Hologic to Buy Cancer Test Maker Biotheranostics for $230M

Hologic Inc. has agreed to acquire Biotheranostics Inc., a privately held, commercial-stage company that provides molecular diagnostic tests for breast and metastatic cancers, for approximately $230 million, subject to working capital and other customary closing adjustments.
 
“Acquiring Biotheranostics enables us to jump-start our entry into a large, fast-growing oncology adjacency that fits perfectly with our broader corporate focus and passion for women’s health,” said Kevin Thornal, Hologic’s Division President, Diagnostics. “Together with the Biotheranostics team, we can leverage our commercial capabilities and expertise in molecular diagnostics automation to accelerate growth, help physicians make more informed decisions, and deliver more personalized treatment and better clinical outcomes for more women. In addition, Biotheranostics’ CLIA (Clinical Laboratory Improvement Amendments) lab provides us new capabilities to help accelerate market development for innovative new tests.”
 
“We are thrilled that the Biotheranostics team will become part of Hologic’s diagnostic business,” said Don Hardison, Biotheranostics’ president and CEO. “Hologic’s leadership in women’s health and molecular automation will accelerate access for both of our novel, proprietary tests, translating into better clinical outcomes for cancer patients. For Breast Cancer Index (BCI), our long-held belief is that all women who are being treated with endocrine therapy for their breast cancer deserve to know what is right for them. Being part of Hologic only helps bring that hope closer to reality. In addition, patients facing the challenges of metastatic cancer will have broader access to our CancerTYPE ID offering that can aid in the diagnosis of the tumor type and subtypes representing 95 percent of all solid tumors.”
 
Both of Biotheranostics’ tests are PCR (polymerase chain reaction)-based gene expression tests that have been extensively validated in large studies in areas of oncology with critical unmet needs and high growth potential. The BCI test is included in several clinical practice guidelines for breast cancer, and both tests enjoy widespread reimbursement in the United States.
 
“Using our strong cash flow to further expand our core businesses into large, fast-growing adjacencies is a key goal of our capital deployment strategy,” said Steve MacMillan, Hologic’s Chairman, president, and CEO. “Acquiring Biotheranostics leverages our strengths in molecular diagnostics and complements our leadership in breast health, while providing attractive growth and return on invested capital.”
 
Biotheranostics generated approximately $33 million of revenue in calendar 2020. The acquisition is expected to be slightly dilutive to Hologic’s non-GAAP earnings per share in fiscal 2021, break-even in 2022, and accretive thereafter.
 
The acquisition is expected to close in February of 2021, subject to antitrust clearance and other customary closing conditions.