2021 Closes with Two Major Lab Industry Events

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Normally, the time around Christmas and New Year passes quietly, typically without any significant developments. Such was not the case for the clinical laboratory industry in the last month of 2021 because of two announcements, each of which confirms ongoing market trends in healthcare and the lab testing industry. 

The first announcement was on Dec. 14 when XIFIN, Inc., of San Diego, revealed its agreement to acquire OmniSYS, Inc., of Dallas, a company that provides information services and products to 30,000 retail pharmacies across the United States. A purchase price was not disclosed. (See this article.) 

The second announcement was made by San Diego-based Quidel Corporation on Dec. 23. It broke the news that it had an agreement to acquire Ortho Clinical Diagnostics of Raritan, N.J., for a purchase price of $6 billion. Once this deal closes, Quidel will become one of the 10 largest in vitro diagnostics (IVD) companies in the world, with combined annual revenue of about $5.2 billion. (See this article.) 

Quidel’s acquisition of Ortho Clinical continues a multi-decade trend of bigger IVD corporations purchasing smaller diagnostics companies. In this case, however, both companies were of a similar size. Since it was spun off by parent company Johnson & Johnson in 2014, Ortho Clinical has struggled to show sustained growth in revenue and profitability. Quidel offered a 25% premium over Ortho Clinical’s share price and that proved to be attractive to Ortho Clinical’s shareholders, who voted to accept the deal. 

By contrast, XIFIN’s purchase of OmniSYS represents a major foray into the retail pharmacy marketplace. As you will read in our briefing about this development, XIFIN recognizes that retail pharmacies are expanding their point-of-care testing services to their customers—and COVID-19 testing provided by pharmacies is accelerating this process. The ongoing construction of primary care clinics within retail pharmacies is another factor that XIFIN recognized. Because OmniSYS already provides information and patient-oriented services to 30,000 pharmacies, XIFIN is confident that it has a pathway to encourage these pharmacies to use its competencies in handling lab data and revenue cycle management. It could prove that XIFIN’s acquisition of OmniSYS was the perfect entry point into serving retail pharmacies. 

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