San Francisco-based molecular diagnostic company Veracyte, a pioneer in the field of molecular cytology, has announced that it will pay $21 million, including $7.8 million in cash and $13.2 million in common stock, to acquire Maynard-based Allegro Diagnostics Corp, a privately held company that develops genomic tests to improve the preoperative diagnosis of lung cancer.
This deal will allow Veracyte to market Allegro’s lead lung cancer test in the second half of 2015, and the company expects a significant increase in its revenues in 2017.
Allegro’s BronchoGen genomic test is designed to help doctors detect lung cancer at an early stage by providing critical diagnostic information.The test discriminates between patients with lung nodules who have had a non-diagnostic bronchoscopy result at higher or lower risk for cancer. It has the potential to be incorporated into standard bronchoscopy procedures, and it will allow some patients to be monitored with CT scans, instead of undergoing invasive procecdures. Ultimately, the test can reduce the number of diagnostic and surgical procedures required to manage these patients.
By detecting molecular changes that occur throughout the respiratory airways in response to smoking and that are correlated with disease, the Maynard company’s technology indicates the presence of malignancy or disease processes from distant sites in the lung. The lung cancer test is performed on cytology samples obtained through bronchoscopy, a minimally invasive procedure that enables a physician to access airways in the lung.
Bonnie H. Anderson, Veracyte’s president and chief executive officer, stated in a press release that the company now expects to accelerate its entry into the pulmonary market and to improve treatment for patients with lung nodules, creating, at same time, long-term growth opportunities.
This move, she added, comes to further establish Vearcyte’s leadership in molecular cytology, using genomics to provide a higher number of definitive diagnosis, as 50% to 75% of the 300,000 bronchoscopic tests currently ordered have inconclusive results. In addition, this should “spare patients from unnecessary invasive procedures and reduce associated healthcare costs,” she concluded.