New Haven Register (Sunday) (New Haven, CT)
‘THIS ACQUISITION IS A GROWTH MOVE’
$623M deal highlights expansion of genomic-testing powerhouse Sema4
STAMFORD — Since its founding in 2017, Sema4 has become a major force in genomic testing, which is a vital tool for detecting and treating many diseases such as cancer.
In the past week, the Stamford company has demonstrated its ambition by announcing its largest-ever deal: An agreement to acquire the Marylandbased genomic-testing provider, GeneDx, for about $623 million.
Sema4 officials are bullish about the addition of a company that they believe will bolster its data prowess in areas such as women’s health and oncology. They are particularly keen to further develop those capabilities after the past two years when much of the firm’s work has focused on responding to the COVID-19 pandemic.
“This acquisition is a growth move,” Sema4 founder and CEO Eric Schadt said in an interview. “This is about growing both businesses and leveraging the different challenges and synergies that each of us delivers.”
‘A really good fit’
The acquisition reflects Sema4 officials’ longstanding interest in GeneDx. Founded in 2000 by two scientists from the National Institutes of Health, GeneDx today operates as a subsidiary of pharmaceuticaland-diagnostics
provider OPKO Health.
After Sema4 became a publicly traded company last year by combining with a “special purpose acquisition company (SPAC), it was well-positioned to make a major deal. When Sema4 completed the SPAC merger, it was valued at about $3 billion.
“We’ve known about GeneDx for quite some time,” Schadt said. “We tried even before the SPAC to explore a strategic partnership with GeneDx. It was driven by the completion of the SPAC, our already existing knowledge of GeneDx and having an investor base that was enthusiastic.”
Among the capabilities of
GeneDx that interested Sema4 was its expertise in rare-disease diagnostics and exomesequencing services. The firm has sequenced and clinically reported more than 300,000 exomes, which refer to the protein-coding regions of the genome. Sema4 officials also cited GeneDX’s 2.1 million “expertly annotated” phenotypes, which refer to individuals’ observable traits such as height, eye color and blood type.
GeneDx’s data repository will strengthen Sema4’s approximately 12 million clinical records, including more than 500,000 with “genomic profiles.” Since it was spun out of Mount Sinai Health System into its own company in 2017, Sema4 has emerged as a leader in genomic testing for various types of cancer and women’s health — including carrier screening, prenatal testing and newborn assessments.
Excluding COVID-19 tests, Sema4 estimates it processed at least 288,000 tests in 2021, equating to annual growth of at least 39 percent.
“It seemed evident that this was a really good fit for GeneDx to accomplish what I was hoping to — which is how do we help more patients,” GeneDx CEO and President Katherine Stueland said in an interview.
A number of biotechnology experts outside Sema4 and GeneDx are also enthusiastic about the acquisition. The combination of Sema4 and GeneDx could help in “bringing down drug costs and also making the drug-discovery process more efficient and increasing the number of treatments and cures identified every year,” said Paul Pescatello, executive director and senior counsel for the Connecticut Business & Industry Association’s Connecticut Bioscience Growth Council.
Phasing out COVID-19 testing
During the past two years, Sema4 has become one of Con