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Jun 18, 2007
 |  BioCentury  |  Strategy

Surviving the MDx challenge

Molecular diagnostics companies have demonstrated robust growth in the last few years and as a result two of the four leading companies are being acquired. As with therapeutic companies, the question is whether as any of the leading entrepreneurial MDx companies reaches critical mass, it will be acquired.

Earlier this month, Digene Corp. (DIGE, Gaithersburg, Md.) announced a $1.6 billion merger with Qiagen N.V. (FSE:QIA; QGEN, Venlo, the Netherlands), the European sample and assay technologies company. The deal comes hot on the heels of a $1.6 billion offer for Biosite Inc. (BSTE, San Diego, Calif.) by Inverness Medical Innovations Inc. (IMA, Waltham, Mass.), following a protracted bidding war that involved eight suitors.

The takeouts come as these MDx players and others began to reach market caps rivaling those of emerging bellwethers in the therapeutics space, and were looking for ways to leverage into more rarified valuations (see BioCentury, July 10, 2006).

According to Daryl Faulkner, who has been president and CEO of DIGE since last December, the merger will allow his company to increase its product offering, develop a next-generation instrumentation platform, and increase global market reach much faster than it could have done on its own.

"We could probably shave two to three years off the strategy by making this combination," Faulkner said on the conference call to discuss the merger.

Before QIA's bid, DIGE had been planning to use revenues from its hc2 High-Risk HPV DNA Test, also known as the DigeneHPV test and DNAwithPap test, to finance both organic development and potential in-licensing and/or acquisitions. Historically, the company has focused much...

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