Winding down COVID testing, Sema4 to make $623 million acquisition

Winding down COVID testing, Sema4 to make $623 million acquisition
Written by Publishing Team

With Sema4 ending its COVID testing partnership with the state this month, Stamford announced Tuesday that it will acquire another genetic testing company — a deal worth about $623 million that company officials said will create one of the nation’s largest and most advanced providers in its industry.

Sema4’s purchase of Maryland-based GeneDx — a subsidiary of drug and diagnostics provider OPKO Health — would be its largest ever deal. It will include a down payment of $150 million in cash, plus 80 million shares in Sima 4, plus up to $150 million in “revenue-based milestones” over the next two years.

The deal reflects the increasing use of genetic testing, an important tool for detecting and treating many diseases such as different types of cancer. Sema4 officials cited GeneDx sequencing and clinical reports of more than 300,000 exomes, referring to protein-coding regions of the genome. They also cited 2.1 million ‘expertly annotated’ phenotypes for GeneDX. The phenotype represents an individual’s observable traits, such as height, eye color and blood type, according to the National Human Genome Research Institute.

The dataset in GeneDx will leverage nearly 12 million clinical records for Sema4, including more than 500,000 records with ‘genomic profiles’.

“This acquisition gives us the opportunity to accelerate the use of genomics as a standard of care by providing a deeper menu of precision medicine solutions to our health system partners to better meet their clinical needs,” said Eric Schad, founder and CEO of Sema4, in a statement. “Adding GeneDx’s comprehensive data set and capabilities to our offerings enables us to report on a wider range of diseases, further bridging the gap between the practice of medicine and the availability of more clinically actionable guidelines.”

Over the past two years, Sema4 has become one of the largest providers of COVID-19 testing services in Connecticut. However, it announced last month that it intends to discontinue these services by March 31 and will stop providing them to its home state by the end of this month.

The company’s contracts with the state have sparked controversy because Sema4 investors include Oak HC/FT, a Greenwich-based venture capital firm founded by Governor Ned Lamont’s wife, Annie. Oak has twice invested in Sima 4, which has received millions of dollars from the state for COVID-19 testing.

Sema4 also announced Tuesday that as a result of the acquisition, GeneDx CEO and President Katherine Stoeland will become Sema4’s co-CEO, along with Schadt.

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