#United States #oncology #Labcorp #BioReference Health #Burlington, North Carolina

Labcorp to Acquire Select Assets from BioReference Health

In a significant move aimed at reinforcing its leadership in oncology, Labcorp has announced its plan to acquire select assets from BioReference Health, a subsidiary of OPKO Health. This transaction not only boosts Labcorp's portfolio but also enhances access to high-quality clinical testing services for patients and healthcare professionals alike.

Overview of the Acquisition

The agreement, revealed on March 11, 2025, emphasizes Labcorp's commitment to expanding its capabilities in oncology and related clinical testing services across the United States. Through this acquisition, Labcorp will gain access to BioReference Health's laboratory testing businesses and certain customer accounts. This underscores Labcorp's dedication to improving cancer care through innovative diagnostic solutions.

Mark Schroeder, the Executive Vice President and President of Diagnostics Laboratories at Labcorp, highlighted the importance of this strategic acquisition, stating, "By integrating BioReference Health's oncology and related clinical testing services into our portfolio, we're providing greater access to our world-class services to patients, physicians, and healthcare providers across the country."

The deal will not only enhance Labcorp's existing offerings but also represents a step forward in its strategic vision to lead in oncology. This acquisition will boost Labcorp's already extensive diagnostic test portfolio, which is essential in cancer treatment and management.

Financial Details

The assets Labcorp aims to acquire reportedly generate between $85 million and $100 million in annual revenue, indicating a strong financial foundation. The total purchase price for this transaction is projected to be up to $225 million, comprising $192.5 million payable at closing and a potential earnout of $32.5 million based on performance metrics.

Labcorp anticipates that this acquisition will be accretive to its earnings in the first year following the deal's closure. This aligns perfectly with Labcorp's strategic and financial goals, allowing for profound implications in its operations and market position.

Future Outlook for BioReference Health

Post-transaction, BioReference Health will retain its core clinical testing services primarily focused in the New York and New Jersey regions. This will allow them to continue leveraging their proprietary 4Kscore test, crucial for urology, while maintaining their broader operational services. Phillip Frost, the Chairman and CEO of OPKO Health, mentioned that this move is pivotal for streamlining BioReference Health’s operations and achieving overall profitability.

For the year 2024, BioReference Health's operations, maintaining its clinical testing services, are expected to yield around $300 million in revenue. This positions BioReference health well for future growth, while continuing service provisions to its existing clientele.

Conclusion

The transaction between Labcorp and OPKO Health marks significant progress in the laboratory services industry, particularly in oncology. Labcorp's acquisition of BioReference Health’s assets is poised to enhance their service offerings and improve patient outcomes in cancer care. With cancer treatment becoming increasingly complex, such partnerships are crucial in elevating the standard of diagnostic care and enabling healthcare providers to make informed treatment decisions. The deal is subject to customary closing conditions and state regulatory approvals, and it’s expected to finalize in the latter half of 2025. The journey toward redefining oncology services and improving patient access to essential testing is energized by Labcorp's strategic vision and operational excellence.