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LabCorp's $85M LipoScience buy deepens its dive into personalized Dx tests

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LabCorp CEO David King

LabCorp ($LH) said it will pay more than $85 million in cash for LipoScience ($LPDX) in a bid to grow its own roster of personalized diagnostic tests. The deal, which breaks down to $5.25 per share, is yet another sign that personalized medicine is becoming more ubiquitous in the marketplace.

If all goes well and all the regulatory approvals come through, the $85.3 million deal should close in the 2014 fourth quarter. LipoScience's board of directors has already unanimously approved the transaction and recommended stockholders sign off on it.

LabCorp Chairman and CEO David King explained in a statement that the purchase is meant to give a boost to his company's personalized diagnostic tests and programs already in play. LipoScience's claim to fame involves diagnostic tests based on nuclear magnetic resonance technology for cardiovascular, metabolic and other diseases. NMR LipoProfile is LipoScience's first FDA-cleared blood test, and it directly quantifies LDL-particle number so physicians gain more detailed data to manage heart disease.

"LipoScience's NMR LipoProfile test will enhance our innovative clinical decision support programs," King said, adding that the company's "novel" use of nuclear magnetic resonance imaging for diagnostics will help continue LabCorp's "leadership in scientific innovation."

King said the deal should be accretive to LabCorp earnings in the first year, and earn its cost of capital by the third year.

LabCorp's purchase of LipoScience is also an easy reach, as both companies are based in North Carolina, though LabCorp, with 34,000 employees around the world, is by far the bigger of the two.

LipoScience President and CEO Howard Doran

LipoScience President and CEO Howard Doran said in a statement that he sees LabCorp's purchase as helping a novel diagnostic product achieve maximum benefit for the healthcare system. Translated, by becoming part of LabCorp, LipoScience gains a greater market reach, but also more clout in terms of everything from globalization to insurance reimbursement. In other words, the deal should help the technology reach a lot more people.

"We believe LipoScience becoming part of LabCorp is a great outcome for patients, physicians and our other stakeholders," Doran said. He noted that NMR LipoProfile is the only FDA-cleared test of its kind focused on LDL-particle number "that offers actionable information for physicians and patients in the management of cardiovascular disease."

The agreement is also LabCorp's latest attempt to modernize its diagnostic products offerings. In August, LabCorp rolled out a new prenatal genetic screening test of its own, entering a market already packed with several rivals. The company also recently launched Enlighten Health Genomics, a new business designed to explore the diagnostic potential of next-generation sequencing technology.

- read the release

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