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GeneDx to Offer Genome Interpretation as a Standalone Service Following Fabric Genomics Acquisition

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NEW YORK – Following the acquisition of Fabric Genomics, GeneDx plans to offer genomic interpretation as a standalone service, allowing it to capture more business opportunities in the US and abroad.

"We have predominantly been focused in the United States," GeneDx President and CEO Katherine Stueland said. "One of the most exciting opportunities for us [through the acquisition] is starting to drive utilization outside the US."

GeneDx announced the acquisition on Wednesday. It plans to buy Fabric Genomics for $33 million in cash upon closing and up to another $18 million if certain milestones are met.

So far, GeneDx has been running a centralized lab in Gaithersburg, Maryland, that provides sample-to-report genomic diagnostic services including variant analysis and interpretation, Stueland said. With Fabric's AI-powered genome analysis platform, GeneDx will be able to offer interpretation as a standalone service to customers for the first time, she noted.

One of the potential benefits of offering such a standalone service is that it will allow the company to capture business opportunities abroad without having to set up clinical sequencing labs locally, Stueland said. Some countries or regions of the world have regulatory requirements that require clinical samples to remain within the country or region, she explained.

Similarly, being able to provide standalone interpretation services will also expand the company's customer base in the US to labs that prefer performing sequencing in-house, Stueland noted.

Stueland said the company evaluated about 10 companies that provide genomic interpretation as a service since last year, including both technical as well as commercial analyses. Fabric "blew all of the others out of the water," she said.

For Fabric, the acquisition could lead to faster growth and more utilization of its software, given GeneDx's commercial footprint, said Martin Reese, Fabric Genomics' cofounder, president, and CEO. The company's flagship product is its Fabric Enterprise 3.0 platform, which offers automated variant analysis and interpretation using AI.

"For us, this is just an incredible opportunity," he said. "We were always a small company, and we did OK, but [the acquisition] allows us to bring our technology to literally 10 times, if not hundreds of times, more patients."

Another appeal for Fabric was GeneDx's large proprietary genomic database, Reese said.

According to Stueland, GeneDx has spent over a decade amassing a rare disease dataset of both genotypic and phenotypic data, including more than 750,000 exomes and genomes as well as over 6 million phenotypic data points.

"It's exactly the data that we need," Reese said, adding that it will help further train and improve Fabric's AI-powered analysis and interpretation software.

"GeneDx’s current interpretation platform is built around its best-in-class data asset," Craig-Hallum analyst Bill Bonello wrote in a research note. "The Fabric acquisition will enable GeneDx to integrate its data asset into a turnkey software platform that can be directly integrated into clinical workflows."

Additionally, Reese said Fabric hopes to leverage GeneDx's existing integration with Epic Systems' electronic health records to help its software integrate into healthcare systems.

Following the acquisition, expected to close in the second quarter, Fabric will remain a standalone company for the time being and do "business as usual," Stueland said.

"We will do what we do right now — we will completely support our product roadmap and our existing customers," Reese noted, adding that the company will maintain its dry lab with variant scientists and a lab director that can produce and sign off on clinical reports.

Beyond that, Stueland said the first integration goal is to integrate GeneDx's dataset with Fabric's platform. Down the road, GeneDx also plans to integrate Fabric's software into GeneDx's centralized lab for variant interpretation, though she said the company does not have a concrete timeline for that yet.

Meanwhile, GeneDx will start to provide commercial support for Fabric's software both in the US and internationally, and the two companies' commercial teams will collaborate and promote Fabric's product after the acquisition. "This makes my sales team more than 10 times bigger," Reese noted, adding that Fabric currently has 35 full-time employees, about half working in commercial and operations.

Since rebranding from Sema4 in 2023, GeneDx has turned a page on several tumultuous years by focusing on whole-exome and whole-genome sequencing in pediatric patients. The company saw continuous growth over the last year, driven by strong demand for its testing services.

In 2024, the company's revenues grew 51 percent over the prior year, while its exome and genome testing revenues increased by 88 percent year over year. The company has also been profitable since Q3 2024. 

Fabric Genomics changed its name from Omicia in March 2017. The company has partnerships with a slew of clinical next-generation sequencing labs, including Broad Clinical Labs and Rady Children's Institute for Genomic Medicine, to provide automated interpretation and reporting services.

By Bonello's estimate, Fabric currently generates around $5 million in annual revenues and has "a portfolio focused on heritable rare diseases and hereditary cancer."

"We expect it will take some time after the closing of the transaction for GeneDx’s data asset to be fully integrated into the Fabric platform so that the combined offering can be rolled out commercially," Bonello noted.