Transaction to enhance Labcorp's laboratory
services network
and expand access to the company's high-quality clinical
laboratory services
BURLINGTON, N.C. and MIAMI, March 28,
2024 /PRNewswire/ -- Labcorp (NYSE: LH), a
global leader of innovative and comprehensive laboratory services,
and OPKO Health, Inc. (Nasdaq: OPK), a multinational
biopharmaceutical and diagnostics company, announced today that
they have entered into an agreement for Labcorp to acquire select
assets of BioReference Health, a wholly owned subsidiary of OPKO
Health.
Through this transaction, Labcorp will acquire BioReference
Health's laboratory testing businesses focused on clinical
diagnostics and reproductive and women's health across the United States outside of New York and New
Jersey. This transaction includes patient service centers
(PSCs) and certain customer contracts and operating assets.
BioReference Health will continue to offer oncology and urology
diagnostic services nationwide, as well as maintain its full
operations in New York and
New Jersey.
When complete, the transaction is expected to provide patients,
physicians and customers with greater access to Labcorp's
comprehensive, high-quality laboratory services, scientific
expertise and expanded testing capabilities in key regions across
the country.
"Labcorp is committed to building on the excellent customer
service that physicians and health systems have come to expect from
BioReference Health, while expanding access and convenience for
patients across the country," said Mark
Schroeder, Executive Vice President and President of
Diagnostics Laboratories and Chief Operations Officer of Labcorp.
"We look forward to working with the BioReference Health team
to ensure a smooth transition following the close of the
transaction. Combined with Labcorp's expertise and scale, we will
help achieve better health outcomes for patients."
"Through this transaction we are able
to significantly streamline our laboratory
services business while retaining its core
operations, positioning BioReference Health for sustained
growth and profitability," said Phillip
Frost, M.D., Chairman and Chief Executive Officer of
OPKO. "This transaction is part of our previously announced
effort to re-establish profitability at our clinical laboratory
business while at the same time better positioning
OPKO as an innovative biopharmaceutical company."
The assets that Labcorp will be acquiring currently generate
approximately $100 million in annual
revenue. The purchase price for the transaction is $237.5 million. The proposed acquisition meets
Labcorp's strategic and financial criteria.
The transaction is subject to customary closing conditions and
applicable regulatory approvals, including under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
The transaction is anticipated to close in the second half of
2024.
Lazard is serving as Labcorp's financial advisor, and Hogan
Lovells, Kilpatrick Townsend and
Parker Poe are serving as legal
counsel.
Piper Sandler & Co. is
serving as OPKO's financial advisor, and Greenberg Traurig is
serving as legal counsel.
About Labcorp
Labcorp (NYSE: LH) is a global leader of innovative and
comprehensive laboratory services that helps doctors, hospitals,
pharmaceutical companies, researchers and patients make clear and
confident decisions. We provide insights and advance science to
improve health and improve lives through our unparalleled
diagnostics and drug development laboratory capabilities. The
company's more than 67,000 employees serve clients in approximately
100 countries, provided support for 84% of the new drugs and
therapeutic products approved in 2023 by the FDA and performed more
than 600 million tests for patients around the world. Learn more
about us at www.labcorp.com.
About BioReference Health
BioReference® Health LLC, an OPKO Health, Inc.
Company, empowers confident healthcare decisions by
prioritizing service, creating innovative solutions, and offering
scientific expertise in oncology, urology, and women's health.
Headquartered in Elmwood Park, New
Jersey, BioReference Health operates 10 laboratory
facilities around the country, is in-network with the largest
health plans in the United States
and processes more than 12 million tests, annually. BioReference
Health provides credible and tailored solutions for a variety
of customers and patients, including medical practices small and
large, hospitals and health systems, correctional institutions,
government agencies, educational systems, and sport leagues. In
addition to an extensive test menu with 99 percent of tests
performed in-house, BioReference Health's differentiated offerings
include large-scale health screening programs, on-demand mobile
phlebotomy, and transformative business solutions that optimize
laboratory management. For more information
visit https://www.bioreference.com.
About OPKO
OPKO Health, Inc. (Nasdaq: OPK) is a multinational
biopharmaceutical and diagnostics company that seeks to establish
industry-leading positions in large, rapidly growing markets by
leveraging its discovery, development, and commercialization
expertise and novel and proprietary technologies. For more
information, visit www.opko.com.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains forward-looking statements,
including but not limited to statements with respect to (a) the
anticipated impact of the transaction including expanding access
and convenience for patients to laboratory testing services; (b)
expected timing to closing, (c) other anticipated potential
benefits of the acquisition when combined with Labcorp, including
potential future revenue generation of the acquired business and
(d) anticipated benefits to BioReference Health and OPKO.
Each of the forward-looking statements is subject to change
based on various important factors, many of which are beyond each
of the party's control, including without limitation: (i) the risk
that the transaction may not be completed in a timely manner or at
all; (ii) expected timing to closing; (iii) the failure to satisfy
closing conditions, including the receipt of certain regulatory
approvals; (iv) the occurrence of any event, change or other
circumstance that could give rise to the termination of the
transaction agreements; (v) potential difficulties with employee
retention and employee relations; (vi) the trading price of each of
Labcorp and OPKO's stock, competitive actions and other unforeseen
changes and general uncertainties in the marketplace; (vii)
changes in government regulations; (viii) customer purchasing
decisions, including changes in payer regulations or policies; (ix)
other adverse actions of governmental and third-party payers; (x)
changes in testing guidelines or recommendations; (xi) federal,
state, and local government responses to the COVID-19 pandemic;
(xii) the impact of global geopolitical events; (xiii) the effect
of public opinion on each party's reputation; (xiv) adverse results
in material litigation matters, if applicable; (xv) the impact of
changes in tax laws and regulations; (xvi) failure to maintain or
develop customer relationships; (xvii) failure in information
technology, systems or data security; (xviii) personnel costs;
(xix) inflation, and (xx) increased competition. These factors, in
some cases, have affected and in the future (together with other
factors) could affect each of Labcorp and OPKO's ability to
implement their respective business strategies, and actual results
could differ materially from those suggested by these
forward-looking statements. As a result, readers are cautioned not
to place undue reliance on any forward-looking statements.
Each of Labcorp and OPKO has no obligation to provide any
updates to these forward-looking statements even if its
expectations change. All forward-looking statements are expressly
qualified in their entirety by this cautionary statement. Further
information on potential factors, risks and uncertainties that
could affect operating and financial results is included in the
most recent Annual Report on Form 10-K and subsequent Forms 10-Q,
including in each case under the heading RISK FACTORS, and in the
other filings with the SEC for each of Labcorp and OPKO. The
information in this press release should be read in conjunction
with a review of each of Labcorp and OPKO's filings with
the SEC including the information in the company's most
recent Annual Report on Form 10-K, and subsequent Forms 10-Q, under
the heading MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
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SOURCE Labcorp