Luminex Agrees to Acquire GenturaDx

Austin, Texas-based Luminex Corp. has experienced a big dip in stock price after it announced a deal to acquire molecular diagnostics company GenturaDx. The deal is valued at $50 million, with Luminex purchasing all outstanding shares of GenturaDx in cash. Luminex noted that the deal would add $6 million to annual operating expenses, and may incur additional costs in the future.

JP Morgan analysts lowered investor confidence in a report released on July 9: “Given the move towards polymerase chain reaction-based platforms (with questionable return on invested capital) away from the company’s core multiplexing technology (similar to the Eragen acquisition last year), we continue to question the long-term growth prospects and valuation for the company’s core technology, particularly within clinical markets.”

Polymerase chain reaction, or PCR, is a technique in molecular biology used to amplify DNA samples for a variety of applications. GenturaDx focuses a lot on PCR-based technology, whilst Luminex’s core technology has been biological testing equipment using bead-based multiplexing for examining immunoassays. JP Morgan analysts have little faith in the prudence of Luminex moving towards a new technology. This lack of confidence triggered an 18 percent drop in share valuation after the announcement. Investors question the large purchase price and predicted rise in costs related to the acquisition.

“We are excited to have the opportunity to address the needs of a large market by expanding our instrument portfolio and integrating our MultiCode-RTx assays with this innovative platform,” said Patrick J. Balthrop, president and CEO of Luminex. “This acquisition accelerates the development of integrated sample processing capabilities for our technology, and aligns with our mission to reduce healthcare costs and improve clinical outcomes by providing innovative and affordable solutions to today’s clinical laboratories. The acquisition of GenturaDx builds on our strategic investments to date and positions the company to deliver ongoing growth by increasing our product portfolio, expanding our market opportunities and leveraging our leadership position.”

Based in Hayward, Calif., GenturaDx provides molecular diagnostic products and technology.

“Our proprietary technology provides a unique and unmatched alternative to current sample automation for PCR technology,” said Mark N.K. Bagnall, president and CEO of GenturaDx. “I am confident that Luminex will recognize significant strategic and economic benefit from this acquisition and am pleased that our expertise and technology will help to fuel continued growth of an established industry leader like Luminex.”