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Quest Diagnostics Aims to Leverage Blueprint Acquisition to Advance Genetic Testing Portfolio


NEW YORK – With its recent acquisition of Finnish molecular diagnostics firm Blueprint Genetics, Quest Diagnostics is looking to expand and improve its genetic testing portfolio.

The lab company was particularly interested in Blueprint's informatics capabilities, which Carrie Eglinton Manner, Quest's senior vice president of Advanced Diagnostics, said would enhance its existing genetic test offerings by improving variant interpretation and reporting.

"We have full next-generation sequencing services in a number of our labs," she said. "The capability that we are really excited about is their bioinformatics capability. Their bioinformatics has a depth and flexibility, including software engineering expertise, that we can apply to our entire portfolio… to help accelerate [bringing] test offerings to market as well as expanding growth for the company."

Blueprint has previously cited its investment in informatics, the clinical interpretation of test results, and the reporting of those results as attributes that distinguish it from its competitors.

During Quest's recent Q4 2019 earnings call, Steve Rusckowski, the company's chairman, president, and CEO, likewise, cited Blueprint's informatics capabilities, noting that the acquisition would strengthen Quest's position in advanced diagnostics "through proprietary bioinformatics, which is often a bottleneck in next-generation sequencing," and highlighted in particular Blueprint's tools for variant interpretation and reporting, which he said were "expected to significantly speed the average rate of time of interpretation."

Quest CFO Mark Guinan said during the call that Quest believed that in addition to helping the company win genetic testing business, the acquisition would "reduce the cost structure of other work we do in this space."

He added that while typically with acquisitions value creation comes "directly from the book of business we are buying," in the case of the Blueprint purchase "the value creation goes well beyond that book, and… the capabilities it brings will benefit everything we do in that space." As examples, he noted better margins and added competitiveness in markets out of a specific test menu and book of business that Quest is acquiring

In addition to Blueprint's informatics capabilities, the company brings more than 3,900 single-gene tests and more than 200 panel tests, Eglinton Manner said, including a rare disease portfolio that would complement Quest's existing offerings.

Helsinki-based Blueprint initially offered hereditary cardiology tests when it brought its first products to market in 2012 and has since expanded to offer tests covering 14 medical specialties. The company offers testing in more than 70 countries and operates a CLIA facility in Seattle serving US customers.

Rusckowski characterized the acquisition as part of Quest's larger push to drive its growth in advanced diagnostics, noting that the company's genetic and esoteric testing revenues were up roughly 5 percent in 2019.

He added that Quest currently does over $1 billion in annual revenues in advanced diagnostics. "We believe that that is prospectively a great opportunity for us to continue to invest in."

"Our customers and specialty providers have been telling us that they are eager for high quality, actionable insights out of genetic testing and that this is the future of healthcare, the future of precision medicine," Eglinton Manner said. "We thought [the acquisition] was a great combination of portfolio, capabilities, and cultural fit that bolsters our specialty expertise to serve the needs our customers were sharing with us."

She said Quest plans to keep Blueprint "largely independently operating out of Helsinki so that they can keep their momentum in specialty genetics and bioinformatics while tapping into our significant strengths in technology, innovation, science, and operations in the US."

Blueprint CEO Tommi Lehtonen will become vice president and general manager of Blueprint within Quest and will report to Eglinton Manner directly, she said.