Labcorp To Buy PGDx For $575 Million
Labcorp (Burlington, NC) has agreed to acquire Personal Genome Diagnostics Inc. (PGDx-Baltimore, MD) for $450 million in cash at closing plus up to an additional $125 million based on future performance milestones. The transaction is expected to close in the first half of 2022.
PGDx was founded in 2010 by two cancer scientists, Luis Diaz, MD, and Victor Velculescu, MD, PhD, from Johns Hopkins University. The company received FDA clearance to market its comprehensive tumor profiling test kit, PGDx ELIO tissue complete, in May 2020. The test analyzes 505 genes
from FFPE tissue samples from advanced cancer patients to inform treatment decisions for 35 solid tumor types. PGDx ELIO is covered by Medicare under the PLA code 0250U at a rate of $2,920.
PGDx, which has 114 employees, recorded revenue of approximately $22 million in 2021. Revenue is expected to grow nearly 82% to $40 million in 2022. Labcorp expects the acquisition of PGDx to negatively impact its earnings slightly over the next couple of years, but provide returns in excess of the cost of capital by year five.
PGDx had raised more than $200 million from outside investors, including New Enterprise Associates, Bristol-Myers Squibb and Cowen Healthcare Investments.