Roche strikes deal to buy Covid test maker GenMark for $1.8bn

The deal is expected to expand Roche's molecular diagnostics portfolio, its CEO said. Bloomberg

Roche Holding agreed to buy GenMark Diagnostics for about $1.8 billion to gain a provider of fast tests for infectious diseases, including Covid-19.

The Swiss drugmaker will pay $24.05 a share in cash, it said in a statement on Monday. That’s 30 per cent more than Friday’s closing price. The boards of both companies approved the transaction.

GenMark’s tests can detect multiple pathogens from a single patient sample. The pandemic has fueled demand for tests that can swiftly diagnose Covid-19 and other diseases, kindling a wave of deal-making in the diagnostics field. The transaction is Roche’s largest since the takeover of Spark Therapeutics in 2019.

GenMark shares surged almost 50 per cent last month after Bloomberg News reported that the company was fielding interest from other medical diagnostics companies. The stock closed at $18.50 on Friday. Roche rose 1 per cent in early trading in Zurich on Monday.

Carlsbad, California-based GenMark makes panels that swiftly identify the most common viral and bacterial organisms linked to upper respiratory infections. Its products detect life-threatening bloodstream infections and antimicrobial-resistance genes.

The deal “will broaden our molecular diagnostics portfolio to include solutions that can provide lifesaving information quickly to patients and their health-care providers”, Thomas Schinecker, the chief executive of Roche’s diagnostics unit, said in the statement.

Revenue at GenMark surged 95 per cent last year to $171 million, fuelled by its ePlex system, which speeds up lab diagnoses. Sales in 2021 will probably grow by 10 per cent to 15 per cent, the company said last month.

Other recent transactions in the diagnostics industry include Thermo Fisher Scientific’s purchase of Mesa Biotech, which makes tests for the flu and strep as well as Covid-19, for about $450 million in cash. Quidel Corporatio is also weighing a combination with Qiagen NV, Bloomberg News reported last month.

The GenMark takeover is expected to close in the second quarter. The company will continue to operate mainly out of its California headquarters.

Citigroup Inc. is acting as Roche’s financial adviser and Sidley Austin is the Swiss company’s legal counsel. JPMorgan Chase is GenMark’s financial adviser while DLA Piper is its legal counsel.