Labcorp agrees to acquire Opko unit's cancer diagnostic assets, estimating a purchase price of up to $225 million.
Labcorp, a leading healthcare diagnostics company, has announced its acquisition of the oncology diagnostics businesses of BioReference Health for up to $225 million. This strategic move capitalizes on the trend of health systems selling lab assets to focus on their core clinical care services.
The deal, subject to state regulatory approvals, is expected to close in the second half of this year. The assets being acquired generate approximately $85 million to $100 million in annual revenue.
Labcorp's most significant recent acquisition was the medical genetics company Invitae, completed in late 2024 at a purchase price of $5.4 billion. This acquisition has notably strengthened Labcorp's capabilities in oncology and women’s health, particularly by integrating Invitae’s genetic screening and testing portfolio with Labcorp’s clinical diagnostics network.
While there are no specific mentions of recent Labcorp acquisitions in neurology and autoimmune diseases, the company has identified these sectors, along with oncology and women’s health, as high-growth testing areas where it wants to increase its laboratory service offerings.
The acquisition of BioReference Health's oncology diagnostics businesses is expected to be earnings accretive by late 2025. The financial details of this specific transaction, such as the initial payment, additional payment based on performance, and annual revenue generated by the assets, were not provided.
Labcorp spent about $839 million on acquisitions last year, with the Invitae deal being the major expense. The company also acquired the clinical and outreach businesses of Baystate Medical Center, Providence Medical Foundation, and Westpac Labs, although the financial details and the trend of health systems selling lab assets were not disclosed.
BioReference Health will maintain its core clinical testing services in the New York and New Jersey region. Meanwhile, it will have the ability to expand its urology franchise, which includes the 4Kscore blood test for prostate cancer screening.
In a statement, Labcorp's CEO, Adam Schechter, reaffirmed the company's ongoing pursuit of acquisition opportunities, particularly in specialty testing areas, and expressed confidence in a strong pipeline of potential deals ahead.
- The acquisition of BioReference Health's oncology diagnostics businesses by Labcorp signifies their continued growth in the medical technology (medtech) sector, particularly in diagnostics.
- The latest deal, expected to close in the second half of the year, is anticipated to boost Labcorp's annual earnings by late 2025, with approximately $85 million to $100 million in revenues from the acquired assets.
- While Labcorp has made significant strides in oncology and women’s health through acquisitions, it has identified neurology and autoimmune diseases as additional high-growth testing areas where it aims to increase its laboratory service offerings.
- Finance analysts are closely following Labcorp's pursuit of acquisition opportunities in specialty testing areas, with a strong pipeline of potential deals on the horizon, as indicated by the CEO, Adam Schechter.
