Sema4 pays $623 million to recover major diagnostics player and its data trove – Endpoints News

Sema4 sees a future where precision medicine is the standard of care and genetic testing is the key to making it happen. This is where GeneDx comes in.

Eric Schadt

The Stamford, Connecticut-based artificial intelligence company is investing up to $623 million to acquire GeneDx, a subsidiary of diagnostics company OPKO Health. After the deal closes next quarter, Sema4 chief Eric Schadt and GeneDx chief Katherine Stueland will team up as co-CEOs, with the goal of serving both patients and partners pharmaceuticals with machine learning and genomic testing technology.

“Eric and I had our first coffee a few months ago, and it felt like everything was so complementary,” Stueland said. Terminal news. “I think this structure allows Eric and I, we can both work in our respective areas where we have strength.”

Katherine Stueland

While Stueland focuses on the diagnostics business and overall operational success, Schadt will focus on the overall data strategy, as well as opportunities to serve healthcare systems and drug developers. The plans have attracted interest from a list of investors – including Pfizer – who participated in a $200 million private placement that will close alongside the takeover next quarter.

“I think we have, as a company and as a culture, always started with data as the core capability that we want to grow over time,” said Isaac Ro, CFO of Sema4. “I think if we look ahead to the next few years, it’s highly likely that any business in this space will need excellent NGS lab capability as a primary asset.”

Sema4 sees a variety of uses for its technology platform, ranging from matching patients to the most effective treatments, to identifying and prioritizing drug targets for development. Over the past few years, he has worked with a suite of Big Pharma players, including Sanofi, GlaxoSmithKline, Eli Lilly and J&J’s Janssen.

Meanwhile, GeneDx has become a leader in genomic testing since it was founded in 2000 by two NIH scientists. It brings over 300,000 clinical exomes and 2.1 million annotated phenotypes to bolster Sema4’s wealth of data.

isaac ro

“I think this transaction will accelerate this family of relationships while opening the door to a number of new ones,” Ro said. “And there is no doubt, as Eric pointed out, that rare diseases in particular are an extremely important area of ​​drug development where together we will have a much stronger franchise.”

Sema4 is disbursing $150 million in cash plus 80 million shares upfront, and potentially another $150 million in revenue-based milestones over the next two years. In total, the upfront payment is worth around $473 million.

“Even today, the mere thought of NGS testing is still a bit new,” Ro said. “That’s where you know, GeneDx is so compelling, because they’ve really – and I would say a bit quietly – developed what we think is the best solution for this.”

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