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Sema4 to Acquire GeneDx for $623M

NEW YORK – Sema4 said Tuesday that it will acquire GeneDx from Opko Health for approximately $623 million in cash, stock consideration, and milestone payments.

Additionally, Stamford, Connecticut-based Sema4 said that it has reached agreements with institutional investors including Pfizer for a $200 million private placement of Class A shares. The firm expects both deals to close concurrently during the second quarter.

Under the terms of the acquisition, Sema4 will pay Opko $150 million upfront in cash along with 80 million shares of its stock. Up to an additional $150 million in revenue-based milestone payments may be paid to Opko during the next two years. Based on Sema4's stock price as of Jan. 14, the total upfront consideration is about $473 million. Including the milestone payments, the price tag for the deal is approximately $623 million.

"This acquisition gives us the opportunity to accelerate the use of genomics as standard of care by providing a deeper menu of precision medicine solutions to our health system partners to better meet their clinical needs," Sema4 founder and CEO Eric Schadt said in a statement. "Adding GeneDx’s comprehensive dataset and capabilities to our offerings enables us to inform on an even broader range of diseases, further closing the gap between the practice of medicine and the availability of more clinically actionable guidance."

As part of the merger, GeneDx CEO Katherine Stueland will become co-CEO and a director of Sema4, serving alongside Schadt.

Sema4 also provided full-year 2022 guidance, estimating total revenue of between $215 million and $225 million, which would represent 23 to 29 percent growth over its most recent guidance for 2021. The 2022 figures exclude revenue derived from COVID-19 testing. The firm said last month that it will discontinue COVID-19 testing services no later than March 31.

The combined Sema4 and GeneDx is expected to generate about $350 million in pro forma revenue in 2022, the firms said. Sema4 expects to complete more than 350,000 molecular tests this year, excluding COVID-19 tests.

With the sale, Opko Health is largely exiting day-to-day activity in molecular diagnostics, though the Miami-based company will have a "significant equity stake" in Sema4 when the deal closes, according to Phillip Frost, chairman and CEO of Opko Health.

"We believe the sale of GeneDx to Sema4 will unlock untapped value and maximize the value of GeneDx for the benefit of Opko shareholders," Frost added.

Opko Health picked up GeneDx when it acquired BioReference Laboratories in 2015. BRL had owned GeneDx since 2006.

Without this molecular diagnostics division, Opko will be left with other clinical diagnostics assets still branded as BioReference, as well as a strong pharmaceutical development business. Last month, the US Food and Drug Administration approved Opko's 4KScore test for prostate cancer.

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