Data Shows How Dx Companies Are Growing Through M&A

Here is 2011 Deal Data from one of the leading data and news sites covering Diagnostics. Contact IVD News for details on all IVD deals for 2011.

Recent M&A examples from our focus diagnostic stocks are:

Luminex (LMNX) acquisition of EraGen for $34M.

Orasure (OSUR)Acquisition of DNA Genotek for $53M.

Acquisition of 62% controlling shares of Ipsogen by Qiagen(QGEN) at valuation of $101M.


Second Quarter 2011 Molecular Deals Summary

Source(s): IVDNews July 2011

The number of molecular deals announced in the 2Q jumped up to 49 from 36 announced in 1Q.  As has been occurring over the past 2 years the number of deals involving licensing of technology (in the Other category) has been dropping.  In contrast the number of product development deals has increased steadily and remains in the 12-20 deals per quarter.  One way to view this is the basic technologies associated with purification, stabilization, amplification, and detection have diffused widely into the clinical molecular field.  For example, the licensing of real-time PCR started shortly after 2002 and there are multiple sources for primers and probes to use for PCR applications.  PCR associated technology patents have started to expire.  The strategy is build menu.  In the IVD NEWS topic Molecular 80 there are 95+ firms vying for a space to compete in various segments.  The race is on to develop fully integrated systems with product menus.  Build menu, raise switching costs, expand distribution reach and increase entry barriers are key strategic tools.  Hopefully the winners will reap the rewards.  Product development is also being fueled by Pharma’s need for a companion diagnostic.
With the number of companies developing menu expanding the number of acquisitions move forward.  Three more molecular firms were acquired in 2Q.  At the same time the process of raising funds to primarily support operations and/or growth continues with 17 deals announced involving new funds.  Principal sources continue to be private placements (5) and grants (4).
Molecular diagnostics continues its global reach as 29 of the 47 deals announced involved one or both of the partners being x-U.S.  This percentage (62%) has been in line with the 60-67% over the past few years and is nearly identical to 1Q where 61% of the deals involved a least one non-U.S. partner.

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