The genetic testing company NeoGenomics has acquired Human Longevity’s oncology division, which provides next-generation sequencing services.
The division of San Diego-based Human Longevity generated approximately $10 million in revenue in 2019—an amount NeoGenomics (NASDAQ: NEO) thinks it can grow by nearly 50 percent, says Charlie Eidson, investor relations and corporate development analyst, NeoGenomics. Additionally, the oncology division closed out the year with a backlog of approximately $15 million worth of signed contracts.
According to Eidson, the deal boosts NeoGenomics’s pharma services and next-generation sequencing capabilities, two areas of high growth. This includes germ line testing as well as whole genome and exome panels. The Fort Myers, FL-based company also will gain access to six NovaSeq sequencers from Illumina.
“It’s exciting new technology that pharma is using on the research side,” says Eidson, noting that the acquisition also expands NeoGenomics’ partnership reach and its ability to cross-sell its legacy accounts.
Additionally, the acquisition was attractive from a valuation perspective due in part to NeoGenomics’ ability to act fast and bring cash, following its equity raise last May, adds Eidson.
In 2018, NeoGenomics acquired the cancer testing laboratory Genoptix for $125 million in order to add scale to its diagnostics business, which makes up the majority of its work.
This space has grown increasingly crowded largely due to a growing number of targeted therapies being brought to the market. 2020 will be a big year for ArcherDX, the company’s CEO Jason Myers recently told us, speaking to this focus on testing. The company, which is developing a companion diagnostics platform, in late 2019 raised $55 million in a Series C funding round, joining several other companies racking in money last year.
In perhaps the biggest diagnostics deal of the year, Exact Sciences in July acquired Genomic Health for $2.8 billion in cash and stock.