Advanced IVD Market Trends a Driver of Mergers and Acquisitions: Report

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Apr 11, 2018, 07:52 ET

ROCKVILLE, Md., April 11, 2018 /PRNewswire/ -- As a means to more effectively address competitive pressures by capitalizing on economies of scale and scope, the in vitro diagnostics (IVD) industry continues to experience consolidations. Many of these transactions occur cross-border, particularly with U.S. and European companies seeking to enter Asia. Many also involve the acquisition of specific product lines or business units, rather than entire corporations. According to Kalorama Information, several of the newer technologies and trends in the in vitro diagnostics (IVD) market are helping to drive acquisitions. The healthcare market research firm's recent report, Mergers and Acquisitions in the IVD Market, records over 220 acquisitions in the IVD industry in total, featuring purchase arrangements from 2015 to March 2018.

"Acquisitions now often bring acquiring companies into market segments or approaches to market segments that are new and growing," said Bruce Carlson, Publisher of Kalorama Information. "As many major IVD companies have reported an average revenue growth of not more than 5% in established markets, they are seeking growth elsewhere."

Examples of these burgeoning market segments or new approaches to market segments being explored include the following:

Gene Editing
Liquid Biopsy
Microbiome Research
Connectivity
Looking to the East

M&A to Secure Gene Editing Leadership

It's been some 20 years since the birth of cloned Dolly the Sheep took the world by storm. A present day legacy of cloning technology is gene editing using CRISPR (clustered regularly interspaced short palindromic repeats). Cas9 is the protein that makes gene-editing work. Basically, Cas9 helps to snip out a piece of DNA at any point in an organism – including, for instance, viral or faulty DNA – and then enables the cell to stitch the ends back together. CRISPR/Cas9 is a revolutionary approach that enables rapid, economical model generation through precise genome editing.

The recent acquisition in February 2018 of Lucigen Corporation by LGC increases LGC's exposure to the next generation sequencing (NGS) and gene editing markets, as Lucigen is a developer, manufacturer, and supplier of molecular biology enzymes, reagents, and kits, featuring a portfolio of life science products including NGS kits, enzymes, competent cells, and cloning systems, targeting fast growth applications in clinical diagnostics, drug discovery, synthetic biology and gene editing.

M&A in the Liquid Biopsy Area

With the addition of Cepheid, Danaher will be able to pivot and keep pace with the diagnostics market as it shifts to advanced testing technologies such as liquid biopsy tests.

In February 2017, Bio-Rad Laboratories acquired RainDance Technologies (Billerica, MA), a leading digital droplet PCR developer. The company is now part of Bio-Rad's Life Science business segment. RainDance Technologies offers a proprietary droplet technology that enables research in areas such as non-invasive liquid biopsy.

M&A to Advance Microbiome Research

The continuous search of the etiology of diseases as part of the body's systemic response to change has led to a consideration of the gut microbiome as part of disease processes. While still in the early phase of development, a number of companies have developed assays for the study of the microbiome and there is a proliferation of microbiome related therapeutics.

In July 2017, Enterome (Paris, France) and Nestle Health Science formed Microbiome Diagnostics Partners, a new company to develop microbiome diagnostics for multiple indications, including inflammatory bowel disease and liver disorders. In this 50/50 joint venture between the companies, Enterome will contribute its existing microbiome diagnostic programs and intellectual property for use in all disease areas excluding immuno-oncology. Nestle Health Sciences will contribute the diagnostic development and commercialization expertise of its Prometheus Laboratories subsidiary.

M&A for Enhanced Connectivity

Connectivity is required for cloud computing. There has been an increase in the number of companies offering cloud-computing solutions, especially in the areas of health IT and mobile monitoring. Cloud computing is, in some regards, a newer term of an older process. Improved mobile devices, faster wireless connectivity, more efficient enterprise data centers, and advanced software have bolstered the use of cloud systems and turned it into a resource for the modern delivery of care.

In November 2016, Siemens Healthineers acquired Conworx Technology. Siemens Healthineers picked up Conworx Technology to flesh out its point-of-care informatics capabilities. Conworx becomes a new unit at Siemens, which will offer open connectivity for more than 100 point-of-care devices from major manufacturers.

Africa, Asia and Latin America

In an effort to maintain growth, IVD companies have begun to look to markets outside their home and traditional geographies. The major IVD companies have been active in Asia, Africa, and Latin America for some time and have increased their efforts there. This trend is fuelled primarily by the anticipated increase in the uptake of IVDs in emerging markets that are expected to grow by 10%-20% compared to an average of 5% in mature markets.

In January 2017, PerkinElmer acquired Tulip Diagnostics Private Ltd. (Goa, India). Tulip, with more than 1,200 full-time employees, is one of India's largest domestic providers of in-vitro diagnostic reagents, kits, and instruments. Tulip's solutions include products for the diagnosis of infectious diseases such as malaria, HIV and hepatitis. Tulip has manufacturing facilities in two locations (Goa and Uttarakhand) and 12 branch offices to support more than 30,000 customers and 1,000 distributors in India.

Mergers and Acquisitions in the IVD Market outlines approximately 152 purchase arrangements in 2015-2016 and 69 acquisitions in IVD and related segments so far from 2017 to March 2018. Among specific acquisitions discussed in the report are Abbott's acquisition of Alere and related divestures, Konica Minolta's entry into the health and life sciences space with the acquisition of Ambry Genetics, and Danaher's acquisition of molecular diagnostics leader Cepheid.

The IVD market should anticipate further mergers and acquisitions, as the U.S. tax legislation passed in December 2017 is expected to support increased M&A activity moving forward. Mergers and Acquisitions in the IVD Market can be found at: https://www.kaloramainformation.com/Mergers-Acquisitions-IVD-11556316/.

About Kalorama Information

Kalorama Information, a division of MarketResearch.com, supplies the latest in independent medical market research in diagnostics, biotech, pharmaceuticals, medical devices and healthcare; as well as a full range of custom research services. Reports can be purchased through Kalorama's website and are also available on www.marketresearch.com and www.profound.com.

We routinely assist the media with healthcare topics. Follow us on Twitter, LinkedIn and our blog on our company website: https://www.kaloramainformation.com/.

Press Contact:
Bruce Carlson
212 807 2262
[email protected]

SOURCE Kalorama Information