Qiagen has agreed to a $191 million deal to acquire STAT-Dx. The takeover will give Qiagen control of a pipeline of assay panels designed to diagnose infections affecting the respiratory and gastrointestinal systems.
STAT-Dx’s tests use its DiagCORE cartridges and accompanying analyzer. The single-use cartridges feature ports for swabs and tissue or liquid samples. After loading the cartridge, the user slots it into the analyzer. This consists of an operational module with a screen and one or more analytical modules. Each analytical module has a slot in the top for the DiagCORE cartridge.
Once the cartridge is inserted, the module reads its barcode and initiates sample processing actions such as mechanical cell disruption and nucleic acid purification. The processed sample is then fed into the cartridge’s chambers and analyzed using PCR to show which pathogens it contains. The results are displayed on the screen of the operational module after about one hour.
STAT-Dx is pitching the platform as a way to quickly resolve diagnostic uncertainties in point-of-care settings. The first applications of the technology are a respiratory panel that tests for 18 viruses and three bacteria and a gastrointestinal assay that tests for five viruses and 14 bacteria. Those tests are due to come to market in Europe in the second half of the year.
Qiagen thinks the technology addresses an unmet need and has applications beyond this initial value proposition.
“The system is designed for significantly more cost-efficient test processing as required by the current reimbursement environment,” Qiagen CEO Peer Schatz said in a statement. “Additional application areas for this system include companion diagnostics, quantitative analysis and immunoassay tests, offering customers a new level of flexibility and accurate diagnosis.”
Qiagen is paying $147 million upfront and committing to up to $44 million in regulatory and commercial milestones to buy STAT-Dx. In return, it expects to generate sales of $7 million this year and $30 million next year. Qiagen is aiming to bring the tests to market in the U.S. in 2019.
The potential for the U.S. regulatory process to prove more difficult than expected is among the aspects of the plan that has given analysts pause.
“We like the STAT-Dx acquisition as an entry into the high growth, potentially [multi-billion-dollar] syndromic testing market. Execution risks aside, notably for the U.S. with approvals 2019E, and scarce public data to support the claimed profile, we are inclined to give management the benefit of the doubt,” Jefferies analyst Peter Welford wrote in a note to investors.