Labcorp Bolsters Liquid Biopsy Capabilities With $450M PGDx Acquisition

Laboratory Corp of America Holdings LH has agreed to acquire Personal Genome Diagnostics Inc (PGDx), a cancer genomics firm with a portfolio of comprehensive liquid biopsy and tissue-based products.

• Labcorp will pay $450 million in cash at closing and up to an additional $125 million on achieving future performance milestones.
• The addition of PGDx complements & accelerates Labcorp’s existing liquid biopsy capabilities and expands its oncology portfolio of next-generation sequencing (NGS)-based genomic profiling capabilities. 
• PGDx offers the only diagnostic kit cleared by the FDA for pan-solid cancer comprehensive tumor profiling using a 500+ gene panel.
• PGDx 2021 revenues are expected to be approximately $22 million, with projected revenues for 2022 expected to be nearly $40 million. 
• Labcorp expects the acquisition to be slightly dilutive to its adjusted EPS over the next couple of years and provide returns over its cost of capital by year five.
• The transaction is expected to close in 1H of 2022. 
• Price Action: LH shares closed higher by 0.54% at $304.22 on Wednesday.