Quest Diagnostics, a provider of diagnostic information services based in Seacaucus, New Jersey, has acquired Haystack Oncology, an early-stage oncology company based in Baltimore, Maryland, for $300 million in cash.
Quest will also pay up to an additional $150 million in future performance milestones. The transaction is expected to be completed in the second quarter, pending regulatory approval.
According to Quest, the acquisition will take advantage of its expertise and scale in oncology, genomics, and pathology.
Quest currently employs approximately 400 pathologists through its AmeriPath specialty pathology-diagnostics business and provides approximately 7,000 patient access points in the United States for blood and other specimen collection.
It also has expertise in next-generation tumor sequencing that can identify patient-specific mutations for Haystack’s tumor-informed MRD approach.
Quest serves a broad swath of providers and connects with nearly 850 electronic health records systems, supporting convenient electronic longitudinal MRD reporting.
Haystack Oncology, led by CEO and President Dan Edelstein, uses ctDNA detection technology to report residual, recurrent, or resistant disease earlier and deliver the right treatment to the right person at the right time.
Following the acquisition, Quest plans to adapt the MRD test developed at Haystack as the basis for new clinical lab services available beginning in 2024, with development efforts initially focused on MRD tests for colorectal, breast, and lung cancers.
Quest expects the acquisition to be modestly dilutive to earnings over the next three years and accretive by 2026. The deal is expected to bolster Quest’s oncology offerings, which have been a key area of focus for the company in recent years.
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