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| Roland Diggelmann, COO of Roche Diagnostics Global--Courtesy of Roche |
Roche ($RHHBY) is diving into the prenatal testing business, snatching up Ariosa Diagnostics to expand its diagnostics offerings and to get its hands on the company's noninvasive prenatal test for genetic abnormalities.
The Swiss drugmaker will acquire San Jose, CA-based Ariosa for an undisclosed sum, gaining access to the company's Harmony Prenatal blood test. Harmony, which can be used as early as 10 weeks into pregnancy, evaluates cell-free DNA (cfDNA) that floats in the maternal bloodstream to detect genetic abnormalities such as Down syndrome. The test provides an alternative to traditional screening methods, which return false-positive results up to 5% of the time. Ariosa's test has a false-positive rate of less than 0.1%, Roche said in a statement.
"The acquisition of Ariosa is another example of Roche's commitment to advanced molecular diagnostics," Roland Diggelmann, COO of Roche's Diagnostics Division, said in a statement. "Circulating cfDNA has the promise of providing early diagnostic information through a simple blood test in many important segments including pregnancy, cancer and transplantation, aligning with our strategy in personalized healthcare and commitment to setting new standards of care."
The companies expect to close the deal this month.
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| Ariosa's Harmony prenatal test--Courtesy of Ariosa Diagnostics |
Roche's purchase could provide a breath of fresh air for Ariosa, as the company recently slammed the brakes on a planned $68 million IPO. In April, the prenatal testing outfit removed all financial details from an updated S-1 about its potential offering and did not disclose a reason for its move. Ariosa planned to use funds raised from an IPO to beef up commercialization for its Harmony test, it said in an earlier statement. The company launched its kit in 2012 and raked in $53.3 million in revenue last year.
The acquisition also helps Roche grab a bigger piece of a growing market: The prenatal diagnostics industry is poised to grow to $3.6 billion by 2019 and demand for prenatal tests is set to triple over the next 6 years, according to recent market research. Ariosa faces fierce competition from rivals Illumina ($ILMN), Sequenom ($SQNM) and Natera, which are all hard at work on their own prenatal diagnostics.
Last November, Ariosa, Illumina's Verinata Health and Natera scored deals to provide diagnostic testing to California women through the state's prenatal screening program. While the companies did not disclose financial details, Verinata noted in an earlier statement that the state's prenatal program is the largest of its kind and screens close to 400,000 women each year, opening the door to wider patient access.
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