MDx and M&A Markets Experience Quiet Period

This failure is cause for concern and it has made everyone more cautious, especially those in smaller firms.

Not only did the number of deals dwindle, the size of the deals also became more modest. No acquisition in the second half of the year approached the USD 6.8 billion that Danaher (Washington DC, USA) agreed to pay in February to purchase Beckman Coulter (Brea, CA, USA).

Acquisitions during the second half of last year mostly consisted of small to mid-sized firms combining their businesses. The most high-profile transaction in the last six months of the year was probably PerkinElmer's (Waltham, MA, USA) acquisition of Caliper Life Sciences (Hopkinton, MA, USA).

Other active buyers were Thermo Fisher Scientific (Waltham, MA, USA), which made five purchases, and Agilent Technologies, which acquired four firms, including most recently Halo Genomics (Uppsala, Sweden) and BioSystem Development (Madison, WI, USA).

In the life science tools and 'omics space, M&A may be more pronounced in the future. Generally, there are more growth opportunities in the space than in the general IVD market, in part because the technologies that have been in development are now finally mature enough to be commercialized.

Pharmaceutical firms are becoming increasingly interested in the use of 'omics technologies to develop companion diagnostics for drugs. For example, Swiss pharma Novartis created a molecular diagnostics unit three years ago to focus specifically on developing diagnostics for determining which patients could benefit from certain drugs.

Investment bank Goldman Sachs (London, United Kingdom) also anticipates a healthy rate of acquisitions in the near-term. In a report this month, analysts Isaac Ro and David Roman said that companies in the life science tools and diagnostics space have employed cash "more offensively in the form of M&A," as opposed to share repurchases in recent years.

Related Links:
National Institutes of Health
Goldman Sachs