Already a monolith in the clinical testing space, Labcorp is aiming to further swell its testing capabilities with the acquisition of contract research organization Toxikon.
The CRO provides nonclinical testing services for pharma, biotech and medtech companies, supporting their safety and efficacy studies of new drugs and devices. The purchase by Labcorp, which already boasts a solid menu of nonclinical services itself, will allow it to further build out those offerings, Paul Kirchgraber, M.D. CEO of Labcorp Drug Development, said in a statement.
“This acquisition extends Labcorp’s portfolio of full-service drug development and medical device solutions from discovery to market approval,” Kirchgraber added.
The companies are expecting the acquisition to be finalized before the end of the year. Financial details of the deal weren’t disclosed, though Labcorp noted in its announcement that Toxikon rakes in annual revenues of around $40 million.
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Situating the Massachusetts-based CRO under the Labcorp umbrella will give the testing giant a stronger foothold specifically in the Boston area, a hotbed for biotech and pharma development. One such benefit will see Labcorp linking up with companies hoping to prove the safety of their technologies in submissions to the FDA for investigational device exemptions.
Toxikon’s suburban headquarters will serve as Labcorp’s home base in the region. According to the companies, the Bedford facility has room for growth, potentially giving Labcorp’s drug development sector space to expand its existing toxicology business.
In addition to boosting its new parent company’s nonclinical work in the region, Toxikon’s in vitro, in vivo and analytical testing capabilities are also expected to help build out the clinical services of Labcorp’s medical device and diagnostics business.
“As a part of the Labcorp family, we will have an opportunity to broaden our impact through access to extensive resources, knowledge and support,” said Laxman Desai, founder, president and CEO of Toxikon. “Together, we can provide better outcomes for our clients and, ultimately, the healthcare providers and patients who depend on our continued success and innovation.”
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The acquisition is Labcorp’s second of the year. In August, it inked a deal with Ovia Health, following its previous venture investments in the women’s health company. Ovia is developing a digital platform that helps users track their pregnancies and access postnatal educational resources about sleep training, breastfeeding and more. Labcorp said at the time that it’s aiming to embed Ovia’s platform into the testing services it already provides for new and expectant mothers.
The Toxikon buy is also preceded by a 2019 deal that saw Labcorp scoop up another CRO business focused on non-clinical services. At the time, it dropped $485 million to scoop up Envigo’s nonclinical segment and send its own research products business over to Envigo.