Is ViraCor-IBT Labs Merger a Redux of the LabCorp-Monogram Deal?

By Kirell Lakhman

ViraCor Laboratories, a clinical lab specializing in infectious diseases, plans to merge with IBT Laboratories, a clinical-diagnostics and biomedical-research lab specializing in immunology and allergy assays, the firms said late yesterday.

The short take-home on the deal is that, with IBT on board, ViraCor gets a ready-made R&D shop that develops novel immunology and infectious-disease assays for clinical labs.

The two shops have made names for themselves in the clinical lab community in two very different ways: ViraCor has developed the first commercially available real-time quantitative PCR test for adenovirus, BK virus, and JC virus, among others.

IBT, on the other hand, has experience in innate immunity, immunogenicity, immune monitoring, immunogenomics, and allergy, and it provides biopharmas with a "broad range" of tests "to support exploratory testing through Phase IV clinical trials," particularly evaluating immunogenicity, hypersensitivity and adverse immune stimulation.

IBT also has experience with RT-PCR, qPCR, microbead arrays, ELISA, flow cytometry, RIA, Elispot, and other molecular technologies, and "can apply this knowledge to the analysis of immunogenicity, biomarkers, immune mediators, neutralizing antibodies and vaccine-induced immune response."

Does the deal sound familiar? The most prominent likeness is to LabCorp's impending $107 million acquisition of Monogram Biosciences, whose formal tender offer process began today. Together, the acquisitions reflect a growing belief among some clinical labs that they can get a leg up on rivals by buying shops that R&D their own assays in-house, and by using their technologies and expertise to help pharmas improve their drug-discovery efforts.

LabCorp's interest in Monogram is straightforward: Monogram has a tidy pipeline of pharmacogenomic tests, particularly those that help predict drug response for certain cancer and HIV drugs.

Monogram is also a leader, with pharma partner Pfizer, of simultaneously developing and filing for regulatory approval a drug and a companion diagnostic — the Holy Grail of molecular diagnostics. As part of that alliance, Pfizer's novel HIV drug Selzentry (maraviroc), which is indicated for treatment-experienced patients, is paired with Monogram's Trofile assay to help physicians predict which patients will respond to the drug.

The deal between Lee's Summit, Mo.-based ViraCor and Lenexa, Kan.-based IBT is a little different, though it shares a leitmotif with LabCorp-Monogram. For one thing, the new company will have a strong R&D base through which it could develop new assays to expand its test menu, particularly in the immunology and infectious diseases, rather than in-licensing tests from vendors, which can be costly. (Après-merger, the companies will will retain their names "as they consider the possibility of a new combined company name," according to a spokesperson for the firms.)

Also like the LabCorp-Monogram deal, the ViraCor-IBT merger could enable the resulting company to R&D assays for drug makers to use in clinical trials, just as Monogram had done with Pfizer.

To be sure, the end goal of both nuptials is not limited to the private sector. Dartmouth College's Hitchcock Medical Center in Hanover, NH, scratch-built a CLIA-certified translational research lab for the purpose of R&Ding homebrews for the core clinical lab, according to its director, Greg Tsongalis

So far, because the TRL develops its tests with input from the clinical lab, QC has been streamlined and the lab is able to pocket around 75 percent of the costs it would have incurred had it bought vendor-made assays, Tsongalis says.

And longer-term, the relationship with the TRL and the clinical lab could affect how the medical center develops, prescribes, and performs clinical tests ― especially pharmacogenomic assays — Tsongalis says.

Because ViraCor and IBT are privately held, the financial details of their merger were not disclosed. However, the companies said the new shop will employ more than 200 people who serve more than 4,000 physicians, hospitals, commercial labs, and biopharmas.