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OPKO inks definitive agreement to acquire Bio-Reference Laboratories
MIAMI—OPKO Health Inc. has inked a definitive merger agreement with Bio-Reference Laboratories Inc. under which it will acquire the latter company, a transaction expected to be completed in the second half of this year. Per the terms of the merger agreement, Bio-Reference stockholders will receive 2.75 shares of OPKO common stock for each share of Bio-Reference stock they hold, which, given OPKO's June 3 closing price of $19.12 per share, values the transaction at approximately $52.58 per share of Bio-Reference stock, or $1.47 billion. Both OPKO's and Bio-Reference's boards of directors have approved the deal, which is subject to Bio-Reference shareholder approval and customary closing conditions.
"Bio-Reference Laboratories has been a pioneer in commercial laboratory use of next-generation sequencing for diagnostic purposes,” stated Dr. Marc Grodman, chairman, president and CEO of Bio-Reference Laboratories. “GeneDx believes it was the first commercial laboratory in the world to offer next-generation genetic sequencing panels based on specific clinical symptoms; it has maintained its leadership position in offering advanced panels, sophisticated analysis, in-depth reporting and by scaling these tools to a high-volume commercial environment. Bio-Reference Laboratories has accumulated a plethora of genetic and genomics data that will be invaluable to the drug discovery programs at OPKO and other drug developers. The Bio-Reference Laboratories data is diagnostic, or disease-related, and therefore provides an important connection between disease, treatment and cure."
Bio-Reference Laboratories is one of the largest full-service diagnostic labs worldwide, with a presence in more than 50 countries, and includes GeneDx, its genetic sequencing laboratory, and GenPath Diagnostics, its oncology and women's health business units. Bio-Reference offers clinical testing services to physician offices, clinics, hospitals, long-term care facilities and employers as well as helping disease foundations, academic and pharmaceutical partners to advance drug discovery and development. The company's experience covers molecular diagnostics, anatomical pathology, women's health, oncology and rare disease genetics.
"I have long admired Bio-Reference Laboratories which, for almost 30 years, has enjoyed an impressive record of organic growth through constant innovation and clinical awareness," said Dr. Phillip Frost, OPKO's chairman and CEO, in a statement. "Bio-Reference Laboratories is a true success story that has culminated in cutting-edge diagnostic solutions accompanied by a worldwide franchise in the diagnosis of rare diseases. GeneDx was the first commercial laboratory to offer next-generation sequencing for rare disorders and almost a quarter of a million patients have benefited from these services, including almost 20,000 patients who have undergone exome analysis. Their newly introduced sequencing services for use in oncology are both innovative and impressive."
Following completion of the transaction, OPKO intends to allow Bio-Reference's laboratory operations to continue as usual, though with enhancement from OPKO's diagnostic product pipeline. OPKO's existing diagnostic services will be merged with Bio-Reference operations throughout the country. In addition, OPKO plans to make use of Bio-Reference's national marketing, sales and distribution resources to enhance sales of its 4Kscore test, a blood test that provides a patient's personalized risk score for aggressive prostate cancer, as well as other OPKO diagnostic products under development.
"Over the years we have learned that diagnostics are integral to drug discovery. This has never been more apparent than today, when new sequencing technologies have afforded us the opportunity to understand the biological basis of disease in far greater depth,” added Grodman. “At Bio-Reference Laboratories, we have prided ourselves in finding disruptive diagnostic solutions that are clinically relevant. Dr. Frost is a visionary in the pharmaceutical world who, during a legendary career, has demonstrated the foresight to see new clinical applications for therapeutics before others. I am thrilled that I will be working and learning from him in the coming years as we seek to leverage our outstanding capabilities to improve lives of patients. In addition to identifying a synergistic partner for the value we have built over the past three decades, we are pleased that our shareholders will be rewarded by being able to share in the upside of the combined company."
SOURCE: OPKO press release