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Sema4 to Acquire GeneDx, Strengthening its AI-Driven Genomic and Clinical Data Platform

January 18, 2022

Sema4, an AI-driven genomic and clinical data intelligence platform company, said it will acquire genomic testing and analysis company GeneDx, a subsidiary of OPKO Health, for up to  $623 million, including cash, stock consideration, and potential milestone payments.

Photo: Eric Schadt, founder and CEO of Sema4

The acquisition strengthens Sema4’s leadership, growth, and scale for its health intelligence and genomic screening offerings and given GeneDx’s leadership in rare disease diagnostic and exome sequencing services, the combined company will be one of the largest and most advanced providers of genomic clinical testing in the United States with a projected $350 million in pro forma 2022 revenue.

Sema4 says the deal will position it to partner with health systems and biopharma companies to further transform the standard of care throughout the patient health journey. GeneDx’s rare disease diagnostic and exome sequencing services brings more than 300,000 clinical exomes and more than 2.1 million expertly annotated phenotypes to strengthen Sema4’s 12 million de-identified clinical records for Centrellis, its proprietary health intelligence platform, and Traversa, its comprehensive genomic analysis platform for optimizing health screenings. Sema4 plans to leverage this combined health information database to transform patient care and therapeutic development and enable precision medicine for all.

“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,” said Eric Schadt, founder and CEO of Sema4. “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.”

Under the terms of the agreement, Sema4 will acquire GeneDx for an upfront payment of $150 million in cash plus 80.0 million shares in Sema4, with up to an additional $150 million revenue-based milestones over the next two years (which will be payable in cash or Sema4 shares at Sema4’s discretion). Based on the closing stock price of Sema4 as of January 14, 2022, the total upfront consideration represents approximately $473 million, and the total aggregate consideration including potential milestones is approximately $623 million. The acquisition, which has been unanimously approved by the Boards of Directors of both Sema4 and OPKO, is expected to close in the second quarter of 2022, subject to customary closing conditions including approval by the stockholders of Sema4.

Katherine Stueland, president and CEO of GeneDx and former CCO of Invitae, will be appointed as Sema4 co-CEO and is expected to join the Sema4 Board of Directors upon completion of the acquisition. She will focus on the diagnostics business. Schadt will continue to serve Sema4 as co-CEO and as a member of the Board of Directors focusing on leading R&D and the IT platform components of Sema4, the strategic development of Sema4’s health intelligence capabilities, and partnerships with health systems and biopharma companies.

“The complementary fit between our teams, missions, and capabilities is strong,” said Stueland. “I’m looking forward to partnering with Eric to create an unrivaled family health and health intelligence company, supporting patients making healthcare decisions throughout their lives, from pregnancy and newborn health to adult rare disease, risk assessment, and cancer care.”

As part of the transaction, Sema4 also entered into definitive agreements for a $200 million private placement of Sema4 Class A shares from a syndicate of institutional investors, including Pfizer. The acquisition and the private placement are expected to close concurrently in the second quarter of 2022, subject to a Sema4 stockholder vote and other conditions to closing set forth in the definitive Transaction documents.

Author: Rare Daily Staff

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