Quest Diagnostics to Acquire Haystack Oncology, Revolutionizing Cancer Detection Technology
As cancer continues to be a leading cause of death globally, the healthcare industry is constantly seeking ways to improve patient outcomes through early and accurate cancer detection. To this end, Quest Diagnostics (NYSE: DGX), a leading diagnostics and testing services provider, has announced its acquisition of Haystack Oncology, a company that specializes in minimal residual disease (MRD) cancer detection technology. The acquisition, which is expected to be completed by the second quarter of 2023, will combine Haystack’s highly sensitive MRD technology with Quest’s expertise and scale in oncology, genomics, and pathology.
What is MRD Technology?
MRD testing, a rapidly growing category of liquid biopsy tests, identifies circulating tumor DNA (ctDNA) in the bloodstream of patients after surgery and cancer treatment. Doctors usually monitor patients for signs of cancer recurrence, but biopsies and imaging are invasive, inconvenient, or expensive, while current laboratory tests are potentially nonspecific. MRD testing provides a new way, based on a simple blood test, to monitor residual or recurrent cancer longitudinally over time.
Haystack Oncology and Its MRD Detection Technology
Haystack Oncology, a company founded in 2021, has developed a ctDNA-based technology for MRD detection, specifically based on two decades of research by world-renowned luminaries at Johns Hopkins University, including Drs. Bert Vogelstein, Ken Kinzler, and Nick Papadopoulos. The company’s tumor-based MRD test is one of the best-positioned tests to deliver the right treatment to the right person at the right time. In June 2022, Haystack’s technology demonstrated the ability to better identify patients with residual disease for adjuvant chemotherapy after surgery for stage II colon cancer. It reduces the use of chemotherapy in the general population of patients without compromising survival without recurrence.
The Acquisition and Impact on Cancer Care
Quest Diagnostics expects to adapt the MRD test developed at Haystack as the foundation for new clinical laboratory services beginning in 2024. Development efforts will initially focus on MRD tests for colorectal, breast, and lung cancers. The acquisition will leverage Quest’s expertise and scale in oncology, genomics, and pathology, thus significantly transforming the patient journey and ultimately saving lives. It is expected to elevate the company to lead the rapidly growing MRD category.
Jim Davis, President, CEO, and President of Quest Diagnostics, said, “By working with Haystack, we have the opportunity to broaden access to biopsy insights MRD and potentially improve long-term cancer outcomes.” Quest’s strength in detection, pathology, and sequencing, combined with Haystack’s liquid biopsy technology, will now position them to lead the rapidly growing MRD category.
The Acquisition and Future Performance Milestones
Under the terms of the agreement, Quest will pay $300 million in cash at closing and up to an additional $150 million upon reaching future performance milestones. The company expects the acquisition to be modestly dilutive to earnings over the next three years and ramp up by 2026.
Conclusion
Quest Diagnostics’ acquisition of Haystack Oncology is a significant step forward in the healthcare industry’s march towards improving cancer care. The combination of Haystack’s highly sensitive MRD technology with Quest’s expertise and scale will transform the patient journey by broadening access to biopsy insights, MRD testing, and potentially improving long-term cancer outcomes. As per information from the source, the transaction is subject to customary regulatory review before completion.
