American Medical Laboratories Inc.
Division of Quest Diagnostics Inc.
Latest From American Medical Laboratories Inc.
In Vivo presents another installment of our quarterly review of dealmaking--in this case January to March 2002. Our data come from Windhover's Strategic Transactions Database. We include medical device financings by deal type; diagnostic financings by industry segment; pharma and biotech alliances by therapeutic category and industry segment; pharma and biotech financings by market segment, and pharma and biotech M&A.
Quest Diagnostics' purchase of American Medical Laboratories for $500 million in cash (including assumption of $160 million in debt) is one of a string of acquisitions made by large national laboratories in recent years. While it is by no means Quest's biggest or most strategically critical deal, it gives the nation's largest clinical laboratory a presence in two markets in which it was weak or had no presence, and shores up its rapidly growing esoteric testing business. The deal also eliminates a competitor.
After spending a decade developing its technology and product development capabilities, centered on testing for human papillomavirus, the cause of cervical cancer, Digene Corp. is growing its top line and finally gaining visibility. Now, the question is whether it can validate its test clinically and secure its market position, which means dislodging an entrenched cytology infrastructure. If successful, the company could become a superstar. On the other hand, its proprietary position could be undermined by other cervical cancer markers that appear downstream of initial HPV infection and have a higher correlation with disease. And Digene's focus on the HPV product opportunity has limited its efforts in developing its core technology at a time when other companies are dedicating significant resources to similar efforts.
Newly abundant genomic data is driving formation of all sorts of technology-based businesses. But markets for new tools are already chaotic and competitive, in part because customers know they've got many choices. Nanogen is in the thick of it. Pharmaceutical researchers weren't so interested in the firm's low-density gene chips, so the firm is now focusing on the clinical diagnostics market where managers believe flexible, accurate NanoChips will be better appreciated. The trouble is, the long-foretold market for molecular diagnostics still barely exists. On one hand, market immaturity spells opportunity for Nanogen as an early entrant, but it also means the company has to bushwhack a new path for its technology. It's not easy. For now, Nanogen is marketing its system to researchers in clinical diagnostic labs, university hospitals and government institutions-scientists at the cutting edge, who may become key content developers. The firm is also working to better serve drug makers. The company's customers display little loyalty yet: they're eager to try other new technologies too. Nanogen is betting that the superiority of its system will win hearts and minds as the market for molecular diagnostics takes shape.
- Contract Research, Toxicology Testing-CRO
- Therapeutic Areas
- North America
- Parent & Subsidiaries
- Quest Diagnostics Inc.
- Senior Management
Kenneth W Freeman, Chmn. & CEO
E. Craig Dawson, SR. EVP, COO
- Contact Info
American Medical Laboratories Inc.
Phone: (703) 802-6900
14225 Newbrook Drive
P.O. Box 10841
Chantilly, VA 20153-0841