Eurofins Acquisitions Highlight Leading Growth Areas in Clinical Laboratory Services Market

Eurofins Acquisitions Highlight Leading Growth Areas in Clinical Laboratory Services Market

Eurofins Scientific, a leading global provider of “bioanalytical” laboratory testing services with projected 2014 revenue of approximately $1.7 billion, recently broadened its business activities into the clinical space with two acquisitions. The laboratory group’s traditional business activities are overwhelmingly within food and feed testing (~40% of revenue); pharmaceutical and biotechnology industry testing (40%); and environmental testing (20%). Eurofins already serves as a contract research organization (CRO) and genetics specialist performing sequencing, biomarker testing, other pharmacodiagnostic testing, genotyping, genomics services, and bioinformatics services for industry. The group’s two recent acquisitions can be placed on a continuum between clinical testing and its existing strength in CRO/biopharmaceutical laboratory services. Eurofins’ recent acquisitions have targeted specialty diagnostics and esoteric testing in particular under clinical lab testing.

In early December 2014, Eurofins Scientific acquired Boston Heart Diagnostics Corporation for $140 million. The U.S. laboratory company performs proprietary tests; formulates personalized wellness and preventative care programs based on algorithms incorporating testing results and patient data; and serves as a clinical laboratory for other routine and specialty testing related to cardiovascular health. Within the space of personalized medicine and companion diagnostics, cardiovascular health is secondary to oncology in terms of industry product offerings and development activities. However, Boston Heart’s recent performance suggests that cardiovascular companion diagnostics (CDx) or pharmacodiagnostics is just as deserving of industry attention: Boston Heart has grown at a CAGR of 75% since 2011 with projected revenue of $95 million in 2014.

Among the exclusive tests available from Boston Heart are its HDL Map Test (electrophoresis) that quantifies high-density cholesterol subpopulations; Cholesterol Balance Test (chromatography) for markers of cholesterol synthesis and absorption indicative of patient response to statin and ezetimibe therapy; and Statin Induced Myopathy (SLCO1B1) Genotype Test (molecular qPCR) to determine patient ability to safely metabolize statin drugs. Boston Heart provides Eurofins withimmediate capabilities in patient-centered genetic and clinical testing. Additional tests can also be developed that leverage Boston Heart and Eurofins’ combined experience and resources in genotyping and pharmacodiagnostics.

Eurofins’ acquisition of Boston Heart was preceded by its May 2014 purchase of ViraCor-IBT Laboratories, Inc. (VIBT), a specialty diagnostics testing company. The specialty clinical lab provides esoteric testing services including molecular testing for infectious diseases; immunology testing; allergy testing; and transplant diagnostics. The company also has broad bioanalytical capabilities applicable to industry testing related to drug development including biomarker testing, sequencing, and flow cytometry. VIBT’s extensive clinical client base - 550 institutional clients and over 4,000 clinicians - is a significant add to Eurofins’ operations.

Both acquisitions are expected to contribute to Eurofins’ existing core business serving pharmaceutical and biopharmaceutical industries, though the two new lab group members remain more conspicuously involved in specialty clinical lab testing. Eurofins’ newfound exposure to these markets is especially fortuitous as Kalorama Information expects the U.S. specialty and esoteric clinical lab testing services market to outperform the overall U.S. clinical lab services market. The two new Eurofins subsidiaries will add approximately $175 million in clinical and pharmaceutical testing revenue to Eurofins in 2014 with recent historical double-digit growth.

Kalorama Information offers a market overview of U.S. clinical lab testing services, including segmentation by routine and specialty testing, with Clinical Laboratory Services. Recently-published Companion Diagnostics Market provides in-depth analysis of CDx market segments including cardiovascular tests and products.