, Inc. (NASDAQ: CLRT), the medical testing laboratory.
For pathologists and clinical laboratory managers, this is further confirmation that GE—one of the world’s major players in molecular imagin and radiology—intends to combine molecular diagnostic technologies used in anatomic pathology with its molecular imaging technologies used in radiology. In the press release about the acquisition, GE wrote that the addition of Clairent would help it create “new integrated tools for the diagnosis and characterization of cancer.”