Quest Diagnostics (NYSE: DGX), a Secaucus, NJ-based diagnostic information services provider, has announced the acquisition of Baltimore, MD-based early-stage oncology company Haystack Oncology. According to the terms of the agreement, Quest will pay $300 million in cash at closing, net of cash acquired, and up to an additional $150 million based on the achievement of future performance milestones. The company anticipates the acquisition will be modestly dilutive to earnings over the next three years and accretive by 2026. The transaction is expected to be completed in the second quarter, subject to customary regulatory review.
This acquisition will enhance Quest’s expertise and scale in the fields of oncology, genomics, and pathology. With approximately 400 pathologists working through its AmeriPath specialty pathology-diagnostics business, Quest provides around 7,000 patient access points in the United States for blood and other specimen collection. Additionally, Quest’s proficiency in next-generation tumor sequencing includes the ability to identify patient-specific mutations for Haystack’s tumor-informed MRD approach. Quest also serves a wide range of providers and connects with nearly 850 electronic health records systems, facilitating convenient electronic longitudinal MRD reporting.
Haystack Oncology, led by CEO and President Dan Edelstein, utilizes ctDNA detection technology to measure ctDNA levels in blood, enabling the reporting of residual, recurrent, or resistant disease earlier, and delivering the appropriate treatment to the right patient at the right time.
Following the acquisition’s closure, Quest plans to adapt the MRD test developed by Haystack as the foundation for new clinical lab services available starting in 2024. Initial development efforts will concentrate on MRD tests for colorectal, breast, and lung cancers.